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Greencore Group plc – Annual Report and Financial Statements 2022
Greencore Group plc
Annual Report and Financial Statements 2022
Greencore Group plc – Annual Report and Financial Statements 2022
Our Better Future Plan
Read more on page 20
Sourcing with Integrity
Making with Care
Feeding with Pride
About us
Read more on page 5
The Greencore Way
People at
the Core
Great
Food
Sustainability Excellence
Our purpose
Read more on page 4
Greencore Group plc is a leading
manufacturer of convenience foods.
We are proud to supply a wide range
of chilled, frozen and ambient foods
to some of the most successful retail
and food service customers in the UK.
Read more on page 16
Our strategy
Growth Relevance
Differentiation
1Strategic Report | Directors’ Report | Financial Statements
Financial highlights
1
In this report
Strategic Report
About us IFC
Financial highlights 1
At a glance 2
Our strategic framework 4
Our business model 6
Chair’s statement 8
Chief Executive’s review 12
Market trends 14
Strategy 16
Sustainability 20
Climate Transition – Taskforce on Climate
Related Financial Disclosure (TCFD) 29
Our Key Performance Indicators 34
Operating and financial review 38
Risks and risk management 42
Group Executive Team 50
Directors’ Report
Chair’s introduction to corporate governance 52
Board of Directors 54
Board leadership and Company purpose 56
Board activities and engagement
with stakeholders 58
Division of responsibilities 68
Composition, succession and evaluation 70
Report of the Nomination and
Governance Committee 72
Report of the Audit and Risk Committee 76
Report on Directors’ Remuneration 83
Other statutory disclosures 109
Statement of Directors’ responsibilities 116
Financial Statements
Independent Auditor’s Report 117
Group Income Statement 125
Group Statement of
Comprehensive Income 126
Group Statement of Financial Position 127
Group Statement of Cash Flows 128
Group Statement of Changes in Equity 129
Notes to the Group Financial Statements 131
Company Statement of Financial Position 173
Company Statement of Changes in Equity 174
Notes to the Company
Financial Statements 175
Other Information
Alternative Performance Measures 179
Shareholder and other information IBC
Our FY22 Annual Report and Financial
Statements (‘this Report’) can be downloaded as
a pdf from this location: https://www.greencore.
com/investor-relations/results-centre/
Certain statements made in our FY22 Annual Report and Financial Statements are forward-looking. These represent expectations
for the Group’s business, and involve known and unknown risks and uncertainties, many of which are beyond the Group’s control.
The Group has based these forward-looking statements on current expectations and projections about future events based on
information currently available to the Group. These forward-looking statements include all statements that are not historical facts
and may generally, but not always, be identified by the use of words such as ‘will’, ‘aims’, ‘achieves’, ‘anticipates’, ‘continue’, ‘could’,
‘develop’, ‘should’, ‘expects’, ‘is expected to’, ‘may’, ‘maintain’, ‘grow’, ‘estimates’, ‘ensure’, ‘believes’, ‘intends’, ‘projects’, ‘sustain’,
‘targets’, or the negative thereof, or similar future or conditional expressions.
By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances
that may or may not occur in the future and reflect the Group’s current expectations and assumptions as to such future events and
circumstances that may not prove accurate. A number of material factors could cause actual results and developments to differ
materially from those expressed or implied by forward-looking statements. There may be risks and uncertainties that the Group is
unable to predict at this time or that the Group currently does not expect to have a material adverse effect on its business. You should
not place undue reliance on any forward-looking statements. These forward-looking statements are made as of the date of this
Annual Report. The Group expressly disclaims any obligation to publicly update or review these forward-looking statements other
than as required by law.
1 The Group uses Alternative Performance Measures (‘APMs’) which are non-
International Financial Reporting Standards (‘IFRS’) measures to monitor the
performance of its operations and of the Group as a whole. These APMs along
with their definitions and reconciliations to IFRS measures are provided in the
APMs section on page 179.
Revenue
£1,739.6m
(Reported: +31.3%)
(Pro Forma: +29.4%)
Basic Earnings per Share (Basic ‘EPS’)
6.2p
(FY21: 5.0p)
Adjusted Earnings per Share (Adjusted ‘EPS’)
9.2p
(FY21: 3.7p)
Group Operating Profit
£52.1m
(FY21: £42.8m)
Adjusted Operating Profit
£72.2m
(FY21: £39.0m)
Free Cash Flow
£58.7m
(FY21: £72.2m)
Profit before taxation
£39.8m
(FY21: £27.8m)
Adjusted Profit Before Tax
£59.8m
(FY21: £22.6m)
Return on Invested Capital (‘ROIC’)
8.4%
(FY21: 4.5%)
2 Greencore Group plc Annual Report and Financial Statements 2022
STARBUCKS TRUE LOGOS. GENERATED BY CHI NGUYEN (CHISAGITTA)
Corporate
head office
At a glance
Supplying
the UK market with high
quality convenience foods
Who we are
Greencore Group plc is a leading manufacturer of convenience foods. We are proud to
supply a wide range of chilled, frozen and ambient foods to some of the most successful
retail and food service customers in the UK.
Locations
Corporate head office
Production sites
Distribution centres
Transport hubs
Irish ingredients
Barlborough corporate services
What we do and where we operate
Manufacturing
We operate 23 manufacturing units across
16locations, including eight sandwich units,
five chilled ready meal units, three salad
units, two sushi units, two chilled soup and
sauces units, one chilled quiche unit, one
ambient cooking sauce and pickles unit and
one Yorkshire Pudding unit. We also operate
an Irish ingredients business that imports
and distributes edible oils.
Distribution
We have built a strong Direct to Store
distribution operation comprising over
650 vehicles, five regional distribution
centres and 13 transport hubs.
23
manufacturing units
18
distribution centres
and transport hubs
650+
distribution vehicles
Our customers
We supply all of the major supermarkets
in the UK. We also supply convenience
and travel retail outlets, discounters, coffee
shops, foodservice and other retailers.
Some of our principal customers include:
3Strategic Report | Directors’ Report | Financial Statements
Our year in numbers –
items produced in FY22
249m
jars of cooking sauces,
dips and pickles
795m
sandwiches and other
food to go items
47m
chilled soups and sauces
127m
chilled ready meals
4 Greencore Group plc Annual Report and Financial Statements 2022
Our strategic framework
Connects
How it all
We are defined by…
Our purpose
Which guides on…
Our strategy
Our purpose, making every day taste
better, defines and inspires us.
Having a clear purpose and using it as a
guiding principle to the way we operate
supports the direction we choose to take,
inspires our strategy and how we deliver
against it.
It benefits our people, our customers,
our suppliers, our consumers, our local
communities, the wider environment
and ultimately our shareholders.
Read more on page 56
Growth
Our leadership positions in attractive and
structurally growing food categories underpin
a strategy that combines strong organic growth-
potential with disciplined strategic investment.
Relevance
Our model of embedded, long term customer
partnerships is the cornerstone of our commercial
offering, ensuring we are strategically relevant for
our customers.
Differentiation
Our comprehensive capability set provides us with a
distinctive and repeatable Greencore way of working,
to ensure we exploit potential growth opportunities
available to us.
…and creates solid foundations for a
consistent, compelling and sustainable
investment case.
Read more on page 16
5Strategic Report | Directors’ Report | Financial Statements
How do we do that…
By following the
Greencore Way
Bringing to life sustainability through our…
Better Future Plan
The Greencore Way describes who
we are and how we will succeed.
It is built on four differentiators.
People at the Core
By embedding a safety
culture, providing
inspiring leadership and
having engaged and
effective teams, we
ensure that people are at
the core of our business.
Sustainability
Sustainability underpins
all areas of our business
from Sourcing with
Integrity to Making with
Care and Feeding
with Pride.
Great Food
Ensuring food safety,
leading on taste and
winning on quality are
all essential to our
continued success.
Excellence
We strive for excellence
in everything we do
by building capability,
driving efficiency and
delivering value for all
our stakeholders.
Our Better Future Plan is built around three pillars:
Each pillar contains a set of priorities — with
aspirational goals supported by milestone targets
which relate to the most pressing sustainability risks
and opportunities facing us as a business and the
food system within which we operate.
Sourcing with Integrity
By 2030, we will source our priority ingredients
from a sustainable and fair supply chain.
Mapping our plans to the UN Sustainable
Development Goals
Making with Care
By 2040, we will operate (Scope 1 & 2) with
Net Zero emissions.
Mapping our plans to the UN Sustainable
Development Goals
Feeding with Pride
By 2030, we will have increased our positive impact
on society through our products.
Mapping our plans to the UN Sustainable
Development Goals
Read more on page 20
Our business model
6 Greencore Group plc Annual Report and Financial Statements 2022
Delivering
Sourcing with
Integrity
Our inputs
People
c.14,000
Ingredients
c.3,500
Manufacturing units
23
Distribution fleet
650+
Invested capital
c.£700m
We are committed to ensuring
that the raw materials we use in
the products we supply to our
customers are sourced sustainably
and responsibly.
Our Subject Matter Experts (‘SMEs’) work
with our Purchasing and Sustainability
teams to reduce complexity and risk within
the supply chain. We source our raw
materials from local suppliers where
feasible, and we have also developed long
term strategic partnerships to support
effective, sustainable and transparent
supply chains.
Number of ingredient suppliers
we source from
c.300
Percentage of ingredients
sourced from UK-based suppliers
c.87%
Our differentiators
People at the Core Great Food
Sustainability Excellence
Read more on page 5
Managing our risks
Risks are identified using a ‘bottom up’ approach across our
business, with three lines of defence at each of the business
operations, central governance and independent third-party
levels. Risks are also reviewed on a ‘top down’ basis by the Group
Executive Team and the Risk Oversight Committee. The Audit
and Risk Committee provide structured and systematic oversight
of risk management and control systems and reports to the
Board on its activities.
Read more on page 42
better results through an
effective business model
7Strategic Report | Directors’ Report | Financial Statements
Making
with Care
Feeding
with Pride
Stakeholder
value creation
Shareholders
Creating sustainable value through
disciplined capital allocation.
See Operating and financial review on
page 38
Customers
Providing best-in-class customer
outcomes and satisfaction.
See Relevance on page 17
Suppliers
Enabling collaboration for all
parties to achieve goals and
drive growth.
See Sustainability on page 23
Consumers
Addressing key consumer demand
drivers through food innovation.
See Market trends on page 14
Colleagues
Investing in career development
and shaping career opportunities
that engage, reward and retain
our people.
See People at the Core on page 27
Community
Creating stronger and healthier
communities through education
and food-focused engagement.
See Sustainability on page 24
Our Great Food is
underpinned by our
dedication to food safety,
taste and quality.
We source and prepare our Great
Food to the highest food safety
standards every day. Our customers
and their consumers can trust what
we make. We work relentlessly to
ensure that we reach industry-leading
food quality standards in everything
we do. We also leverage our expertise
in food manufacturing and assembly
to provide ‘ready to eat’ products
using processes that are people-
intensive and environments that
are ‘high care’.
Number of different products
produced by Greencore in total
c.2,000
Internal and external audits across
all sites during the year
21,250
Number of daily deliveries by
our Direct to Store vehicles
10,600+
Sandwiches and other food
to go items produced in FY22
795m
We design products with taste,
freshness, health and affordability
in mind, and ensure that they
are packaged and distributed
as efficiently and responsibly
as possible.
We work closely with our customers
to innovate and improve recipes and
technologies that add value for them.
This is done across a range of product
categories including sandwiches, salads,
sushi, chilled snacking, chilled ready meals,
chilled soups and sauces, chilled quiche,
ambient sauces and pickles, and frozen
Yorkshire Puddings. We distribute
through our chilled distribution network
to customers’ distribution centres and to
selected food outlets through our dedicated
fleet of over 650 Direct to Store vehicles.
8 Greencore Group plc Annual Report and Financial Statements 2022
In September 2022 we announced the
appointment of Leslie Van de Walle as Chair
Designate, joining the Greencore Board
on 1 December 2022. We also announced
Gary Kennedy’s intention to retire from our
Board at the conclusion of our Annual
General Meeting (‘AGM’) in January 2023.
In this, Gary Kennedy’s final statement, we
ask him to reflect on the key developments
over the past 12 months.
Q: When you look back on
FY22, what do you think
were the key themes that
have had an impact on
Greencore?
A: The past year has been a period of
recovery, marked by a strong improvement
in both revenue and profitability for the
Group. Despite the well-documented,
industry-wide supply challenges and
disruptions, we have successfully worked
with both our customers and suppliers
to re-establish and maintain world-class
operational service levels. That is particularly
pleasing given the extent of supply chain
deficiencies, unprecedented inflation on
input costs and challenges in labour supply.
We have also successfully onboarded new
business wins, which have expanded the
Group’s product ranges and enabled us to
enter new channels. In FY22, new business
wins have accounted for approximately 4.4%
of the Group’s Pro Forma Revenue Growth.
We have recovered the vast majority of
our increased input costs and other inflation
impacts by working with our customer base.
There is still further work to do, but thanks
to the skill and work of our commercial
and procurement teams we are making
good progress.
Q&A
Gary Kennedy
with
“Our profitability improvement has
been a result of a strong focus
on efficiency gains and progress
on restoring our historical margin
levels. We must push on with
this progression, particularly with
the opportunity we have in our
business with record volumes.”
Chair’s statement
9Strategic Report | Directors’ Report | Financial Statements
Our profitability improvement has been a
result of a strong focus on efficiency gains
and progress in restoring our historical
margin levels. We must push on with
this progression, particularly given the
opportunity we have in our business with
record volumes.
We experienced an IT security incident in
December 2021 which resulted in temporary
unauthorised access to part of the Group’s
IT systems. Our immediate priority was to
respond quickly to the incident to protect the
Group’s infrastructure and to minimise the
impact on operations. I am incredibly proud
of the dedication shown by our teams in
responding to this event.
We have invested in supporting our
people through the ongoing cost-of-living
pressures, both through salary increases
and through a wide range of other support
measures, including free tea and coffee
for all colleagues, access to a shopping
discount platform, vouchers, and offering
our colleagues the opportunity to purchase
our own products at nominal prices.
Q: What progress
have you made on your
strategic agenda over
the past 12months?
A: Our strategic agenda was significantly
interrupted by COVID-19 and more recently
our focus has been on recovery of our
economic and operating model.
Notwithstanding this, last year, we
announced business wins which required a
programme of strategic capital investment
and I am delighted to confirm that this has
now been completed. While there have
been certain commissioning challenges,
our focus is now on driving operating
efficiency and improved output and
conversion rates. Iwould like to thank our
project and operational teams for delivering
these investments. This is another great
example of the partnership model that we
have developed with customers over many
years, and that has been especially important
through the challenges of COVID-19 and the
inflationary environment.
FY22 also saw the launch of our business
change programme, Better Greencore.
The first phase is targeted to deliver
annual recurring benefits of £30m in FY24.
A key element of the first phase of Better
Greencore was the review and redesign of
our organisation, creating a more customer-
focused structure. We will launch the
second phase, focusing on operational
and technological excellence in FY23.
Our sustainability agenda has developed
significantly over the last 12 months, and
we’re now well on our way to embedding
sustainability as part of our everyday
business. We have made good progress
on our foundations; data, embedding and
risk analysis, but this is not yet resulting in
absolute reductions in our carbon footprint.
We are looking at ways to accelerate delivery.
Q: What are your thoughts
on the Group’s financial
performance inFY22?
A: Our Group financial Key Performance
Indicators (‘KPIs’) are underpinned by a
set of profitability, return and cashflow
measures and they form the basis of our
remuneration criteria.
Our post-pandemic recovery is reflected
in strong sales growth, with Group Revenue
up by 31.3% to £1,739.6m as we continue
to address the inflationary and supply issues
that exist in the market.
In this context we were happy to deliver
Adjusted Operating Profit of £72.2m and
Adjusted EPS of 9.2p.
The balance sheet of the Group has been
significantly strengthened during FY22 with
substantial liquidity headroom and continued
progress on deleveraging.
Adjusted Operating Margin
4.2%
Pro Forma Revenue Growth
29.4%
“The past year has been a
period of recovery, marked
by a strong improvement
in both revenue and
profitability for the Group.”
10 Greencore Group plc Annual Report and Financial Statements 2022
Chair’s statement continued
I am pleased with our continued strong
recovery in what have been challenging
conditions. Our transformation work will
enable us to continue to drive forward our
profit conversion from the strong sales that
we are continuing to grow.
Q: How has the Board
approached capital
management as FY22
evolved?
A: After a period in FY20/FY21 where
capital protection was the primary focus,
it was pleasing that we were able to reduce
leverage in FY22 towards our medium
term targets of 1.0 to 1.5 times Net Debt to
EBITDA. While continuing to invest in our
business model we also recommenced
value return to our shareholders in the
form of a share buyback programme.
Our intention to return approximately £50m
to shareholders in the two year period to
FY24 remains in place. We completed the
first tranche, £10m, on 6 October 2022,
having returned £8.8m as at 30 September
2022, and we have announced the second
tranche of our buyback programme with
our FY22 Results release. Our dividend
payments have been suspended since FY20
and we recognise that for some shareholders
this would be their preferred option of
shareholder return. The Board does intend
to reinstate dividend payments at some
point in the future, and this will be
communicated in due course.
Q: What were the main
Board changes inFY22?
A: On 25 November 2021, Patrick Coveney
informed the Board that he would be
stepping down from his role as Executive
Director and Chief Executive Officer (‘CEO’)
on 30 March 2022. At that point we initiated
a search for his successor, resulting in the
appointment of Dalton Philips as Executive
Director and CEO as of 26 September 2022.
We are delighted to have made this
appointment.
As you know I stepped in as Executive Chair
upon Patrick’s departure; and Kevin Moore
was appointed as Deputy CEO. I want to
personally thank both Kevin and Chief
Financial Officer, Emma Hynes for the
support they provided both to me personally
and to the Group while we filled the
CEO position. Their contribution was
superb, providing the business with
strong governance, strategic direction
and leadership.
In May 2022, Gordon Hardie stepped down
as Non-Executive Director. In September
2022, we announced that Helen Weir had
elected to step down from the Greencore
Board with effect from 31 December 2022.
Helen’s focus on Board and Audit and Risk
Committee matters has been invaluable to
both the Board and the wider Group. In
October 2022, we announced that Paul
Drechsler had decided not to seek re-election
to the Greencore Board at the Annual General
Meeting (‘AGM’) in January 2023.
I would like to reiterate my sincere thanks
to Patrick, Gordon, Helen and Paul for their
valuable contributions.
We also announced in September 2022
the appointment of Leslie Van de Walle as a
Non-Executive Director and Chair Designate.
Leslie will join us on 1 December 2022 and
will take over my role as Non-Executive
Chair when I retire from the Board at our
AGM in January 2023. Leslie brings many
years of food industry experience and
knowledge and has a wealth of Non-
Executive and Chair experience across
multiple sectors. I know that he will be
a great support to Dalton and the rest
of our Group Executive Team.
I would also like to offer my thanks and that
of the rest of the Board to Jolene Gacquin,
who stepped down as Group Company
Secretary in September 2022. She provided
invaluable support to the Board and I’m sure
many of you will join me in wishing her well
for the future. Damien Moynagh joined us
as General Counsel and Company Secretary
in November 2022 and we are delighted
to welcome him to Greencore.
Following a Board Committee compositional
review during the year, I retired from, and
Anne O’Leary joined the Remuneration
Committee on 21 June 2022. Further detail
is set out in the Nomination and Governance
Committee Report on page 72.
Q: A major announcement in
FY22 was the appointment
of Dalton Philips as Group
CEO. What was it that
impressed you about Dalton?
A: There are many things about Dalton that
impress me. He has a strong track record
of leading dynamic consumer-related
businesses, and he has an outstanding
knowledge of the grocery sector.
He is an excellent leader, very effective
communicator and has a great awareness
of all stakeholder interests.
As we continue to emerge strongly from the
challenges of trading through the pandemic,
both I and the rest of the Board see him as
the ideal person to lead Greencore into the
next phase of our journey. We are thrilled
that a person of his calibre and experience
has joined our Group Leadership team
and Board in this vital role.
Q: How do you view the
outlook for Greencore?
A: Revenue performance in the early weeks
of FY23 has broadly held up well, however,
we do note some mix effect between
categories. We remain cautious about
the potential impact of the recessionary
environment and cost-of-living factors on
consumer spending through the year ahead.
We expect that FY23 will be a year of further
substantial inflation and we are working with
our customers on recovery and mitigation.
We remain focused on the execution of our
Better Greencore change programme and
continue to plan for the second phase which
focuses on operational and technological
excellence. We continue to make decisions
on customer contracts which are no longer
economic, with a heightened focus on our
ability to recover inflation.
We are confident that continued focus on
the strengths of the business, underpinned
by our resilient balance sheet and the
efficiency and productivity gains related
to our Better Greencore programme will
support the further successful progress
of the Group in the years ahead.
11Strategic Report | Directors’ Report | Financial Statements
Q: Finally, what are your
reflections on your time
as Chair of Greencore?
A: It has been a privilege to work with so
many talented colleagues at Greencore for
more than 14 years, as we transformed the
Group into a leader in the UK convenience
food sector and I am particularly proud of
the work we have done in creating a diverse
Board, with 60% female representation –
exceeding the recommendations in the
Hampton-Alexander Review.
In my time as Chair, there have been many
changes, both internally at Greencore and
more widely in society in general. But
nothing comes close to the impact the
COVID-19 pandemic has had on us all.
Aside from the business impact and the
incredible way that the Greencore team
managed through the pandemic as
key workers, Iwould like to, once again,
acknowledge and offer my deepest
sympathies to the families and friends of
our colleagues who sadly passed away
from COVID-19 – and to those that are
living with the effects of the virus, I wish
them a full and speedy recovery.
I have every confidence that the Group,
under Dalton’s leadership, has the
capabilities to continue to lead and grow
in its markets in the years ahead and I know
that our new Chair, Leslie Van de Walle,
will provide the Board with strong and
effective direction.
Finally, I would like to say a huge thanks
to all our colleagues, our customers, our
suppliers and our investors for their ongoing
commitment and support to both myself
specifically and to Greencore.
Gary Kennedy
Board Chair
28 November 2022
12 Greencore Group plc Annual Report and Financial Statements 2022
Q: What attracted you to the
role of Greencore CEO?
A: With a background growing up in the
food industry in Ireland, I’ve been aware of
Greencore as an iconic Irish food business
since its foundation. On top of that, I was of
course a customer of Greencore from my
time at Morrisons. My impression when I was
on ‘the other side’ was of a dynamic and
ambitious business that was fanatical about
servicing its customers’ needs. So, when the
opportunity came my way it was an easy
decision to make, and so much of what I’ve
seen so far has cemented the positive view
that I already had of the business. I’m
delighted and proud to be here and, despite
the challenges that the industry is currently
experiencing, I see big potential for future
value creation.
Q: Tell us more about this
value creation potential that
you see for the business?
A: Fundamentally, we operate in attractive
and growing markets. There will always be
demand for high quality convenience food,
and you can see from the investment that
our customers are making in this area that it’s
a real priority for them. They are constantly
asking us to do more for them, and we have
a fantastic opportunity to do so – given
our scale, our long-standing customer
relationships, and our reputation for service,
quality and innovation. At the same time,
we are a business that is still in recovery after
a really difficult couple of years through the
pandemic. As we continue to reset – our
operating model, our portfolio and our cost
base – there is so much potential for us to
be an even better business. Make no mistake,
there will be challenges along the way –
and the headwinds for our sector are well
documented – but we are very well placed
in the medium to long term.
Dalton Philips joined Greencore
as our Chief Executive Officer on
26September 2022, after five years
as CEO of daa plc, the global airports
and travel retail group. Prior to
that, Dalton served as CEO of
Wm Morrison plc, one of the UK’s
largest supermarket chains.
In this Q&A, we ask Dalton to
share what it was that attracted
him to Greencore, what his initial
observations have been and how
he sees the future of Greencore.
Chief Executive’s review
with CEO
Dalton Philips
13Strategic Report | Directors’ Report | Financial Statements
Q: You joined Greencore at
the end of September. What
are your initial observations,
and do they live up to
your expectations?
A: The first thing that hits you on spending
any length of time at Greencore is the
exceptional quality of the people. Of course,
I already knew about the fantastic work that
Gary Kennedy, Emma Hynes and Kevin
Moore were doing in leading the business
since Patrick Coveney stepped down in
March, but what I was less aware of was the
strength and depth of the teams at absolutely
every level of the Company.
In my first month or so with the business I‘ve
spent a lot of time visiting our manufacturing
sites and distribution depots – getting to
meet our people and really getting under
the skin of what they do and how they do it.
This has been invaluable for me in helping
me to get know the business, and I can
honestly say that everyone I’ve met has
impressed me with their passion, enthusiasm,
knowledge and professionalism.
It’s also been fantastic to see ‘behind the
scenes’ of the sheer breadth of our capability
– whether that be our manufacturing
network of real scale and diversity, our
distribution network that delivers daily to
every corner of the UK, our award-winning
food credentials or our leading position
with customers.
Of course, there are definitely areas that can
be improved on – and I wouldn’t have joined
if that wasn’t the case – but all in all my initial
observations have been very favourable.
Q: What are our customers
saying about Greencore?
A: The feedback I’ve picked up so far – both
informal and formal - has been consistently
positive. I think the most eloquent testament
to our customers’ opinion is the fact that
Greencore ranked number one in the most
recent annual Advantage Group survey,
where retailers rank their chilled foods
suppliers across a range of important areas.
There’s definitely even more that we can
be doing for our customers in both existing
and new areas, and it’s clear that there is
a high level of demand for our products.
That’s a great place to be for any supplier
in any industry.
Again, let’s be clear: these are challenging
times for the food industry, and there are
difficult conversations taking place between
suppliers and retailers given the inflationary
pressures that we’re seeing. But at the heart
of these conversations is a determination to
do what’s right for consumers, whilst at the
same time ensuring that we can continue to
mutually support each other’s growth plans.
Q: What changes, if any,
have you made to the
business so far?
A: In my first weeks, my overriding focus
has been on seeing, listening and learning
rather than on implementing any immediate
changes. However, we have made some
important appointments with new team
members coming on board. Lee Finney
joined us as Chief Operating Officer in
October, with an outstanding track record
of implementing operational excellence in
the global food and beverage industry, and
I am delighted to have him on the team.
His leadership will be critical as we build on
the work that has been done as part of Better
Greencore (our change programme), and
he is already bringing real thought leadership
to how we can step change our approach
right across our operation.
Another key appointment, at the beginning
of November, was that of Damien Moynagh
as General Counsel and Group Company
Secretary. Damien will lead Greencore’s
Legal and Company Secretariat functions
and he brings with him over 20 years’
experience as a corporate lawyer and senior
executive across Europe, the United States
and Asia.
Lee and Damien both bring a whole wealth
of experience and knowledge to Greencore
and are great additions to our Executive
team.
Q: What is your focus
looking forward?
A: In the near-term we know there are some
things that we just must get right – we’ve
got to continue to engage constructively
with our customers to deliver inflation
recovery, we’ve got to work on simplifying
our operation to drive efficiency and build
margin and we’ve got to rigorously manage
our cost base. We’ve got to do this in a way
that continues to engage and energise the
14,000 people who come to work for us
every day.
Longer term, there is a lot of potential to
unlock in the business. We know we’ll have
a journey to go on to deploy a world-leading
operational excellence model, and this
will require us to build out our technology
capability. As the new team settles in,
we’ll also want to take the time to look
in a considered way at our portfolio of
customers, categories and assets to build
a strategy that will enable us to not only
recover our historic levels of margin but
to generate profitable growth beyond this.
We will be working hard on this in the
months ahead as a team.
Finally, I am also very much looking forward
to welcoming Leslie Van de Walle, who joins
us as Chair Designate on 1 December.
Dalton Philips
Chief Executive Officer
28 November 2022
Adjusted Operating Profit
£72.2m
Adjusted EPS
9.2p
14 Greencore Group plc Annual Report and Financial Statements 2022
£20bn
total food to go
market value
17
best-in-class partner
agencies
7
reputable agency
sources providing
continuous end point of
sale, loyalty, panel and
market data
4m+
responses by consumers
to bespoke questions
on our survey platform
20+
individual topics
discussed with
consumers in our
proprietary community
c.1,190
active members of
our online consumer
community
Source: internal Greencore insight teams
Capturing insights and data
We have a dedicated team of insight and category professionals
reviewing multiple sources of market, shopper, and consumer
intelligence daily to unlock key insights. We actively seek out,
analyse, and interpret relevant information to drive and activate
category strategies and innovation.
We track, measure and report on data and insights to give us
both a top-down and bottom-up view of the themes and trends
impacting our business and categories. We work in partnership
with numerous best-in-class agencies providing us with an
extensive and varied portfolio of insight resources. We work hard
to understand all variables by analysing end point-of-sale, loyalty,
and panel data to understand granular shopper behaviour
(the what) and we overlay this with our proprietary quantitative
and qualitative consumer and shopper research to understand
sentiment, and motivations (the why).
Key trends
Market trends
influencing
our business
Busy lifestyles
Sales of Greencore’s categories are driven predominantly by the need
for convenience. There has been a continued movement out of
home post COVID-19, which has resulted in a more intense pace of
life. The underlying trend of increased mobility and time spent away
from home is unlikely to reduce in the short term, especially as more
people look to take on overtime or second jobs to cope with falling
discretionary income.
Food for now categories have always had widespread appeal as a
convenient food solution, and frequent buyers have always been
more likely to be working in multiple locations, working from home,
or working shifts or long hours.
Treat and reward
Treat occasions continue to play an important role across our
categories. Far from making us batten down the hatches, the
pandemic and now the cost-of-living crisis has encouraged people
to be kind to themselves through treating. Food is essential to
satisfying emotional needs, calming stress levels, and reducing
anxiety, and is a relatively low-cost, low-risk treat. Despite the
cost-of-living squeeze, people will still look to treat themselves.
Consequently, product ranges that fulfil these treat needs are
important for both at home and on-the-go occasions.
15Strategic Report | Directors’ Report | Financial Statements
Healthy and sustainable diets
As people are increasingly striving to eat more plant-based foods,
flexitarianism looks set to become the prevailing diet of the future.
People generally find health and sustainability confusing, and they
look to retailers and manufacturers to support and guide.
Manufacturers and retailers will play their part by delivering tasty
products with minimal impact on people and the planet.
Moving towards diets that align more closely with healthy-eating
guidelines, including less meat and more vegetable-based foods,
will also offer environmental benefits. Despite the overall reduction
in meat consumption to date, for Greencore to reach its sustainability
targets will require a substantial acceleration of this trend.
Our healthy and sustainable diets policy details four pillars that guide
and influence our product development; 1) positive health, 2) product
reformulation, 3) more vegetables and 4) the future of protein. We
give more detail on our approach to healthy and sustainable diets in
the Sustainability section on page 25.
Cost-of-living impact
We are currently in a period of high inflation, which puts pressure on
all parties when it comes to food prices. Alongside energy price
increases, there is a lot of consumer focus on the cost-of-living crisis
in the UK. People are feeling the effects and subsequently looking to
tighten their spending habits.
Money continues to be the dominant concern, with 75% of people
asked in our research claiming to be worried about their finances.
Our market research indicates that whilst consumers still value treats
and rewards, they will become ever more responsive, adapting their
shopping habits to deal with financial challenges as they arise. They
will employ money-saving tactics so they can continue buying into
the categories they enjoy. People will be willing to invest more time
planning their shopping, including the use of multiple stores and
channels, if it means they are saving money.
16 Greencore Group plc Annual Report and Financial Statements 2022
Our strategy is built upon the three pillars
of Growth, Relevance and Differentiation.
Our growth is underpinned by consistently seeking
to operate and win in categories, channels and with
customers that outperform the overall food market.
Our ability to do this is based on ever-increasing
relevance both to our customers and the end-consumer,
grounded in the quality of the products we produce and
the depth of the relationships we build.
We differentiate through a distinctive, repeatable
Greencore way of working that draws on four critical
elements – a recognition that our People are at the
Core of our success, our unrelenting commitment to
producing Great Food, an aspiration for Excellence in all
that we do and a commitment to continuously improve
the Sustainability of our business.
Our
Strategy
strategy
Growth
Our leadership positions in attractive and structurally growing
food categories underpin a strategy that combines strong organic
growth potential with disciplined strategic investment.
Relevance
Our model of embedded, long term customer partnerships
is the cornerstone of our commercial offering, ensuring
we are strategically relevant for our customers.
Differentiation
Our comprehensive capability set provides us with a distinctive
and repeatable Greencore way of working, to ensure we exploit
potential growth opportunities.
Progress
• Pro Forma Revenue Growth of 29.4% in FY22
• For FY22, reported revenue in the Group’s food to go categories
increased by 37.9% versus FY21 and in the Group’s other
convenience categories increased by 19.8% versus FY21
• Growth supported through a combination of existing business
and onboarding of new relationships
Read more on page 38
Progress
• Completion of multi-site capital investment to support
new business
• Delivery of 97.4% service levels despite acute supply
chain disruption
• Regained the number-one position in the overall Advantage
Group survey. We ranked as clear number-one supplier within
the food to go and other convenience categories and scored
strong positions across our other product areas
Progress
• Delivered multiple sandwich automation robotics solutions
across three manufacturing locations
• Continued delivery of Greencore manufacturing and purchasing
excellence agendas to help mitigate the impact of inflation
• 100% attainment of AA or A rating in all audits using Brand
Reputation Compliance Global Standards (‘BRGS’)
Outlook
• Continue our recovery trajectory, including annualisation of
new business wins
• Continue to diversify across fast-growing categories, channels
and customers
• Proactively manage our customer, product and asset portfolio
to ensure profitability of our growth
Outlook
• Further strengthen our existing and new customer relationships
• Continue to closely monitor the impact of the inflationary
environment and continue to partner with customers to pass
through, mitigate or off-set all relevant inflation.
• Ensure our ongoing competitiveness through the delivery
of all aspects of our Better Greencore change programme
Read more on page 10
Outlook
• Continue to build an inclusive and diverse working environment,
underpinned by our safety culture, that is attractive and can
develop existing and future colleagues
• Further embed sustainability into processes, behaviours
and capabilities across the business
• Invest further in automation solutions to reduce labour reliance
and build margin
• Continue to develop our food portfolio whilst ensuring we are
positively socially impactful as a business.
17Strategic Report | Directors’ Report | Financial Statements
Growth
Our leadership positions in attractive and structurally growing
food categories underpin a strategy that combines strong organic
growth potential with disciplined strategic investment.
Relevance
Our model of embedded, long term customer partnerships
is the cornerstone of our commercial offering, ensuring
we are strategically relevant for our customers.
Differentiation
Our comprehensive capability set provides us with a distinctive
and repeatable Greencore way of working, to ensure we exploit
potential growth opportunities.
Progress
• Pro Forma Revenue Growth of 29.4% in FY22
• For FY22, reported revenue in the Group’s food to go categories
increased by 37.9% versus FY21 and in the Group’s other
convenience categories increased by 19.8% versus FY21
• Growth supported through a combination of existing business
and onboarding of new relationships
Read more on page 38
Progress
• Completion of multi-site capital investment to support
new business
• Delivery of 97.4% service levels despite acute supply
chain disruption
• Regained the number-one position in the overall Advantage
Group survey. We ranked as clear number-one supplier within
the food to go and other convenience categories and scored
strong positions across our other product areas
Progress
• Delivered multiple sandwich automation robotics solutions
across three manufacturing locations
• Continued delivery of Greencore manufacturing and purchasing
excellence agendas to help mitigate the impact of inflation
• 100% attainment of AA or A rating in all audits using Brand
Reputation Compliance Global Standards (‘BRGS’)
Outlook
• Continue our recovery trajectory, including annualisation of
new business wins
• Continue to diversify across fast-growing categories, channels
and customers
• Proactively manage our customer, product and asset portfolio
to ensure profitability of our growth
Outlook
• Further strengthen our existing and new customer relationships
• Continue to closely monitor the impact of the inflationary
environment and continue to partner with customers to pass
through, mitigate or off-set all relevant inflation.
• Ensure our ongoing competitiveness through the delivery
of all aspects of our Better Greencore change programme
Read more on page 10
Outlook
• Continue to build an inclusive and diverse working environment,
underpinned by our safety culture, that is attractive and can
develop existing and future colleagues
• Further embed sustainability into processes, behaviours
and capabilities across the business
• Invest further in automation solutions to reduce labour reliance
and build margin
• Continue to develop our food portfolio whilst ensuring we are
positively socially impactful as a business.
18 Greencore Group plc Annual Report and Financial Statements 2022
Building a
Strategy
This is a change programme launched in FY22,
with the aim of addressing three interrelated
challenges – our rising fixed cost base; our
ability to fully service our current portfolio from
our existing asset base at appropriate margin;
and the relative immaturity of our technology
infrastructure.
By addressing these challenges, we will build a better
business: 1) for our customers, with greater efficiency
enabling us to build more competitive offerings, as well as
a more integrated engagement model to support shared
growth and margin aspirations; 2) for our people, with
faster decision making, simplified processes and a clear
organisational model empowering them to do their best
work, and, 3) for shareholders, with efficiencies driving
enhancement to our profitability, margin and returns.
Through H1 FY22, we developed our improvement plans,
with particular focus on managing our cost base, as well
as tactical interventions to better utilise and extend our
sandwich and ready meal capacity. Across these areas,
we are targeting delivery of £30m of annually recurring
benefit in FY24. To unlock these improvements, the Group
will invest a total of approximately £24m comprising of
operating and capital costs of which £16.1m has been
incurred in FY22. We progressed well against these plans
in the year. In particular, we transitioned our organisational
model from a matrixed structure, to an integrated
organisational model with clear functional leadership
and accountability. We also delivered a number of
cost-focused initiatives, which helped us in managing
costs in the most inflationary environment our business
has ever seen. On capacity, the interventions we made
enabled us to deliver strong customer service through
our busy summer period.
Going forward, our focus will be on continuing to deliver
the first phase of the programme including ongoing
initiatives on people, fixed cost and capacity. Further
phases of work, notably on operational and technological
excellence are in development and we aim to launch
these during FY23.
Better Greencore
19Strategic Report | Directors’ Report | Financial Statements
20 Greencore Group plc Annual Report and Financial Statements 2022
“Food is at the heart of what we do,
and we recognise that as a convenience
food leader we have an important role
to play in improving food for both
people and planet.”
Andy Wright
Head of Sustainability
Sustainability
What we eat matters. By making products
that are nutritious, affordable and taste great
we make it easier for people to make choices
that are good for their health and wellbeing,
support local communities, and reduce the
impact of food choices on the natural world.
For us, the concept of ‘better’ is about
making a meaningful difference for all
our stakeholders – whether they are
end-consumers, shareholders, customers,
colleagues, the communities in which
we operate, or the wider planet. From the
outset, we deliberately set out to align our
purpose with our sustainability strategy to
ensure doing the right thing is part of our
business DNA. We want to do our part to
ensure the future of the planet is a better
one. This is why we have named our
sustainability strategy our Better Future Plan.
Our Better Future Plan consists of three
interlocking pillars: Sourcing with Integrity;
Making with Care; and Feeding with Pride;
encompassing both our environmental
and social commitments. Our strategy helps
us define the key delivery plans we need
in order to progress and also defines the
foundations we need to work on to support
the rest of the strategy.
Plan
Our Better Future
21Strategic Report | Directors’ Report | Financial Statements
People at the Core
Foundations
Governance Risk management
Transparency
(data and reporting)
Embedding
(communications
and upskilling)
Climate transition
Responsible sourcing
We will source sustainable ingredients
with transparency by holding ourselves
and our suppliers to the same high
standards of integrity.
Human rights
We respect the human rights of
everyone who works for, and with us.
Net Zero
We will use less to make more by
becoming more resource-efficient
and operating a Net Zero business.
Food waste
We will halve food waste within our
operations and work with others to
minimise waste in our supply chains.
Community
We will invest in our local communities
by working to alleviate food poverty
and providing economic opportunity.
Healthy and sustainable Diets
We will design products with health,
affordability and sustainability in mind;
by identifying where the best
opportunities are to meet all three
requirements, while not
compromising taste.
Sustainable packaging
We will ensure our packaging has the
lowest planetary impact by making
it easier to recycle and eliminating
single-use plastic.
Delivery Plans
Iegry
Sourcing with
Care
Making with
Pride
Feeding with
By 2040, we will operate
(Scope 1 & 2) with Net Zero
emissions
By 2030, we will have
increased our positive
impact on society
through our products
By 2030, we will source
our priority ingredients
from a sustainable and
fair supply chain
Our standalone Sustainability Report
for FY22, part of our Better Future
Plan, will be released in January 2023;
previous reports can be found at:
https://www.greencore.com/
sustainability/sustainability-hub/
22 Greencore Group plc Annual Report and Financial Statements 2022
Year
Sustainability continued
We have made good progress on our
foundations: data; embedding; and risk
analysis; but this is not yet flowing through
to absolute reductions in our carbon
footprint. We are looking at ways to
accelerate delivery, and we also continue
to focus on collaboration to drive the
systems level change required.
This year, we refreshed our materiality
assessment as part of our two-year review
cycle to ensure we keep pace with the
ever-evolving sustainability landscape.
Our materiality assessment aims to identify
and prioritise the most important sustainability
issues for our business. The development
of our Better Future Plan was informed by
identifying the areas that are most material
to our stakeholders and ensuring alignment
to the UN Sustainable Development Goals.
We have aligned our FY22 assessment
with the double materiality approach by
considering materiality through two lenses,
the external impact and the business impact.
We engaged 43 stakeholders through a
combination of surveys and interviews.
We also held 18 deep-dive interviews with
subject matter experts to gather qualitative
insight on the material topics as well as on
Greencore’s performance and opportunity
areas. This insight has been used to update
our overall materiality assessment and to
inform the prioritisation of actions for us
across a broad strategy.
We have worked on improving transparency
and increasing disclosures in our reporting.
We have completed detailed scenario analysis
as part of our climate risk analysis, following
Taskforce on Climate-related Financial
Disclosure (‘TCFD’) guidelines and assessing
sustainability risk is an area we have built into
our overall assessment of business risk. We
are gaining real insights from this analysis
which develops our thinking on helping to
build a resilient business. Further details on
our climate action are detailed in the
Sustainability section on Climate transition
on page 29.
Our sustainability planning has developed significantly over the last two
years, and we’re now well on our way to embedding sustainability as part
of our everyday business.
in review
Our total carbon footprint is made up of
emissions from our direct operations (Scope
1 and 2), which represents 6% of our total,
while our indirect emissions (Scope 3) from
the ingredients we source and the products
we place on the market represent the
majority (94%) of our total footprint. The
most significant reductions will therefore
come from collaborating with our customers
and suppliers to reduce our indirect Scope 3
emissions, notwithstanding this we recognise
the importance of Scope 1 and 2 and are
continuing to look to accelerate our plans
on energy reduction.
We have made good progress on
collaborating with customers; the nature
of our business means we are significantly
influenced by our customers’ strategies and
behaviours. Our product footprinting trial
has been successful and showed us how to
eco-score an entire category, rather than an
individual product. This has huge potential to
give us the data we need to make decisions
on product formulations. We recognise that
we need deeper conversations with our
customers in order to make this happen,
and we are preparing for those discussions
by gathering both detailed market insight
and robust internal data.
Looking ahead, we need to move from
planning to delivery. Our sustainability
initiatives are now sufficiently matured to
allocate ownership to specific roles, and we
are embedding accountability with individual
executives, which will in turn support a
remuneration framework. We have also
refreshed our governance model for
sustainability to support the next phase of
business ownership and delivery, including a
change to executive governance for FY23 to
include a regular sustainability review with
the Group Executive Team.
We are also working to broaden sustainability
capability and knowledge across the
business, upskilling our teams and exploring
avenues to partner with customers to help
elevate their expertise too, which will in
turn help to bolster our activities. Given
the current wider global difficulties, we
recognise that we are likely to face a very
challenging macro-economic environment
for several years to come, but believe
that it is because of these challenges that
sustainability is more important now than
ever. We are confident that Greencore’s
sustainability strategy will play a crucial role
in the long term and continued success of
the business.
23Strategic Report | Directors’ Report | Financial Statements
Sourcing
Responsible sourcing
Our products are made from ingredients
sourced from around the world. We have
a significant global supply chain which we
hold to high standards of accountability and
transparency, so we make it our business
to know where our ingredients come from,
how they are produced, the impact they
have on the environment, and the long term
challenges their use may pose to the
business, such as rising costs and tougher
access to key commodities.
We aim to responsibly source 100% of our
priority raw materials by 2030. In order
to achieve this aim, we define what both
‘responsibly sourced’ and ‘priority raw
materials’ mean for us, which we determine
through a process of risk, and update
annually.
It’s not possible to take a ‘one size fits all’
approach to ingredients – each individual
supply chain comes with its own challenges
around biodiversity, climate change, water
scarcity, deforestation and animal welfare –
and we have different levels of control over
each, depending on whether they are a
priority raw material or a traded commodity.
However, our sustainability risk assessment
model enables us to identify and take action
on hotspots identified throughout our
supply chains. We are focusing on priority
ingredients that carry the greatest sourcing
risks from three areas: forests, fisheries
and field.
For forests, we are committed to eliminating
deforestation and ecosystem conversion in
the sourcing of soy, palm oil and timber.
For palm oil ingredients within our core
operations, 100% are from Roundtable
on Sustainable Palm Oil (RSPO) certified
sources. In addition to our core business,
we also own a subsidiary business, Trilby
Trading Ltd, whose core activity is vegetable
oil trading in Ireland. The majority of the oils
Trilby trade are palm oil, of which 10% are
from RSPO certified sources (segregated and
mass balance combined). For soy, we are
signatories to the UK Soy Manifesto – a
collective industry commitment to ensure all
physical shipments of soy to the UK are
deforestation and conversion-free by 2025.
We are working with suppliers to set
individual transition plans to ensure we meet
this commitment.
For fisheries, we aim to source all our wild
fish sustainably, with 100% of our tuna
sourced from pole and line fishing, Marine
Stewardship Council (‘MSC’)-certified
fisheries or from those with a Fishery
Improvement Project in place. Meanwhile,
100% of our cold-water prawns are from
MSC fisheries and 100% of our warm-water
prawns are Best Aquaculture Practices 4 star.
In the field, 100% of our fresh produce raw
materials are grown in accordance with Red
Tractor (UK) or Global GAP (rest of the world)
standards for good agricultural practice. This
means that the farmers and growers that
supply us work to control their use of
agrochemical inputs and fertilisers, and
consider the environmental impacts of their
farming practices. Our growers demonstrate
that they are meeting these standards through
independent third-party audits conducted by
accredited providers. These schemes ensure
our fresh produce raw materials do not have
unnecessary impacts on the environments in
which they are farmed.
Human rights
We’re committed to championing
internationally recognised human rights
standards and safeguarding the people who
work for us, with us, and who are affected by
our activities around the world. Child, forced,
and compulsory labour remains a serious
concern in many of the countries where our
ingredients originate. Such cases are often
hidden due to the complexity of global
supply chains, and while we have not been
made aware of specific cases to address
within our operations, this does not mean
that the problem does not exist.
Under the UN Guiding Principles on Business
and Human Rights, companies are expected
to actively demonstrate that they do not
infringe on human rights through their
operations or business relationships. As such,
we undertake ethical risk assessments of our
raw materials to identify areas within our
supply chains that are most at risk of human
rights abuses, including modern slavery. This
model is based on outputs from the Food
Network for Ethical Trade Risk Assessment
Tool and is applied in a ‘double-analysis’
approach that considers the country of
manufacture for all the foods that we buy,
including the country of origin for the
ingredients. This data is used as part of our
supplier engagement work to ensure we
focus on high-risk areas.
We work hard to ensure that everyone is
treated fairly within our global food supply
chains, and we also take direct action on
human rights abuses when we uncover
them. This requires a collaborative effort
from everyone in the food industry, which
is why we have joined a number of initiatives
including the Modern Slavery Intelligence
Network, the Food Network for Ethical
Trade, and Stronger Together, so we can
actively help prevent and disrupt human
rights abuse at its source. We are dedicated
to improving the lives of those who have
experienced modern slavery where we can,
and have partnered with the Bright Future
programme to help survivors access
safe, secure work at a Greencore site
of their choice.
For more information on our approach to
social sustainability and to read our FY21
Modern Slavery and Human Trafficking
Transparency Statement, please visit
www.greencore.com.
with Integrity
24 Greencore Group plc Annual Report and Financial Statements 2022
Making
Energy efficiency
Reducing greenhouse gas (‘GHG’) emissions
through intelligent energy use will help us
transition towards a Net Zero future. We have
committed to science-based targets to help
guide us to succeed, and we are continually
monitoring our use of energy and water to
assess our progress.
The obvious challenge in the last 12 months
has been the ongoing impact of production
change post the COVID-19 period, and as our
production levels have increased our energy
use has increased also. This has resulted in
increases in certain key metrics and targets
versus our base year, as shown in the
Metrics and Targets section on page 33
and described below.
In FY22, in absolute terms our total gross
Scope 1 and 2 carbon emissions increased
from the previous year from 90,278 tonnes to
92,655 tonnes, an increase of 2.6%, and from
our base year of 89,606 tonnes an increase
of 3.4%, as a result of increased production
levels. In contrast as a relative measure,
as our overall production levels increased our
manufacturing energy intensity ratio (kWhp/
tonne) decreased from 1,315 kWhp/tonne
to 1,254 kWhp/tonne, an improvement of
4.6% in our efficiency.
Our Net Zero plan has focused on three areas
of activity that each help populate our overall
delivery plan:
• Data and insights: ensures we have the
right data and KPIs in place to focus
activity and drive improvement. It also
involves the auditing of our sites to ensure
we are identifying the right projects
to implement.
• Brilliant basics: ensures we have the right
information available to our site teams
to enable best practice actions to be
implemented, and ensures we are
sharing information on how best to
manage energy.
• Step change projects: defines Group-
wide projects for delivery, including the
scoping of significant projects on solar
technologies.
Food waste
We are committed to reducing food waste by
50% by 2030. Food waste is a global problem
and highly material to our business. By
reducing food waste, we can help improve
food security and mitigate the effects of
climate change, while driving efficiency
benefits for the business. We measure food
waste as a KPI against our total food handled.
This data is used to evaluate performance
and review progress against our UN SDG
Friends of Champions 12.3 commitment
1
,
which will see us targeting a 50% reduction
in food waste by 2030 against a FY17
baseline year. Our food waste baseline year
of FY17 differs from our scope 1, 2 and 3
carbon emissions baseline year of FY19 due
to reporting in line with the food industry
collaborative programme, the UK Food
Waste Reduction Roadmap.
In FY22, our food waste, measured as a
percentage of the product and ingredient
handled, was 8.48%. This is an increase from
last year’s performance at 8.06%, primarily
due to the simplification of ranges during the
period of COVID-19. However, to date we
have achieved an 11% reduction from our
base year (FY17) in food waste as an overall
percentage of food handled.
Community
Our business depends on the communities in
which we operate. We can only be as healthy
and sustainable as they are, so we see it as our
responsibility to actively engage with and
support our local communities however we
can. Food is the heart of our business and we
strongly believe that everyone should have
access to good food. Food has a significant
impact on health, wellbeing and
development, and can help to build friendlier,
stronger, healthier communities. The
extremely challenging current economic
situation means this is now more important
than ever.
Food donation continues to be a central focus
for our community engagement efforts. We
work with a number of food redistribution
organisations – including FareShare, The Felix
Project, The Bread and Butter Thing, and the
Trussell Trust – in order to ensure our surplus
food reaches those who need it. Through
these partnerships we are able to redistribute
short shelf life, chilled, frozen, and bulk
products, as well as any surplus from new
product trials. In FY22, we redistributed the
equivalent of 1.63m meals.
In 2022, we passed a milestone of the
redistribution of the equivalent of 4m meals
to FareShare during our partnership and were
awarded FareShare’s ‘Leading Food Partner’
status, celebrating businesses who have
shown commitment to diverting surplus
food to FareShare to provide meals for
people in need.
This year has also seen us continue our
partnership with Ingredients 4 Life in
collaboration with City Hearts. This initiative
teaches cookery to survivors of modern
slavery, equipping them with life skills,
self-confidence and providing a safe space
in which to build trust in others.
with Care
Sustainability continued
Reduction from our base year in
food waste
11%
Number of surplus meals
we redistributed in FY22 the
equivalent of
1.63m
1 https://champions123.org/
25Strategic Report | Directors’ Report | Financial Statements
Feeding
Healthy and sustainable diets
We want our products to taste great, but also
be better for people and the planet too. This
means taking positive steps to make sure our
meals form part of a healthy balanced diet as
well as ensuring our processes and products
contribute to a sustainable future.
Transforming our product portfolio is central
to this endeavour, particularly in addressing
our Scope 3 emissions and those of our
customers. We are predominantly an
own-brand manufacturer, producing
products on behalf of our customers and
therefore it is imperative that we work closely
with our customers on their own policies to
deliver joint goals. Collaboration is key in
moving forward and enabling the
development of lower impact products.
Healthy and sustainable diets have been a key
focus for us this year, in particular the use of
data to help guide our delivery plans. Our
health score is based on the UK Government’s
Nutrient Profiling Model (‘NPM’). The NPM
was developed to review the composition
of foods, balancing the value of nutrients
that are important to the diet against those
deemed not to be. Whilst the government’s
approach is specifically linked to certain
categories, we have applied this against our
total portfolio of products and have classified
products with an NPM <4 as ‘healthier’.
Our analysis shows that 80% of volume sales
are from products with an NPM score of <4.
In addition, this year for the first time we are
able to report on animal and plant-based
protein, in line with the World Wildlife Fund
for Nature (‘WWF’) Protein Disclosure Guide.
The WWF Basket tracks retailers’ progress
toward halving the environmental impact
of the average UK shopping basket by 2030.
Sustainable diets are a core part of achieving
this, and we are monitoring progress on
rebalancing animal and plant protein sales.
Our analysis of the percentage volume sales
(tonnes) from animal and plant-based protein
sources shows us that 69% of our products
are meat-based, 24% are vegetarian, and 7%
are plant-based (vegan). In future, we will
look to increase the granularity of our data.
The principal way Greencore can rebalance
protein is not simply through increasing sales
of vegan products, but by reducing animal
protein content within existing products.
However, we will need to be able to measure
the change in protein content in each product
for this to be visible, rather than the overall
amount of products that fall into a category.
During FY22 we have relaunched a small
number of reformulated products focusing
on improved health and sustainability
measures, which we are monitoring closely
for customer sentiment. We have also
been working with suppliers to identify
opportunities for dairy reduction through
alternative ingredients. Concentrated cream,
for example, is a natural product that retains
the flavour and mouthfeel of cream whilst
having a lower dairy content.
Product footprinting is central to our work on
healthy and sustainable diets. We are currently
trialling product footprinting technology with
Tesco and Mondra, enabling us to conduct
eco-accounting at scale through the
footprinting of a large number of products
at pace. We are able to model sustainability
impacts across carbon, water usage, water
pollution and biodiversity for an entire
category. In addition, the software allows
us to create a formulation footprint for
each individual product, and then creates
a ‘digital twin’ of that product, allowing us
to experiment with different ingredients and
formulations to see the potential impacts
of different recipes.
In addition to our work on product
footprinting, we also sit on the steering group
for the Institute of Grocery Distribution (‘IGD’)
programme to create a harmonised approach
to environmental labelling for the UK food
industry. This work has involved a collaborative
project to test a series of prototype labels
with Pride
26 Greencore Group plc Annual Report and Financial Statements 2022
with consumers in a virtual reality
environment.
Looking ahead, we recognise sustainable
diets as a key part of Greencore’s future and
hence, we wanted a platform that helps us
future-proof our business, quantify and
translate future macro trends, support
and enable complex cross-functional
workstreams and bring robust, sustainable,
insight-led innovation to our customers – part
of this new platform is our newly established
Future Food Team. Healthy and sustainable
diets is a key enabler to their team strategy,
working in partnership with the Sustainability
Team to ensure every new project or material
we bring into Greencore has been through
our ‘sustainable diets’ rule set, ensuring we
have clarity and visibility of the alignment
with our broader plan in this space.
Packaging
Consumers increasingly expect retailers
and manufacturers to take bold action on
packaging, so it is up to us to find solutions in
which performance, cost and sustainability
can work together. We are working hard to
change the way we package our products,
looking at what we use to make our
packaging, and what happens to it after
it has done its job. We are setting challenging
goals and targets to reduce the amount of
packaging we use and the impact it has, as
well as making sure it never becomes waste.
Our packaging policy defines a ‘less and
better’ roadmap made up of three focus
areas: remove, reduce and recycle.
This year, we have made improvements
across all of our product categories. Within
salads, we have redesigned our existing salad
trays with a ribbing feature that uses less
plastic, while adding additional strength.
This change equates to 30 tonnes of material
savings per year.
Within ready meals, all of our oven-safe meal
trays are detectable for recycling and contain
a high degree of recycled plastic, and this
year, where possible, we switched our
microwaveable meal packaging to this
formula. This delivers a significant plastic
tonnage saving through the change of lidding
film and rigid thermoformed trays. The
reduction of more than 5.5m bowls from
a customer range is a great example of
this switch, which will save eight tonnes
of plastic a year.
Our sushi offer presents a unique set of
challenges as these products are often
regarded as a premium choice by consumers
who want to be able to see the individual
sushi pieces before purchase. As such,
any changes to the product’s lid need to be
carefully considered. While the existing lid is
made with at least 50% recycled plastic, we
have now created a hybrid pack that includes
a cardboard tray. We’ll be pursuing other
options in the future as we continue to
explore consumer expectations with this line.
Last year, we developed the first-to-market
truly recyclable paper sandwich skillet.
Following a successful launch, we continue
to investigate ways of improving this pack
further. Similarly, we are continuously scoping
out opportunities to make our moulded
plastic soup and sauce pots lighter in weight,
as well as exploring new technologies to
incorporate food-grade recycled plastic into
this packaging line.
Sustainability continued
27Strategic Report | Directors’ Report | Financial Statements
Embedding a Safety Culture
The health, safety and wellbeing of our
colleagues and visitors is our top priority. We
are continually working to improve the safety
of all our working environments, and we are
committed to developing a culture that puts
physical and emotional wellbeing at the
heart of our business. Our colleagues’
health, safety and wellbeing is critical to
the success of our business and we pursue
a comprehensive Health and Safety strategy
which includes priorities, action plans and
performance objectives for every area
across the business, and accounts for legal
occupational health and safety requirements.
While COVID-19 has not disappeared, in
FY22 we moved into a new chapter of ‘living
with COVID’. This has allowed us to remove
many of our controls, however we have
continued to practice good personal hygiene
and to take up vaccinations when offered.
We also recognise that COVID-19 and
the cost-of-living crisis has taken a toll on
mental health and wellbeing. We continue
to partner with GroceryAid, a charity offering
emotional, financial and practical help to
colleagues in the grocery industry. Site-
specific information, advice, guidance and
counselling is provided to colleagues who
may need it via a specially developed internal
resource called Talk2Us, and we also run
quarterly wellbeing webinars which have
been very well received by those attending.
Overall, our Reportable Accident Frequency
Rate (‘RAFR’) has shown an improvement
from 0.37 in FY21 to 0.33 (per 100,000
hours) in FY22.
Inspiring leadership
We are continuing to build a culture that
enables our people to achieve their potential
by embracing difference, building the
capability of our leaders, and harnessing the
power of a diverse workforce that represents
our customers and consumers.
We continued to invest in management and
leadership capability and saw circa 200 of
our team leaders complete a professional
development programme, directly and
positively impacting our colleagues’
experience at Greencore. We launched
our high-performing teams programme
designed to help our senior leaders
be effective, along with our extensive
involvement in ‘reverse mentoring’ in the
sector to help our leaders better understand
the barriers underrepresented groups
may have. We have seen marked gains in our
Manager Index, with individual improvement
in areas such as ‘managers and leaders
showing respect and care’ up by 14%
compared to the previous survey
Our early careers investments continued
to grow to help us ensure skills and talent
for the future. We continually assess the
competitiveness of our pay and benefits
to attract and retain the best talent, having
introduced a benchmarked job architecture
to provide clear career pathways for our
people. Our internal hire ratio, currently 44%,
continues to improve as we develop and
grow our own talent.
Engaging and effective teams
76% of our colleagues participated in our
annual ‘People at the Core’ engagement
survey and our overall engagement score
rose by two percentage points in FY22,
despite significant changes in the organisation
and challenges in our external environment.
We have over 14,000 colleagues who are critical to the success of our business.
People at the Core is at the centre of The Greencore Way. Our people strategy has three
pillars – Embedding a Safety Culture; Inspiring Leadership; and Engaging and Effective Teams.
Internal hire ratio
44%
People
at the Core
28 Greencore Group plc Annual Report and Financial Statements 2022
Gender diversity
Across the Group
FY22 61% male 39% female
FY21 60% male 40% female
At Board level
FY22 40% male 60% female
FY21 45% male 55% female
At Group Executive Team level
FY22
1
71% male 29% female
FY21 57% male 43% female
At Group Executive Team direct reports level (-1)
FY22 56% male 44% female
FY21 54% male 46% female
Sustainability continued
Inclusion and Diversity (I&D)
We believe we can ultimately differentiate
our business through our colleagues, so it’s
important to us that we create a culture
where our people can be themselves and
fulfil their potential. By focusing on inclusion
and diversity, we can make better business
decisions informed by diverse perspectives.
We can better reflect our customer and
consumer needs, and therefore better
anticipate change and respond with agility.
And we can rely on a capable, cohesive
colleague base, which feels valued
and motivated to progress and drive
our business.
Greencore is already an incredibly diverse
organisation, and it is important for us to
ensure that everyone’s experience of
working with us is one of inclusion, because
we know that diversity doesn’t work
without inclusion.
Our Inclusion and Diversity strategy sets our
agenda. In 2021, we undertook a significant
review of our cultural environment, exploring
the diversity of our colleagues along with
their lived experience of inclusion at
Greencore. We spent time with over
1,000 colleagues – 100 in greater depth –
across 20 listening groups, hearing stories,
experiences, and feelings about Greencore.
This led to the creation of the strategy,
sponsored by our Chief People Officer,
and led by our Head of Talent, Development
and Inclusion, supported by our Inclusion
Manager.
Attracting and retaining young talent is a
focus for us and we aspire to bring more
young talent into Greencore through our
investment in both early careers and
entry-level roles. We’re pleased to have
been accepted as part of the Good Youth
Employment Charter, through which we
have pledged to create more opportunities
for young people and support those in
underprivileged areas. We have also
partnered with the Institute of Grocery
Distribution (‘IGD’) to build and pilot a
reverse mentoring scheme, enabling senior
mentees and their reverse mentors from
different, non-competing companies to
open authentic discussions on inclusion
and diversity.
At the end of the financial year, 39% of all
colleagues were female. Our male-to-female
percentage ratio is 40/60 at Board level,
71/29 at executive-level, and 56/44 at the
Group Executive Team’s direct-report-level.
While the Group remains committed to
gender diversity, as a result of a challenging
labour market and the delivery of an
organisational restructure, our gender
diversity statistics have decreased since FY21
across the Group and at Group Executive
Team level in particular. The Group continues
to review gender diversity as a key metric,
and as a founding member of the 30% Club
– which strives for 30% of leadership
positions to be held by women, we commit
to keep driving progress in this area paying
particular attention to understanding and
tackling unconscious biases.
Perentage of female colleagues
39%
Male to female ratio at Board level
40/60
1 The male to female percentage ratio of the current Group Executive Team at the date of this Annual Report is 87/13.
29Strategic Report | Directors’ Report | Financial Statements
Taskforce on Climate-related Financial Disclosure (‘TCFD’)
Climate
transition
Introduction
Climate change is anticipated to impact
our business over the short, medium and
long term. Physical risks may impact our
operations and supply chain through extreme
weather events, such as flooding or droughts.
Transitional risks as a result of moving to a
low-carbon future may impact us through
changing consumer preferences or climate-
related regulation. Climate change also
presents opportunities for us, such as the
higher sales of lower GHG emission products.
To keep us on course, we established science
based targets, which are externally verified by
the Science Based Targets Initiative (‘SBTi’).
Under this programme, we have pledged to
reduce absolute Scope 1 and Scope 2
emissions by 46.2% by 2030 from a 2019
base year, and to reduce Scope 3 emissions
from purchased goods and services, and
upstream transport and distribution, by 42%
per tonne of product sold by 2030, from a
2019 base year. We assess our performance
against long term targets and short term key
performance indicators.
We complete an annual carbon footprint
analysis across our business. This data enables
us to determine more granular emissions
profiles across our product categories to
inform our strategy and risk management
process. Our baseline Scope 3 footprint has
been determined using carbon factors from
published average carbon footprint data for
individual raw materials. We intend to
continue honing our Scope 3 footprint by
refining supply chain carbon data with a view
to replacing industry carbon factors with
specific live data for key hotspots.
In FY22, our total gross Scope 1 and 2 carbon
emissions increased from the previous year
from 90,278 tonnes to 92,655 tonnes, an
increase of 2.6%, and from our base year of
89,606 tonnes an increase of 3.4%. While
FY22 did not see us reduce our Scope 1 and 2
emissions, we remain committed to achieving
net zero by 2040. Our total Scope 3 footprint
for FY22 is 1.48 (m tonnes of CO
2
e), an
increase on the previous year (1.33m tonnes )
which was impacted by lower production
volumes during COVID-19, but a decrease
from our FY19 base year of 1.61MT by 8.1%.
Our performance data is outlined in full on
page 33.
Following our initial disclosure in November
2021, this year was our first year conducting
scenario analyses to estimate the potential
impact of climate risks and opportunities.
Now we have completed scenario analysis
for the first time, future analysis will look
at potential mitigation strategies as part of
our strategic planning, and the next phase
of scenario analysis will include modelling of
the impact of changing consumer patterns.
Listing Rule 9.8.6R Compliance
Statement
Greencore plc has complied with all of
the requirements of LR 9.8.6R by including
climate-related financial disclosures in this
section (and in the information available at
the locations referenced therein) consistent
with the TCFD recommendations. Our
sustainability report for FY22 is to be released
in January 2023 as a standalone report; all
TCFD related disclosures are included in this
Annual Report.
Governance
Greencore’s corporate purpose and
sustainability strategy are set by the Board.
Our Board monitors our overall sustainability
performance against our stated ambition and
targets. The Board also reviews potential
risks and opportunities associated with our
sustainability strategy and corporate purpose,
and set and monitor progress against our
climate related metrics.
In addition, the Board oversees our Better
Future Plan, which includes climate-related
matters, which is one of our core strategic
business priorities. A sustainability update is
provided at each scheduled bi-monthly
Board meeting by the Head of Sustainability,
where climate impact and action, a core
element of our sustainability strategy, is
discussed, alongwith progress towards
targets and key performance indicators.
The Chief Executive Officer has responsibility
for overall performance of the Group, which
includes sustainability governance. Non-
Executive Director, Helen Rose, is the Group
Sustainability Engagement Director and is
the Board’s sustainability champion. Helen
is responsible for reviewing the Group’s
sustainability objectives and performance,
including the delivery of the Group’s
sustainability strategy, as well as providing
updates on progress on sustainability matters
to the Board.
The Group has established a Sustainability
Steering Committee comprising leaders
from various functions within the Group.
The Sustainability Steering Committee has
overall responsibility for the delivery of our
sustainability strategy, and specific oversight
of our overall climate strategy. The Committee
feed into the bi-monthly Board update
provided by the Head of Sustainability,
and review climate related performance
objectives.
Reporting to this Committee are six
Sustainable Business Management Groups
(‘SBMGs’) that provide a cross-functional
forum to develop and steer our strategy
at an operational level. The SBMGs cover
responsible sourcing and human rights,
ethics, energy and environment, packaging,
communities, and healthy and sustainable
diets. These steering groups are chaired by
senior leaders. Performance reviews and key
Greencore
Group plc
Board
Non-executive
Sustainability
Engagement
Director
Sustainability
Steering
Committee
Responsible sourcing
and human rights
Communities
Ethics
Packaging
Energy and
environment
Healthy and
sustainable diets
Governance framework
Sustainable Business
Management Groups (‘SBMGs’)
30 Greencore Group plc Annual Report and Financial Statements 2022
TCFD continued
decisions are passed up the governance
hierarchy, initially to the Sustainability
Steering Committee, and then to the Board
via bi-monthly reviews.
The SBMGs meet at least four times a year
to exchange knowledge and best practice,
to align strategic thinking and to provide
recommendations for the Sustainable
Steering Committee to consider. Each
SBMG is made up of senior executives and
functional teams who are responsible for
driving action across all tiers of the business
through the implementation of specific
improvement plans. The day-to-day
management and coordination of activities
in relation to climate risk is carried out by the
Head of Sustainability and the wider
sustainability team.
Risk type Description
Time
horizon Risk/Opportunity description
Potential mitigations that are
being considered as part of
our strategic planning
Physical
risk
Chronic climate change
• Changes in precipitation
patterns, rising mean
temperatures & rising
sea levels
Short/
Medium/
Long
Risk:
• Reduced availability of raw materials
increased procurement costs
• Disruption to operations due to extreme
weather events
• Costs associated with repairs
• Weather conditions such as high
temperatures causing stock losses
• High temperatures change in demand
• Working with our
suppliers to create
sourcing plans to
secure supply of
raw materials
• Flexibility of supply
chain
• Flood emergency and
contingency plans for
at-risk locations
Acute climate events
• e.g., heatwaves, drought,
floods, storms, crop pests
and animal diseases
Short/
Medium/
Long
Transition
risk
Policy and legal
• Increased pricing of
GHG emissions
• Regulation of existing
products and services
Short/
Medium
Risk:
• Increased operating costs
• Potential changes in consumer preferences
• Majority of cost
assumed to be passed
on to customers to
encourage purchase of
lower GHG emission
products
Market
• Changing consumer behavior
• Changing raw materials cost
• Changing operational
methods
Short/
Medium
Risk:
• Reduced revenue due to decreased demand
• Increased operating costs due to increasing
raw material costs
• Flexibility of
supply chain
Reputation
• Shifts in consumer
preferences
Short/
Medium
Opportunity:
• Increased revenue through demand for
low-carbon products and services
• Development of lower
GHG emission
products
Technology
• Substitution of existing
products, services, or assets
with lower emission options
• Transition to lower emissions
technology
Short/
Medium
Risk:
• Write off/early retirement of existing assets e.g.,
lorries, CHP boilers, ovens and refrigeration units
• Increased costs of adopting or deploying new
practices/technology
Opportunity:
• Reduced operating costs through efficiency gains
• Reduced exposure to fossil fuels and volatile prices
• Energy management
in line with engineering
asset management
Strategy
Sustainability is considered in the context
of our overall strategy-setting process. On
climate in particular, consideration is given
both in relation to how strategic choices on
‘where to play’ (what customers, categories
and channels we have exposure to) and ‘how
to play’ (how we manage our operations)
will impact on delivery of our climate
commitments. In the formulation of our
Group strategy, consideration is also given
to our sustainability strategy, and the
commitments and targets we have set as
part of that. More broadly, as the Group
strategy is executed, through deployment
of capital for either organic or inorganic
investment, a sustainability assessment
is carried out, including an assessment
on climate impact. To support this, we are
building in an internal price of carbon into
our capital request processes.
Greencore’s major sustainability ambitions of
Sourcing with Integrity, Making with Care
and Feeding with Pride address climate
change and mitigate the business’s exposure
to the different risks arising from climate
change. Our Scope 3 emissions from
products and our supply chain comprise the
majority of our total emissions footprint.
Given that we do not control our Scope 3
emissions, due to their indirect nature,
achieving Scope 3 reductions in our value
chain will require substantive coordination
and collaboration with suppliers, as well as
strategic communication with our
Key
Time period Years Reason
Short
0 to 5 years Aligned to our financial planning cycle
Medium
5 to 15 years Nearer term to capture transition risks and opportunities
Long
15 to 50 years Longer term to capture physical risks and opportunities
31Strategic Report | Directors’ Report | Financial Statements
customers. As such, our ability to influence
carbon reduction presents both a risk and an
opportunity to our decarbonisation strategy
and Net Zero commitment – the success of
our relationships both upstream and
downstream will prove critical.
The process of identifying climate-related
risks and opportunities was done via a
qualitative risk assessment process. This
was carried out to identify the climate-
related physical and transition risks and
opportunities that are material to Greencore.
These key significant risks were then built
into the scenario analysis process to fully
capture relevant areas of the business.
Quantitative scenario
analysis
To further build on these qualitative results,
we adopted a quantitative approach to
determine the potential financial impacts
associated with the identified material
climate risks for each exposed product
category. We have engaged with external
climate consultants to leverage their
expertise. Fundamentally, scenario analysis
will allow Greencore to test its current
strategies against a set of defined scenarios.
The outcomes of the analysis will inform the
climate change strategy of Greencore as well
as help in developing contingency plans in
response to possible future risks and
opportunities.
A materiality assessment was conducted,
based on a relative ranking of climate risks
and financial materiality to determine
the scope of analysis for FY22. Six food
categories were modelled for FY22 scenario
analysis (red meat, poultry, dairy, cereal,
vegetables and produce) and property.
This analysis was conducted to quantify
the financial impacts of both physical and
transition climate risks on Greencore in
2030, with an important focus on a low-
carbon transition. The objectives of this
analysis were primarily to allow Greencore to
understand the nature and scale of climate
risks’ impacts on its business model and to
identify risk hotspots. Two climate scenarios
were constructed to assess the impacts:
Risk type Ingredients Property
Physical risks
(RCP8.5)
• Changes in production volumes leading to an
increase in procurement cost
• Increased costs due to a carbon tax on
emissions in the agricultural sector
Transition risks
(RCP1.9)
• Floods – Property damage and loss in sales
• Increases in ambient temperatures – increase
in costs due to increased energy consumption for
refrigeration/cooling
• Heatwaves – loss of stock
• Increases in compliance costs due to a
carbon tax on Scope 1 and Scope 2
emissions
Climate scenarios:
Area of focus
Transition risk
RCP1.9 – 1.5°C
Physical risk
RCP8.5 – 4°C
Red meat
Very high Very low
Poultry
Very high Very low
Dairy
Very high Very low
Cereal
Very high Very low
Vegetables
Medium Very low
Produce
Low Very low
Property
Very high Very low
Assessment of impact:
Commentary:
* Financial impacts: determined via our existing business risk exposure profiles, Very high (>£5m); High (£3m to £5m), Medium (£1m to £3m), Low (£0.25m
to £1m); Very low (<£0.25m)
Modelling assumptions: An assumption that Greencore’s business activities (operating model, emissions etc.) in 2030 remained constant at FY21 levels and
Greencore does not innovate or mitigate the impacts of change of its sourcing strategy. An assumption that increases in costs are fully absorbed by Greencore
and not passed onto customers, to demonstrate the potential scale of risk to Greencore.
The assessment showed that the key risks for Greencore mainly arise from carbon pricing under the low-carbon transition scenario.
The impacts from chronic climate change and acute climate events on the ingredient categories studied were not found to be material
for Greencore in 2030. The physical risks to Greencore’s operated property are also relatively immaterial.
32 Greencore Group plc Annual Report and Financial Statements 2022
TCFD continued
Risk management:
The identification and management of
climate-change risks follow our established
risk-management process.
The Board is responsible for establishing and
maintaining the Group Risk Management
Policy. The Audit and Risk Committee,
under delegation from the Board, provides
structured and systematic oversight of
the Group’s risk management and internal
control systems. They review and monitor
the effectiveness of the Group’s risk
management and internal control systems
throughout the year.
The Risk Oversight Committee supports the
Audit and Risk Committee in the risk
management process, through additional
monitoring and evaluation of the risk
environment and the controls in place to
manage those risks. In addition, it gives
consideration to emerging risks which may
impact the Group in the future.
We have developed a sustainability risk
assessment model that enables us to see and
take action on hotspots in our supply chains.
Our sustainability risk assessment model
assesses all of our ingredients and ranks
them for potential issues including animal
welfare, carbon, deforestation, climate risk,
water scarcity and biodiversity, using external
databases. The outputs from the
sustainability risk assessment are utilised to
complete the sustainability risk register,
directly feeding into the Group risk
management process. The Group has
identified the overall impact of climate
change as a principal risk. The most
significant areas of risk relate to the potential
impacts on raw material availability through
changes in global weather patterns or
extreme weather events, meeting our carbon
reduction targets, consumer demand leading
to adjustment in product portfolio, and the
disruption of manufacturing and logistics
operations.
33Strategic Report | Directors’ Report | Financial Statements
Metrics and targets:
This section discloses our operational energy consumption, carbon footprint, and energy efficiency initiatives in line with the UK Government’s
Streamlined Energy and Carbon Reporting (‘SECR’) Regulation. A description of our performance against our targets and key performance
indicators is presented on pages 24 and 29. Our food waste baseline year of FY17 differs from our scope 1, 2 and 3 carbon emissions baseline
year of FY19 due to reporting in line with the food industry collaborative programme, the UK Food Waste Reduction Roadmap.
Annual GHG emissions (tonnes CO
2
e)*
Emissions from Absolute Group GHGs: FY22 FY21 Base FY19
Combustion of fuel and operation of facilities (Scope 1) 72,320 68,386 60,952
Electricity, heat, steam and cooling purchased for own use (Scope 2) 20,335 21,892 28,654
Total gross emissions (tCO
2
e) Scope 1 and 2 92,655 90,278 89,606
Green tariff (19,563) (21,042) (28,624)
Total net emissions (Scope 1 and 2) 73,092 69,236 60,982
Scope 3 emissions (m tonnes of CO
2
e) 1.48 1.33
1
1.61
2
GHGs Intensity Measure
Revenue 1,739,600 1,324,800 1,446,100
Scope 1 & 2 kilogrammesCO
2
e/£1 revenue 0.053 0.068 0.062
Scope 3 m tonnesCO
2
e/t product 2.71 2.71 2.75
* Greenhouse gas emissions data is taken from total Group operations for the UK and Ireland. Our UK-based GHG emissions account for >99% of the total gross emissions
(tCO
2
e). Our GHG emissions have been calculated using the GHG Protocol Corporate Accounting and Reporting Standard, and emissions factors from The Department for
Environment, Food and Rural Affairs’ (‘DEFRA’) UK Government GHG conversion factors for company reporting (where factors have not been provided directly by a supplier).
1 Adjusted historical data for Scope 3 emissions reflecting updates to data collection and ensuring consistency of approach.
Annual energy consumption*
Emissions from: FY22 FY21 Base FY19
Fuel non-renewable (MWh) 346,107 319,353 289,954
Fuel renewable (MWh) 1,498 1,960 1,045
Total fuel consumption (MWh) 347,605 321,313 290,999
Total electricity consumption (MWh) 105,087 103,053 108,012
Total energy consumption (MWh) 452,692 424,366 399,011
* Total energy consumption in kWh was calculated from primary consumption data, using standard conversion factors from the UK Government GHG Conversion Factors
for Company Reporting 2022. The data was collated specifically for the Annual Report. Energy consumption data is for UK and Ireland operations. FY19 and FY20 have
been adjusted to remove Premier Molasses and United Molasses which were sold in FY21.
Key Performance Indicators (for manufacturing only)
Emissions from: FY22 FY21 Base FY19
Total primary energy consumption (MWhp) 488,497 466,920 467,617
Energy intensity ratio (kWhp/tonne) 1,254 1,315 1,235
Water consumption (megalitres) 2,709 2,377 2,255
Water per tonne of production (m
3
/tonne) 6.96 6.70 5.96
* Our manufacturing KPIs are calculated from manufacturing sites only, excluding distribution and offices.
Food waste and surplus
Tonnes: FY22 FY21 Base FY17
Food waste 36,737 31,521 42,180
Animal feed 6,108 4,913 7, 285
Surplus redistribution 688 886 746
Total food handled 433,012 391,215 442,865
Food waste as a % total food handled* 8.48% 8.06% 9.52%
* Updated method of reporting to reflect new Waste and Resources Action Programme (‘WRAP’) guidance (2020) for reporting food waste, as a percentage of total food
handled (not just production), and complies with the international Food Loss & Waste Standard.
34 Greencore Group plc Annual Report and Financial Statements 2022
FY22
FY21
FY22
FY21
FY22
FY21
Financial
We use our Key Performance Indicators (‘KPIs’) to assess and monitor the
performance of the Group and to measure our progress against our strategic
objectives. Our financial KPIs measure progress of our strategic priorities in
delivering profitability, returns and cashflow. In measuring this progress,
we also consider the relationship between each of these measures.
All of the Group’s KPIs are non-IFRS measures or Alternative Performance
Measures (‘APMs’). The definitions, calculations and reconciliations of all APMs
(including these KPIs) to IFRS are set out within the APMs section on page 179.
Pro Forma Revenue Growth
+29.4%
(FY21: +6.2%)
Strategic relevance
The Group uses Pro Forma Revenue
Growth as it believes this provides a
more accurate guide to underlying
revenue performance. It is central to
our strategic pillar of Growth.
FY22 performance
Pro Forma Revenue Growth increased
by 29.4% in FY22 driven by underlying
volume growth, contribution from new
wins and increased pricing as we pass
through inflation.
Strategic relevance
The Group uses Adjusted Operating Profit
to measure the underlying and ongoing
operating performance of each part of the
business and of the Group as a whole.
FY22 performance
Adjusted Operating Profit in FY22 was
£72.2m, an increase of £33.2m against FY21.
This was primarily driven by the recovery
of demand post COVID-19.
Strategic relevance
The Group uses Adjusted EPS as a
key measure of the overall underlying
performance of the Group and returns
generated for each share.
FY22 performance
Adjusted EPS was 9.2 pence compared
to 3.7 pence in FY21, an increase of
5.5 pence (148.6%). This measure
improved in FY22 due to an increase
in Adjusted Operating Profit. The impact
of the share buyback was negligible
due to timing in the year.
Adjusted Operating Profit
£72.2m
(FY21: £39.0m)
Adjusted Earnings per Share (‘EPS’)
9.2p
(FY21: 3.7p)
Profitability
Our Key Performance Indicators
35Strategic Report | Directors’ Report | Financial Statements
FY22
FY21
FY22
FY21
FY22
FY21
Link to remuneration
The remuneration of Executive Directors is
aligned closely with financial and
non-financial KPIs through the Company’s
Performance Share Plan (‘PSP’) and Annual
Bonus Plan (‘ABP’). PSP awards granted in
FY22 (and those intended to be granted in
FY23) are based on a scorecard of three
equally-weighted measures comprising
ROIC and Adjusted EPS, alongside Total
Shareholder Return (‘TSR’). The financial
element of the ABP continues to be linked
to Adjusted Operating Profit (weighted
50%) and Free Cash Flow (weighted 25%),
with the remaining 25% linked to personal
and strategic objectives selected each year
to reflect our non-financial KPIs and other
short term business priorities.
See Report on Directors’ Remuneration on page 83
Strategic relevance
The Group uses Free Cash Flow to
measure the amount of underlying cash
generation and the cash available for
distribution and allocation.
FY22 performance
Free Cash Flow in FY22 was an inflow
of £58.7m compared to £72.2m in FY21.
The main driver of the decrease is a more
normalised working capital inflow in
FY22 post COVID-19.
Strategic relevance
The Group uses Free Cash Flow
Conversion to measure how efficiently
profits from the overall underlying
performance of the Group are
transformed to cash available for
distribution and allocation.
FY22 performance
The Free Cash Flow Conversion metric of
46.3% brings the Group back in line with
conversion levels of FY19 at 47.3%.
Strategic relevance
The Group uses ROIC as a key measure
to determine what return is generated
from each part of the business, as well
as measuring the financial quality
of potential new investments.
FY22 performance
The Group’s ROIC in FY22 was 8.4%
which was significantly higher than
the FY21 measure of 4.5%. ROIC was
positively impacted by the increase in
Adjusted Operating Profit, which was
offset by an increase in the effective
tax rate from 15% to 19%.
ROIC
8.4%
(FY21: 4.5%)
Free Cash Flow
£58.7m
(FY21: £72.2m)
Free Cash Flow conversion
46.3%
(FY21: 78.2%)
Returns Cash Flow
36 Greencore Group plc Annual Report and Financial Statements 2022
Non-financial
We use our KPIs to assess and monitor the performance of the Group and to measure our progress against our
strategic objectives. Our non-financial KPIs are designed to measure progress against the key drivers of our
purpose – People at the Core, Sustainability, Excellence and Great Food.
% Engagement in survey
76%
(FY21: 74%)
Waste as % total food
handled
8.5%
(FY21: 8.1%)
Strategic relevance
Our employee engagement
score provides us with insight
into how committed our
people are to our goals,
how motivated they are to
contribute to our success
and importantly how likely
they are to recommend
Greencore as an employer.
FY22 performance
Our overall engagement
score rose by two percentage
points in FY22 despite
significant changes in the
organisation and challenges
in our external environment.
We have continued to invest
in key areas that help to drive
engagement – further
enhancing communication
and training and development
across the business and
strengthening our focus
on inclusion.
Strategic relevance
Managing food waste is a top
priority across our operations.
We address this in multiple
ways including prevention,
redistribution, and use in
animal feed. This forms the
basis of our commitment to
halve our food waste (from a
FY17 baseline) by 2030, in line
with the UN SDG target.
FY22 performance
Our food waste was 8.5%
of total food handled. This is
an increase from last year’s
performance at 8.1%,
primarily due to the Scope
simplification of ranges
during the period of
COVID-19, which helped
to drive food waste as a %
of food handled down.
Strategic relevance
We aim to motivate and
support our people to take
on more responsibility
and ownership, we also
recognise and reward talent.
The Internal Progression Rate
is a useful measure to assess
this development and is
calculated as the total
number of roles vacant
in the year that were filled
by internal candidates.
FY22 performance
We are pleased to see
further growth in this metric.
Our Grow with Greencore
approach helps our people to
enrich their careers, providing
opportunities for growth and
progression, and to achieve
their potential.
Strategic relevance
Reducing GHG emissions
through intelligent energy
use will help us transition
towards a Net Zero future.
We have committed to
science based targets to help
guide us to succeed, and we
are continually monitoring
our use of energy to assess
our progress.
FY22 performance
In FY22, our total gross scope
1 and 2 carbon emissions
increased from the previous
year from 90,278 tonnes to
92,655 tonnes, an increase of
2.6%, and from our base year
of 89,606 tonnes an increase
of 3.4%. In contrast, as our
overall production levels
increased our manufacturing
energy intensity ratio (kWhp/
tonne) decreased from 1,315
kWhp/tonne to 1,254 kWhp/
tonne, an improvement of
4.6% in our efficiency.
% Internal Progression Rate
44%
(FY21: 40%)
Primary energy consumption
per tonne
1,254
(FY21: 1,315) kWp per tonne
Employee
engagement
Food waste
Learning and
development
Energy efficiency
People at the Core Sustainability
Our Key Performance Indicators continued
37Strategic Report | Directors’ Report | Financial Statements
Link to remuneration
The remuneration of Executive Directors
is aligned closely with financial and
non-financial KPIs through the
Company’s Performance Share Plan
(‘PSP’) and Annual Bonus Plan (‘ABP’). PSP
awards granted in FY22 (and those
intended to be granted in FY23) are based
on a scorecard of three equally-weighted
measures comprising ROIC and Adjusted
EPS, alongside Total Shareholder Return
(‘TSR’). The financial element of the ABP
continues to be linked to Adjusted
Operating Profit (weighted 50%) and Free
Cash Flow (weighted 25%), with the
remaining 25% linked to personal and
strategic objectives selected each year to
reflect our non-financial KPIs and other
short term business priorities.
See Report on Directors’ Remuneration on page 83
Strategic relevance
Producing safe, authentic
and excellent quality food is
central to everything we do.
The Group utilises the Brand
Reputation Compliance
Global Standards in food
safety (the ‘BRCGS’) to
measure food safety levels,
a standard that is recognised
by the Global Food Safety
Initiative. Testing is carried
out through audits on food
safety, quality and operational
criteria at each of our sites.
All unannounced audits were
paused during the pandemic.
These are now being
reinstated so the current
audit results are a mixture
of announced and
unannounced audits.
FY22 performance
For the fifth consecutive year,
we met the highest level of
food safety performance, with
all 23 of our manufacturing
units audited achieving AA or
A grades, the highest levels
attainable for announced
audits under BRCGS.
Strategic relevance
Central to our commercial
success is a relentless
focus on our customer
relationships. Each year, the
Advantage Group surveys
retailers about their chilled
convenience supplier base,
both branded and own-label,
across a range of important
performance areas.
FY22 performance
Despite a challenging
backdrop, we regained the
number-one position in the
overall Advantage Group
survey. We ranked as clear
number-one supplier within
the food to go and prepared
meals categories and scored
strong positions across our
other product areas.
Strategic relevance
Building customer
relationships underpins the
Group’s strategic priority to
deepen customer relevance.
An important component of
measuring this is our service
level. We track our service
level by measuring the
products we deliver to
customers, on time and in
full, compared to what they
ordered from us.
FY22 performance
Operational service levels in
the year fell back slightly from
98.1% to 97.4%, impacted by
the well-documented supply
chain and labour challenges
that have impacted the
broader UK food industry
in FY22.
Strategic relevance
We are committed to
enhancing the health,
safety and wellbeing of our
employees. We recognise this
is critical to the success of
our business, and we work
hard to understand risks to
our employees in order to
build strategic, targeted and
evidence-based interventions.
We continually review and
measure the performance of our
compliance and culture through
monitoring performance
measures and auditing that
informs Greencore leadership
on improvement programmes
for health and safety.
FY22 performance
Our RAFR has shown a slight
improvement from 0.37 to
0.33 as a result of a continued
focus on health and safety.
We also measure safety
performance through proactive
activities such as behavioural
safety observations and
engagement walks. In FY22,
we carried out almost 18,000
behavioural safety observations
and over 1,500 leadership
engagement walks.
% products delivered on
time and in full
97.4%
(FY21: 98.1%)
Reportable Accident
Frequency Rate (‘RAFR’)
0.33
(per 100,000 hours)
(FY21: 0.37)
% BRCGS audits at
AA/A grades
100%
(FY21: 100%)
Advantage Survey
#1
(FY21:#3)
Food safety
Service
Health
and safety
Commercial
Excellence Great Food
38 Greencore Group plc Annual Report and Financial Statements 2022
Operating and financial review
Strategic developments
We made strong progress against our
strategic objectives in FY22, delivering good
year on year volume growth while recovering
significant levels of ongoing inflation and
enhancing profit conversion. This progress
was underpinned by close customer
engagement in what has been, and
continues to be, a very challenging trading
environment for the food industry. Overall
demand in the Group’s categories has been
very resilient, with demand supported by
robust service levels across the network,
despite having to navigate ongoing and
challenging inbound supply chain disruption.
Onboarding of previously announced new
business wins continued during the quarter,
expanding the Group’s product ranges
and channel reach. New business wins
accounted for approximately 4.4% of the
Group’s Pro Forma Revenue Growth in FY22.
The Group also continued to work closely
with customers on product and range
innovations to mitigate the impact of
inflation at consumer level.
Our strategic capital investment programme
of approximately £30m across three existing
manufacturing sites, to support the delivery
of previously announced business wins,
was completed in Q4. There are some
commissioning challenges as we ramp
up production in our new ready meals
production unit. We are focused on
managing this disruption and driving
operating efficiency and improved output
and conversion rates.
Better Greencore, our change programme,
continues to progress well. The first phase of
the programme is expected to deliver an
annual recurring benefit of approximately
£30m in FY24. To unlock these improvements
the Group will invest a total of approximately
£24m comprising operating and capital
costs during FY22 and FY23 of which £16.1m
has been incurred in 2022. The internal
operational and organisation model has
changed fundamentally in this first phase,
realigning teams from a matrixed structure to
a functional model. While this is a complex
task, it will deliver a more customer-centric
approach across the business. The new
structure is supported by the full deployment
of an integrated business management
model that will make the Group more
effective across product development,
operations and overall cost management.
The second phase of Better Greencore is
focused on operational and technological
excellence. This phase will be launched
internally in FY23.
Trading performance
Reported Group revenue increased by 31.3%
to £1,739.6m in FY22. Revenue Growth
in FY22 was driven by a combination of
increased volumes, double digit percentage
increase in underlying pricing and increased
revenue in the Group’s Irish ingredients
trading business as well as the impact of
a 53rd trading week in FY22.
Adjusted Operating Profit rose from £39.0m
to £72.2m and Adjusted Operating Margin
advanced by 130bps to 4.2%. Group Profit
Before Tax was £39.8m in FY22, compared
to a Profit Before Tax of £27.8m in FY21.
The UK trading environment, especially in
food to go categories, was resilient during
FY22 notwithstanding some demand
volatility caused by COVID-19 related
mobility restrictions in H1 22 and the
increasing impact of inflation on the UK
consumer during H2 22. The Group will
continue to monitor the impact of increased
prices at a consumer level closely.
In FY22 the Group benefitted from its strong
market position in the grocery retail channel,
its expanded customer and format mix, and
its portfolio across food to go and other
convenience categories. The new business
wins onboarded in FY21 and FY22 also
contributed meaningfully to Group revenue
performance. In H1 22, the Group worked
closely with one of its key food to go
customers to extend its offering into the
store network of a leading UK coffee shop
retailer. The Group also completed the
onboarding of a significant business win
in ready meals in H2 22, supported by
a strategic capital investment.
FY22 revenue in the Group’s food to go
categories (comprising sandwiches, salads,
sushi and chilled snacking) totalled £1,161.3m
and accounted for approximately 67%
of reported revenue. Reported revenue
increased by 37.9% in these categories,
driven by a recovery in underlying demand
as the year progressed, strong execution on
new business wins, and increased pricing.
Revenue for the distribution of third-party
products accounted for approximately 10%
of Group revenue in FY22 (FY21: c.8%).
On a pro forma basis, revenue in food to go
categories grew by 35.2% in FY22 driven by
increased volumes due to the impact of new
business wins in 2021 and 2022 as well as
ongoing recovery in underlying volume
towards pre COVID-19 levels, and double
digit inflation recovery.
The Group’s other convenience categories
comprise activities in the chilled ready meals,
chilled soups and sauces, chilled quiche,
ambient sauces and pickles, and frozen
Yorkshire Pudding categories, as well as an
Irish ingredients trading business. Reported
revenue across these categories increased
by 19.8% to £578.3m in FY22.
On a pro forma basis, revenue increased by
19.2%, driven by increased underlying pricing,
and higher revenue in the Group’s Irish
ingredients trading business. Volumes were
modestly up year on year due to the Group’s
onboarding of new business wins in the ready
meals category.
There was a substantial increase in inflation in
the Group’s main cost components in FY22,
which led to a double digit rate of inflation for
the period. This inflation was fully recovered
through pricing and other mechanisms
comprising product and range innovations,
alternative sourcing and operating efficiency
initiatives. The largest component of inflation
was raw materials and packaging, where we
have explicit price recovery mechanisms in
review
Operating
FY22
£m
FY21
£m
Change
(As reported)
Change
(Pro Forma
basis)
Revenue 1,739.6 1,324.8 31.3% 29.4%
Group Operating Profit 52.1 42.8 21.7%
Adjusted Operating Profit 72.2 39.0 £33.2m
Adjusted Operating Margin % 4.2% 2.9% 130bps
39Strategic Report | Directors’ Report | Financial Statements
place with a number of our customers.
The other elements were recovered through
a combination of constructive direct
dialogue with our customers and operational
efficiencies. We also work collaboratively
with our customers on multiple other
initiatives to manage inflation, including
range alterations, packaging redesigns
and product reformulations.
In FY22, the Group experienced an IT
security incident that resulted in temporary
unauthorised access to part of the Group’s IT
systems. The Group responded rapidly and
proactively to the incident to protect the
Group’s infrastructure and data and to
restore the impacted part of the IT systems.
From an operational perspective, the impact
on customers was minimised as the Group
put in place manual back up processes
to ensure that production could continue.
The Group recognised net costs of £1.9m
incurred as a result of the incident. This
included insurance recovery of £8.6m
against the business impact and costs
relating to the incident. Appropriate
notification was also made to the relevant
authorities. In FY21 the Group incurred
£5.3m of operating costs relating to
COVID-19.
Overall, Group Operating Profit in FY22
increased to £52.1m (FY21: £42.8m). Adjusted
Operating Profit increased to £72.2m (FY21:
£39.0m). The increase in Adjusted Operating
Profit was driven by a return to profitability in
the Group’s food to go categories as profit
conversion improved on an increased revenue
base. Underlying profitability in the Group’s
other convenience categories was below,
FY21 levels as we incurred pre operating and
commissioning costs for the new ready meals
production unit.
Group Cash Flow and Returns
In FY22, we continued to manage cashflows
and leverage closely, balancing recovering
profitability, seasonal working capital outflows
and capital investment requirements to
support future growth in the business.
Free Cash Flow was an inflow of £58.7m in
FY22, a reduction of £13.5m on FY21 which
was £72.2m. The decrease primarily reflects
more normalised working capital inflow
in 2022 post COVID 19. Free Cash Flow
Conversion was 46.3% compared with 78.2%
in FY21.
Net Debt at 30 September 2022 was
£228.0m, a decrease of £14.7m compared to
24 September 2021. Net Debt excluding lease
liabilities decreased to £180.0m from £183.1m
in FY21. Net Debt: EBITDA leverage, as
measured under financing agreements, was
1.5x at period end which represents further
progress on deleveraging and has now
reached our target range of 1.0x – 1.5x, which
was rebased from 1.5x to 2.0x post COVID-19.
In November 2021, the Group further
strengthened its balance sheet when it
extended the maturity on its £340.0m
revolving credit facility by one year to January
2026. As at 30 September 2022, the Group
had total committed debt facilities of
£578.0m and a weighted average maturity of
2.5 years. At 30 September 2022, the Group
had cash and undrawn committed bank
facilities of £398.0m.
Cash interest costs in FY22 were £16.7m
down from £18.8m in FY21. As rates are
increasing, we anticipate cash interest to
increase to approximately £18m in FY23.
In May 2022, we announced a £50m value
return to shareholders over the coming
two years and subsequent to the year-end,
announced that the first phase, a £10m share
buyback programme that commenced on
26 July 2022, had been completed. We plan
to buyback a further £15m of shares in FY23.
ROIC increased to 8.4% in FY22, compared to
4.5% in FY21. The year on year increase was
driven primarily by increased profitability in
the year. Average invested capital decreased
modestly year on year from £728.8m to
£695.0m.
Better Future Plan
Greencore’s sustainability strategy, the
‘Better Future Plan’, was launched in
November 2021 and is built around three
pillars and aspirations:
• Sourcing with Integrity: By 2030 we
will source our priority ingredients from
a sustainable and fair supply chain
• Making with Care: By 2040 we will
operate (Scope 1 and 2) with net zero
emissions
• Feeding with Pride: By 2030 we will have
increased our positive impact on society
through our products
The Group advanced the Better Future Plan
during FY22, with a focus on progressing the
data and systems framework to measure
performance effectively. The Group is
building a substantial body of data on the
nutritional profile of its portfolio and is
currently trialling product foot-printing
technology with one of its customers. While
this progress has not yet followed through to
absolute reductions in the Group’s scope 1
and scope 2 carbon footprint as increased
production post COVID-19 has impacted the
Group’s energy usage, the Group continues
to look at ways to accelerate delivery through
focusing on collaboration with customers to
drive the systems level change required.
The Group’s total carbon footprint is made up
of emissions from direct operations (Scope 1
and 2), which represents 6% of the Group’s
total, while the Group’s indirect emissions
(Scope 3) from the ingredients sourced and
the products placed on the market by the
Group represent the majority (94%) of the
Group’s total footprint. The most major
reductions will therefore come from
collaborating with the Group’s customers
and suppliers to reduce Scope 3, but we
recognise the importance of Scope 1 and 2
and are continuing to look to accelerate plans
on energy reduction.
The Group has published its TCFD report
conducting scenario analysis as part of the
FY22 Annual Report to estimate the potential
impact of climate risks and opportunities.
Food donation continues to be a central focus
for the Group’s community engagement
efforts with the equivalent of 1.63m meals
redistributed to food redistribution
organisations in order to ensure our surplus
food reaches those who need it.
The Group’s standalone sustainability report
for FY22 on our Better Future Plan will be
released in January 2023.
FY22
£m
FY21
£m
Change (as
reported)
Free Cash Flow 58.7 72.2 (£13.5m)
Net Debt 228.0 242.7 £14.7m
Net Debt (excluding lease liabilities) 180.0 183.1 £3.1m
40 Greencore Group plc Annual Report and Financial Statements 2022
Operating and financial review continued
Revenue and Operating Profit
Reported revenue in the period was
£1,739.6m, an increase of 31.3% compared
to FY21, primarily reflecting the recovery in
demand in food to go categories and the
impact of new business wins. Pro Forma
Revenue increased by 29.4%.
Group Operating Profit increased from
£42.8m to £52.1m as a result of an improved
revenue delivery in FY22 and notwithstanding
the movement from a net exceptional gain
to a net exceptional charge in FY22. Adjusted
Operating Profit of £72.2m compared to
£39.0m in FY21, driven by an improvement
in profit in food to go categories partly offset
by a lower underlying performance in the
Group’s other convenience categories as we
commissioned the new ready meals facility.
Adjusted Operating Margin was 4.2%,
130 basis points higher than FY21.
Net finance costs
The Group’s net bank interest payable was
£11.1m in FY22, a decrease of £3.9m versus
FY21. The decrease was driven by lower
cost of debt during FY22. The Group also
recognised a £1.2m interest charge relating
to the interest payable on lease liabilities in
the period (FY21: £1.3m).
The Group’s non-cash finance charge in
FY22 was a net £nil (FY21: £2.7m charge).
The change in the fair value of derivatives
and related debt adjustments including
foreign exchange in the period was a
£1.1m credit (FY21: £0.9m charge) and the
non-cash pension financing charge of £1.1m
was £0.6m lower than the FY21 charge
of £1.7m.
Profit before taxation
The Group’s Profit before taxation increased
from £27.8m in FY21 to £39.8m in FY22,
driven by higher Group Operating Profit and
lower finance costs. Adjusted Profit Before
Tax in the period was £59.8m compared
to £22.6m in FY21, primarily driven by an
improvement in Adjusted Operating Profit.
Taxation
The Group’s effective tax rate in FY22
(adjusting pre-exceptional profit for the
change in fair value of derivatives) was
19% (FY21: 15%). In March 2021, the UK
Government announced an increase in the
UK rate of corporation tax from 19% to 25%,
to be effective from 1 April 2023. This has
been reconfirmed by Jeremy Hunt, the
newly appointed Chancellor of the
Exchequer, in October 2022.
Exceptional items
The Group had a pre-tax exceptional charge
of £16.5m in FY22, and an after-tax charge of
£13.0m, comprised as follows:
Exceptional Items £m
Reorganisation costs (16.1)
Pension restructuring (0.4)
Exceptional items (before tax) (16.5)
Tax on exceptional items 3.0
Exceptional items (after tax) (13.5)
In H1 22 we commenced a Better Greencore
programme to support the revitalisation of
its Excellence cost efficiency programmes
and to unlock further cost efficiencies by
reducing organisational complexity. The
Group recognised a charge of £16.1m in
respect of work carried out in the period.
Earnings per share
The Group’s basic earnings per share for
FY22 was 6.2 pence compared to 5.0 pence
in FY21. This was driven by a £6.9m increase
in profit attributable to equity holders,
partially offset by an increase in the weighted
average number of shares in issue in FY22
to 523.4m (FY21: 511.8m).
Adjusted Earnings were £48.1m in the period,
£29.3m ahead of prior year levels largely due
to an increase in Adjusted Operating Profit.
Adjusted earnings per share of 9.2 pence
compared to adjusted earnings per share
of 3.7 pence in FY21.
Cash Flow and Net Debt
Adjusted EBITDA was £34.6m higher in
FY22 at £126.9m. The Group incurred a net
working capital inflow of £2.0m. Maintenance
capital expenditure of £16.9m was incurred
in the period (FY21: £16.2m). The cash
outflow in respect of exceptional charges
was £13.6m (FY21: £3.3m).
Interest paid in the period was £16.7m (FY21:
£18.8m), including interest of £1.2m on lease
liabilities, a decrease on FY21 reflecting lower
average borrowings and interest costs as the
group exited the covenant waiver period and
reduced leverage. The Group recognised a
cash tax credit of £2.2m reflecting a refund
received in the period. The cash tax rate for
the Group is expected to rise towards the
Group’s effective rate in the medium term
as a result of increased profitability and a
reduction in the degree to which UK losses
may be utilised in any one year. Cash
repayments on lease liabilities increased
to £17.3m (FY21: £14.3m). The Group’s cash
funding for defined benefit pension schemes
was £11.5m (FY21: £7.0m), reflecting the
restoration of cash contributions after an
agreement with Trustees to defer cash
contributions for a period in FY21.
These movements resulted in a free cash
inflow of £58.7m compared to an inflow
of £72.2m in FY21 when a working capital
benefit was realised as volume returned
to the business post COVID-19.
In FY22, the Group incurred strategic capital
expenditure of £33.1m (FY21: £24.0m).
The Group did not make any equity dividend
cash payments in either period. The Group
made net share purchases of £11.8m in FY22
reflecting the initiation of a £10m share
buyback program (which completed on
6 October 2022) and the implementation of
a new employee share ownership scheme
introduced in the period. This compared to
net equity proceeds of £87.1m in FY21 when
the Group completed an equity placing.
review
Financial
41Strategic Report | Directors’ Report | Financial Statements
In December 2020 (FY21), the Group also
completed the sale of its interests in its
molasses trading businesses for a final cash
consideration of £16.3m.
The Group’s Net Debt excluding lease
liabilities at 30 September 2022 was
£180.0m, a decrease of £3.1m compared
to the end of FY21.
Financing
In November 2021 the Group further
strengthened its balance sheet when it
extended the maturity on its £340.0m
revolving credit facility by one year to
January 2026. As at 30 September 2022, the
Group had total committed debt facilities of
£578.0m and a weighted average maturity
of 2.5 years. These facilities comprised:
• A £340.0m revolving credit bank facility
with a maturity date of January 2026
• A £75.0m revolving credit bank facility
with a maturity date of March 2023
• A £50.0m bilateral bank facility with
a maturity date of January 2024
• A £45.0m bank term loan facility with
a maturity date of June 2024
• £18.0m and $55.9m of outstanding
Private Placement Notes with maturities
ranging between June 2023 and
June 2026
At 30 September 2022 the Group had cash
and undrawn committed bank facilities
of £398.0m.
Pensions
All of the Group’s legacy defined benefit
pension schemes are closed to future
accrual. The net pension deficit relating to
legacy defined pension schemes, before
related deferred tax, at 30 September 2022
was £20.3m, £25.7m lower than the position
at 24 September 2021. The net pension
deficit after related deferred tax was £10.4m
(FY21: £29.3m), comprising a net deficit on
UK schemes of £44.5m (FY21: £65.3m) and
a net surplus on Irish schemes of £34.1m
(FY21: £36.0m).
The decrease in the Group’s net pension
deficit was driven principally by an actuarial
gain on UK scheme liabilities arising from an
increase in the discount rates used to value
these liabilities. The movement in the
discount rate is driven by the corporate bond
rate. The UK scheme is 77% hedged for
movements in gilt yields. Whilst there has
been significant economic volatility
particularly in bond markets recently the
liquidity position of the scheme has been
more than sufficient to management
collateral calls and to maintain the hedged
position of the scheme.
The Irish scheme is fully hedged for
movements in gilt yields and subsequent
to the year end the Trustees of the scheme
entered into an annuity buy-in transaction in
respect of pensioner liabilities, representing
approximately 80% of the liabilities in
the scheme.
Separate to this IAS 19 Employee Benefits
valuation, the valuations and funding
obligations of the Group’s legacy defined
benefit pension schemes are assessed on
a triennial basis with the relevant Trustees.
During H2 21 the Group concluded the latest
assessment of the valuation and funding plan
for its principal UK legacy defined benefit
pension scheme. The Group expects the
annual cash funding requirement for all
schemes to be modestly below £15m.
Return of value to shareholders
In May 2022, we announced that we would
return £50m of value to shareholders over
the next two years. The first phase of this
value return was a £10m share buyback
program which commenced in July 2022
and completed in early October 2022.
We plan to return a further £15m of value
to shareholders in 2023 in the form of
a share buyback.
Emma Hynes
Chief Financial Officer
28 November 2022
42 Greencore Group plc Annual Report and Financial Statements 2022
Risks and risk management
risk
How we manage
The Group’s operating, financial and governance
activities are supported by effective risk management
processes. The Group understands the criticality of
identifying, assessing and prioritising risks in order to
help manage and mitigate the probability and impact
of these risks materialising.
Our approach to risk management
The Board is responsible for effective risk
management which is fundamental to the
ability of the Group to deliver on its strategic
objectives. The Board understands the need
for a robust system of internal control and a
risk management framework in accordance
with the 2018 UK Corporate Governance
Code (the ‘Code’). There is a clear link
between effective risk management, and
the Company’s ability to continue as a viable
entity. This is set out in further detail on
page 44.
The Board has established a culture of
effective risk management across the Group
by identifying and monitoring principal and
emerging risks, setting risk appetite and
determining the risk tolerance of the Group.
The Board is responsible for establishing and
maintaining the risk management framework
and ensuring that the Group has appropriate
processes and controls in place to manage
risk within the Group, which includes
compliance with relevant laws and
regulations.
The Audit and Risk Committee, under
delegation from the Board, reviews the
Group’s risk management framework on a
regular basis. The Audit and Risk Committee
is responsible for assessing the design,
operation and monitoring by management
of the Group’s internal control systems. It is
also responsible for overseeing the
effectiveness of the Group’s internal control
environment. The activities of the Audit and
Risk Committee for FY22 can be found in the
Report of the Audit and Risk Committee set
out on pages 76 to 82.
The Group has a well-established internal
audit and risk management function, (the
‘IAR’). The IAR department is responsible for
providing objective and independent
assurance that the Group’s risk management,
governance and internal control processes
remain appropriate and operate effectively.
Risk management focus in FY22
The Group’s risk management framework
sets out how risks are identified and
managed to support the Group in achieving
its strategic ambitions by providing a clear,
concise and comprehensive approach to
governance, implementation and
embedding of risk management practices.
The risk management framework is reviewed
and approved annually by the Audit and Risk
Committee. As part of this review during
FY22, the Audit and Risk Committee
continued to receive reports from the Risk
Oversight Committee (the ‘ROC’), which
performs additional monitoring and
reviewing of risks across the Group.
The ROC monitors and evaluates the risk
environment and reviews and challenges the
controls in place to manage key risks, as well
as reviewing and considering emerging risks
which may impact the Group in the future.
The core membership of the ROC, which is
chaired by the Chief Financial Officer, who
also acts as the Group Executive Team
sponsor for risk management, is made up of
senior risk assurance and business leaders
including the Group Company Secretary, the
Chief Commercial Officer, the Director of
Internal Audit and Risk, the Director of
Health, Safety and Environment, the
Technical Director, and the Group IT
Director. The ROC provides regular updates
to the Audit and Risk Committee as part of
the risk management framework.
This year, the Group has identified the need
to enhance the risk management process
and framework in order to increase the
maturity of the process as well as to enhance
risk culture. Therefore a project led by the
Director of Internal Audit and Risk has
commenced to refresh the overall risk
management approach during FY23.
Identifying and monitoring
principal and emerging risks:
Principal and emerging risks are identified
through a well-established Group-wide risk
assessment process. This encompasses the
identification, management, ownership and
monitoring of risks in each significant area
of the Group’s operation. This approach
involves the review of individual risk registers
for each function, assessing each appropriate
risk in terms of the likelihood of its
occurrence, the potential impact on the
Group and a quantification of the mitigating
controls in place or needed to help manage
that risk. This process ensures risk
management controls are appropriately
owned and embedded within the various
operational and functional activities of
the Group.
A full top-down review is then undertaken
by the Group Executive Team as well as the
ROC. The Group Executive Team and the
ROC evaluate the principal risks identified
through the bottom-up approach as well as
emerging risks with reference to the Group’s
strategy and the operating environment.
The Audit and Risk Committee monitors
the overall process and reviews the output
including the consolidated Group risk
register, principal risks and associated
controls, as well as any emerging risks.
In addition, the Audit and Risk Committee
receives updates on the risk assurance
process with specific deep dives on certain
key risk areas.
The FY22 overall risk assessment process
identified a number of risks that have
increased since the prior year and as a result
have an impact on the overall risk profile of
the Group. These include risks associated
with changes in consumer demand, the
growing impact of environmental and climate
changes. The impact of the war in Ukraine
and the increased cost of living are
heightening the risks associated with the
supply and availability of raw materials
as well as the volatility of our cost base.
43Strategic Report | Directors’ Report | Financial Statements
Risk management framework
Board of Directors
The Board has overall responsibility to ensure appropriate risk management and internal control systems are designed to identify,
manage and mitigate risks which may impact the achievement of the Group’s objectives. The Board also ensure an appropriate
risk appetite has been set and consider how the Group’s longer term viability may be impacted by the crystallisation of one or
more of these risks.
Audit and Risk Committee
The Audit and Risk Committee has responsibility delegated by
the Board to provide structured and systematic oversight of
the Group’s risk management and internal control systems.
The committee review and monitor the effectiveness of
the Group’s risk management and internal control systems
throughout the year. The Chair reports to the Board on its
activities regarding audit and risk management matters.
Functions/departments
Functions/Departments manage and monitor their own key risks through regular review, ensuring their risk registers and
risk mitigations are accurate.
First line of defence
Operational Management are
responsible for risk identification,
managing the internal control
environment and monitoring
changes in the Group’s risk profile.
Second line of defence
Group functional teams ensure first
line is operating as designed,
manage performance reviews,
internal control verifications, and
facilitate risk assessments. This
includes Food, Health and Safety,
Information Security, Legal and
Financial compliance functions.
Third line of defence
The Group Internal Audit function
gives independent assurance over
the operation of the internal control
framework, risk management
systems and governance processes.
Risk Oversight Committee (‘ROC’)
The ROC supports the Audit and Risk Committee in the risk
management process through additional monitoring and
evaluation of the risk environment and the controls in place
to manage those risks. In addition it gives consideration to
emerging risks which may impact the Group in the future.
The ROC is comprised of senior leadership, and is chaired
by the CFO, and provides updates to the Audit and Risk
Committee on its activities, as well as challenge and
counsel to management.
44 Greencore Group plc Annual Report and Financial Statements 2022
CommercialStrategic
People
Operational
8
3
4
12
11
6
7
9
2
1
5
10
Risks and risk management continued
The risks for the Group and their year-on-year movement
are depicted in the heat map below.
Risk heat map:
impact of the persistently high inflation
across the industry on consumer prices.
The Group has substantially recovered
the inflation experienced over the last
12months, and is making decisions whether
to bid for or renew contracts based on
their economics, including the ability to
recover inflation.
IT security incident
In December 2021, the Group experienced
an IT security incident that resulted in
temporary unauthorised access to part of our
IT systems. The Group’s immediate priority
was to respond quickly to the incident to
protect the Group’s infrastructure and data
and to minimise the impact on operations
and customers. Our IT security team worked
in conjunction with external security experts
to assist with our response and investigation
work. We prioritised containment of the IT
security incident, which included a zero risk
approach to take the impacted part of our
network offline, and to rebuild those systems
from trusted uncompromised sources.
Appropriate notification was also made to
relevant authorities.
The impact of these events has been
reflected in the Group’s principal risks
(as set out on pages 46 to 49)
Going concern and the viability
statement:
In accordance with the relevant provisions
set out in the Code, the Board has taken
account of the principal risks and
uncertainties, as set out in the table on pages
46 to 49 in considering the statements to be
made in regard to the going concern basis
of accounting and the viability statement.
These statements are set out below.
Going Concern
The Directors, after making enquiries, have a
reasonable expectation that the Group has
adequate resources to continue operating as
a going concern for the foreseeable future.
In the current period, the UK trading
environment, especially in food to go
categories, was resilient notwithstanding
some demand volatility caused by COVID-19
related mobility restrictions in H1 22 and the
increasing impact of inflation on the UK
consumer during H2 22. Despite the
inflationary challenges impacting the
broader UK food industry at present, there
has been limited demand impact to date in
the Group’s categories. The Group also
continues to monitor the potential impact of
a recessionary environment and cost of living
factors on consumer spending through the
year end.
Emerging risks:
As part of our overall risk assessment process
and in line with the Code, the Group
captures and monitors areas of uncertainty
which, while not having a significant impact
on the business currently, have the potential
to adversely impact the Group in the future;
these are considered to be emerging risks.
Following the FY22 risk assessment no new
emerging risks were identified
The monitoring of existing and identification
of new emerging risks are an ongoing focus
for the Group.
Key events that have impacted the
Group’s principal risk profile:
Cost of living and inflation
We are currently in a period of high inflation,
which is putting pressure on the Group as well
as the industry in general relating to food
prices and volatility of costs. Alongside energy
price increases, there is a lot of media focus
on the cost-of-living crisis, which is impacting
consumer spending habits.
The Group remains focused on the recovery
of inflation through all mechanisms available
and are working with our customers and
supply partners to mitigate the ongoing
No. Risk group Risk Movement
1
Strategic Reduction in demand for products
2
Strategic Environment & climate change
3
Commercial Price and volatility of our cost base
4
Commercial Availability of raw materials
5
Commercial Reliance on key customers
6
Operational Availability of IT systems
7
Operational Inefficiency of legacy IT systems
8
Operational Breach of regulatory requirements
9
Operational Contamination of our products
10
People Inability to attract and retain talent
11
People Impact of COVID 19 and future pandemics
12
People Health & Safety failures
Low Medium High Changed risk profile
Key
45Strategic Report | Directors’ Report | Financial Statements
Accordingly, the Directors have considered a
number of scenarios for the next 18 months
from the year end date. These scenarios
consider the potential impact of a
recessionary environment including the
impact of inflation and interest rates on
consumer spending, along with
consideration of under recovery of inflation,
supply chain disruption issues and further
one-off future events linked to a reduction in
consumer footfall during the winter months.
The Group is satisfied that there is sufficient
headroom in the financial covenants under
current facilities under each scenario.
The Group’s scenarios assume:
• A base case projection using internally
approved forecast and strategic plans,
which reflect the external economic
environment. These plans incorporate
the potential impact of climate change on
the Group’s capital investment process;
• A downside scenario which assesses the
potential impact of a recessionary
environment including the impact of
inflation and interest rates on consumer
spending, along with consideration of
under recovery of inflation and further
one-off future events linked to a
reduction in consumer footfall during the
winter months; and
• A severe downside scenario which
assesses the further impact of inflation
under recovery, along with a further
reduction in sales to reflect the impact of
changes in consumer spending through
any recessionary period.
While the Group is in a net current liability
position of £128.7m (2021: £135.9m) at the
30 September 2022, the Group retained
financial strength and flexibility as at the end
of FY22. The Group had cash and undrawn
committed bank facilities of £398.0m at
30 September 2022 (September 2021:
£433.6m).
Based on these scenarios and the resources
available to the Group, the Directors believe
the Group has sufficient liquidity to manage
through a range of different cashflow
scenarios for the next 18 months from the
year end date. Accordingly, the Directors
adopt the going concern basis in preparing
these Group Financial Statements.
Viability statement disclosure
In line with the Code Provision 31, the
Directors have carried out a rigorous review
of the prospects of the current business and
its ability to meet its liabilities as they fall due
over the medium term. In undertaking this
review, the Directors concluded that a
three-year timeframe continues to be an
appropriate period for this assessment given
that this is the key period of focus within the
Group’s strategic planning process and is
a typical period for visibility of commercial
arrangements with the Group’s customers.
The objectives of the annual strategic
planning process are to consider the key
strategic choices facing the Group and to
build a consolidated financial model with
various scenarios taking into account the
principal risks facing the Group which may
threaten the Group’s solvency, liquidity,
cash flow and business model.
Assumptions are built for the income
statement with a flow through to the balance
sheet and cash flow. These are rigorously
tested by management and by the Directors.
Sensitivity analysis is applied to reflect the
potential impact of some of the principal
strategic and commercial risks of the Group
as described on pages 46 to 47. These risks
could affect the level of sales, profitability
and cash generation of the Group and the
amount of capital required to deliver them.
Amodel of financing requirements is also
built for the same time period taking into
account the base plan and sensitivities
against this, together with the likelihood of
being able to refinance maturing committed
facilities. Based on the results of this analysis,
the Directors have a reasonable expectation
that the Group will be able to continue
in operation and meet its liabilities as
they fall due over the three year period
of their assessment.
Risk appetite:
Risk appetite promotes consistent, ‘risk-
informed’ decision-making aligned with
strategic aims, and it also supports robust
corporate governance by setting clear
risk-taking boundaries. The risk appetite
statement provides guidance on the nature
and extent of risk the Group is prepared to
take. For example:
• As a consumer foods business, the Board
has a low risk-appetite for operational
risks which may impact the Group’s
reputation or brand in areas such as, the
health and safety of our key stakeholders
including employees, food product-
quality, cyber security and sustainability;
• There is also a low risk appetite for
exposure to financial and compliance
risks. The Board seeks to achieve financial
stability and certainty particularly during
a time of volatility in interest rates and the
cost of living, as well as comply with all
industry-specific and wider regulatory
requirements;
• Whilst the Board seeks to minimise
commercial risk, for example by ensuring
relevance and differentiation of our
products; it accepts that a moderate
risk appetite is acceptable as the Group
operates in a highly competitive,
fast-moving and consumer led industry
that is impacted by external events,
particularly economic and political
challenges;
• The Board recognises that, in pursuit of
strategic growth objectives, there is often
a trade-off between risk and reward in
making investment decisions, such as
acquisitions, capital investments or new
category expansions. In these instances,
ahigher level of risk may be accepted in
order to maximise the return for its
shareholders. This also applies to business
change and transformation, where the
Board accepts a higher risk in ensuring
the Group continues to transform and
restructure to improve efficiency and
effectiveness, as demonstrated by the
Better Greencore programme.
For each of the principal risks, the Group’s
risk appetite has been considered when
determining the nature and extent of the key
control mechanisms in place and the level of
assurance required. The Board and the Audit
and Risk Committee receive regular reports
from key functions such as sustainability,
health and safety, compliance, finance, legal,
IT, internal audit and HR. Where the level of
assurance obtained is not considered to
adequately reflect the stated risk appetite,
then increased assurance activity is
introduced.
Through the risk management framework,
all material strategy and investment decisions
are approved by the Board. These are
supported by detailed diligence information,
documentation, and analysis, along with
input from management and subject matter
experts (‘SMEs’) to ensure that the risks
associated with each decision, and the
related execution plan, are fully understood
and accepted.
46 Greencore Group plc Annual Report and Financial Statements 2022
Risks and risk management continued
Principal risks
Risk area Description Control Movement
Strategic
1. Reduction
in demand for
our products
The Group operates in highly competitive
markets with significant product
innovation, technical advances and/or
the intensification of price competition by
competitors, both direct manufacturing
competitors or competitors of our
customers. The recent inflationary and
cost-of-living challenges impacting
discretionary income pose the risk that
consumers shift towards less convenient
and lower cost alternatives offered by
our competitors.
In addition, as consumer priorities change,
(e.g. placing more importance on health,
ethical issues and sustainability) and
lifestyle (e.g. the shift towards working
from home), failure to keep pace could
result in reduced demand which would
adversely affect the Group’s results.
To mitigate this challenge the Group invests
in research and development and continuous
improvement to ensure that the introduction
of both new products and improved production
processes place the Group at the forefront of
consumer needs in its chosen markets.
The Group also continuously works to streamline
its cost base to ensure it remains competitive.
due to the cost of
living crisis
2. Impact of
environmental
responsibilities
and climate
change
There is a risk that the Group may fail to
uphold its environmental responsibilities
and commitments, or appropriately
manage the impact of climate change.
Failure to appropriately manage the
impact of climate change in our products
and operations, to meet the expectation
of customers and consumers will impact
the reputation of the Group. Failing to
adhere to the increasing sustainability
regulatory requirements may also result in
breaches of laws or regulations and may
have a financial and/or legal impact for
the Group.
The Group has established a strong governance
model which includes a Sustainability Steering
Committee responsible for the delivery of our
sustainability strategy. Reporting to this Committee
are six Sustainable Business Management Groups
(‘SBMGs’) that provide a cross-functional forum to
develop and steer our strategy at an operational level.
The SBMGs cover responsible sourcing and human
rights, ethics, energy and environment, packaging,
communities, and healthy and sustainable diets. These
steering groups are chaired by senior leaders. More
detailed information on our climate transition strategy
is contained within the TCFD section of this report on
pages 29 to 33.
due to the increasing
regulations and
stakeholder
expectations
Commercial
3. Increasing
prices and
volatility of
our cost base
The Group’s cost base and margin can be
affected by fluctuating raw material and
energy prices and changes in cost and
price profile. During the year we have seen
this evidenced as a result of the conflict in
Ukraine, the extreme weather conditions
during the heatwave over the summer
months and the ongoing supply chain
challenges post Brexit. The additional
challenges with labour availability have
also driven inflation in labour costs.
The Group maintains a strong commercial focus
on procurement, process and cost improvement to
manage and mitigate the impact of cost increases and
volatility. In addition, the Group adopts strategies that
diversify risk thereby improving the positioning of its
businesses and the defensibility of its margins. The
Group now has a number of cost transparency models
with its customers which also seek to mitigate the
impact of input cost fluctuations.
due to the cost of
living crisis
Risk trend
Risk increased Risk unchanged Risk decreased
47Strategic Report | Directors’ Report | Financial Statements
Risk area Description Control Movement
4. Availability of
raw materials
The Group’s ability to manufacture its
product is dependent on the ability to
source required raw materials. Although
we operate several strategies to mitigate
this risk, this can be a challenge when
external events (such as extreme weather
and geo-political conflicts) impact the
supply chain. The Group may also be
impacted by the loss of a key supplier.
Aloss of, or interruption of supply from
a key supplier could cause short term
disruption to the operational ability of the
Group and adversely affect its results.
The Group’s procurement function uses various
strategies to minimise this risk, including dual-
sourcing, strategic suppliers, and some vertical
supply chains.
due to the cost of
living crisis
5. Reliance
on our key
customers
The Group benefits from close
commercial relationships with a number
of key customers. The loss of any of these
key customers, either due to tightening
of commercial terms, or reputational
damage that may compromise the
relationship, could result in a material
impact on the Group’s results. The Group
is also at risk of poor performance by
customers in the categories it supplies.
There is a further risk that our key
customers may seek to dilute their own
risk by moving to a multi-supplier base.
The Group invests significant resources to maintain
deep, multi-level relationships which drive value and
minimise risk for both itself and its key customers.
The Group also continues to focus on developing
its business across a broad range of customers across
all formats.
Operational
6. Disruption to
the availability
of IT Systems
In common with most large organisations,
the Group carries a risk related to cyber
events threatening the availability and/or
integrity of our systems and data. An
increase in cyber threat activity continues
to be seen globally and such events can
have a significant impact on the Group,
as experienced by the IT security incident
at Greencore earlier this year.
At the time of our IT security incident this year, the IT
team were working through a roadmap of security
improvement. Following that incident, this roadmap
has been accelerated, improving our controls.
Activities include deploying a 24/7 Security Operations
Centre, with protection and monitoring across all
IT endpoints, and improved user access controls.
In addition, the Group has cyber insurance that
mitigates the risk of financial loss resulting from
a deliberate attack.
7. Inefficiencies
in legacy IT
Systems
The Group relies heavily on information
technology meaning that continuous
investment in systems is required to
support our business. A lack of integration,
flexibility and modernisation within our IT
systems could have an impact on
efficiencies and therefore our cost base.
Our IT department ensures that all applications are
fully supported and this allows our systems and
infrastructure to successfully deliver our operational
requirements. Nevertheless we have identified an
opportunity to update and better align the IT
infrastructure across the Group. This will be addressed
as part of the Better Greencore programme.
48 Greencore Group plc Annual Report and Financial Statements 2022
Risks and risk management continued
Principal risks
Risk area Description Control Movement
8. Breach of
regulatory
(including
industry
specific)
requirements
As a producer of convenience foods
and ingredients, the Group is subject
to rigorous and constantly evolving
regulations and legislation particularly
in the areas of food safety and
environmental protection. Failure to
comply with such regulations may lead
to serious financial and/or reputational
impact. In the post-Brexit environment we
are continuing to manage the increased
range of legislation covering food and
packaging standards, our manufacturing
process and the movement of goods to
and from the EU. In addition, we are also
managing many new regulations covering
the broader sustainability agenda which
requires significant management focus.
The Group maintains strong technical and
sustainability functions, which set high standards for
food safety and environmental controls, striving for
best practice above and beyond the minimum
compliance requirements.
In addition, the Group Company Secretariat and
Legal Department maintain a ‘key legislation register’
covering all corporate (UK and Ireland) and operational
key legislation both current and pending, which is
verified on an annual basis. This includes key legislation
changes as a result of Brexit, and otherwise as
they arise.
The register also records mechanisms as to how we
ensure compliance with key legislation throughout the
Group.
due to the increasing
regulations
requirements
9.
Contamination
of our product
within the
Manufacturing
Process
The Group produces a large volume of
food annually and there are risks of
product contamination through either
accidental or deliberate means. This may
lead to products being withdrawn or
recalled, as well as being a significant draw
on resources and could therefore result
in both a financial and/or reputational
impact on the Group.
The Group maintains industry-leading food safety and
traceability processes and procedures. Each site has
a team dedicated to ensuring compliance with Group
and industry standards in this area and the Group
constantly monitors performance against a detailed
set of metrics and measures. Each manufacturing site
is subject to a significant number of audits by internal
teams, customers and independent bodies auditing
against recognised global food safety standards.
The Group also operates stringent controls across
its supply chain including audits and strict approval
of its suppliers, supported by rigorous ethical and
quality checking of all ingredients.
Risk trend
Risk increased Risk unchanged Risk decreased
49Strategic Report | Directors’ Report | Financial Statements
Risk area Description Control Movement
People
10. Inability
to attract and
retain talent
The ongoing success of the Group is
dependent on attracting and retaining
a high quality workforce that can
successfully deliver our manufacturing
operations, as well as management who
can effectively implement the Group’s
strategy. Due to political, economic and
legislative uncertainty and change, there
is a heightened risk that labour cost and
availability may impact our ability to
attract and retain employees at all levels.
The Group is continually reviewing and improving its
recruitment processes to reflect changing market
conditions, including rigorous compliance checks to
attract the workforce required within our sites. The
Group also has a strong commitment to excellent
working conditions, on-the-job training and specific
programmes to enhance communication and
colleague engagement in order to retain employees.
There is robust succession planning and strong
recruitment processes, offering competitive and
attractive remuneration and benefits packages to
attract and retain management. The Board reviews
succession planning at a senior leadership level
and we conduct an annual survey to monitor
colleague engagement.
Finally, we have internal key performance indicators
around attraction, retention and attrition to monitor
and control progress across all levels.
due to the labour
shortage challenges
and increasing salary
costs to attract and
retain talent
11. Impact
of COVID-19
and future
pandemics
As we revert to more normal ways of
working, after the heightened impact of
the COVID-19 pandemic, we are acutely
aware of how a new COVID-19 variant or
even a completely new pandemic could
again severely impact our competitiveness
and financial results if we are unsuccessful
in adapting our business and operations.
The safety and wellbeing of our colleagues has been,
and continues to be, our overriding priority, and
therefore should there be a future wave of COVID-19
or new pandemic, the Group would be able to rely on
mitigation strategies that were developed as a result
of COVID-19 and remain in place. These include
pandemic-safe practices and processes at our sites
including additional security, hygiene and social
distancing measures. We have also developed practices
for office colleagues working from home, to help them
adapt to new ways of working.
Our Group Executive Team monitors events closely
with regular Board oversight, evaluating the impact
and designing appropriate response strategies.
This includes securing additional supply chain
capacity to meet changes in demand.
12. Health and
safety failures
on our sites
Ensuring the health and safety of our
colleagues is of paramount importance at
Greencore. There is a risk of an accident
or incident occurring on our sites, causing
illness or injury to employees. In addition
to the human impact of such an event,
it can also result in reputational damage
and/or financial liabilities through legal
action by the affected parties.
The Group has strong health and safety processes and
procedures in place supported by an established review
programme across all sites. As a result of the COVID-19
pandemic, the Group has experienced a period of
unprecedented change. The health and safety
processes and procedures were enhanced at sites
through the engagement, supervision and safety
checks required ‘to keep people safe’ reinforcing
the safety message and culture of putting people
at the core.
50 Greencore Group plc Annual Report and Financial Statements 2022
Group Executive Team
Leading
Dalton Philips
Chief Executive Officer
Dalton’s roles, prior to joining
Greencore on 26 September 2022,
include chief executive of daa plc,
the global airports and travel retail
group, chief executive of Wm
Morrison plc, then a FTSE 100
company and the UK’s fourth largest
supermarket chain, chief executive
of luxury goods retailer Brown
Thomas Group, and chief operating
officer of Canadian retailer Loblaw
Companies Limited. Dalton also
served as a Senior Advisor to the
Boston Consulting Group.
He started his career with Jardine
Matheson followed by Walmart.
Emma Hynes
Chief Financial Officer
Appointed as Chief Financial Officer with
effect from 19 May 2020.
Emma joined Greencore as Chief
Financial Officer Designate in April 2020
and stepped into the Chief Financial
Officer position in May 2020 having
previously served as chief financial
officer of Press Up Hospitality Group.
Emma is a highly experienced finance
leader with an in depth knowledge of
the food industry, having previously
served in a variety of finance leadership
roles in Greencore over 11 years,
including as Group Finance Director
with responsibility for all areas of
finance. She has extensive experience
in corporate activity in the UK and
internationally.
Emma is a fellow of the Institute of
Chartered Accountants, having started
her career with Deloitte.
Kevin Moore
Deputy Chief Executive Officer
Kevin was appointed Deputy
Chief Executive Officer in November
2021. Prior to his current appointment,
Kevin served as Chief Commercial
Officer with responsibility for
commercial, marketing and insight,
end-to-end value chain optimisation,
new product development, purchasing,
coordination across our business
and Greencore’s Direct to Store and
distribution operations. Kevin has also
served as Managing Director of
Greencore’s Food to Go and Prepared
Meals divisions.
Before joining Greencore as
Commercial Director in 1998, Kevin
worked in senior roles in management
consultancy and retail.
Andy Parton
Chief Commercial Officer
Andy is Chief Commercial Officer,
responsible for setting and delivering
the commercial strategy and
agenda. The role covers marketing,
insights and category management,
product development and
management, sales and
procurement.
Prior to this Andy was Business
Director for our Food to Go
business. Andy joined Greencore
in 2014 having previously held
senior commercial positions in Aldi
and PepsiCo.
by example to
drive excellence
51Strategic Report | Directors’ Report | Financial Statements
Guy Dullage
Chief People Officer
Guy is Chief People Officer and is
responsible for human resources
across the Group. Prior to this, Guy
served as HR Director for the
Prepared Meals division.
Guy joined Greencore in 2015.
Previously, he held a variety of senior
HR roles in the UK and Europe, with
the majority of his experience over
this time within the manufacturing
sector. Guy has also held a number
of directorships, board and pension
trustee roles during his career.
Guy became a Fellow of the CIPD
in 2014.
Lee Finney
Chief Operating Officer
Lee joined Greencore in October 2022
as Chief Operating Officer. He is the
executive accountable for technology,
sustainability, and the end-to-end
supply chain.
He has extensive experience in
transforming the operational
performance of global businesses,
having held Vice President, Chief
Transformation Officer and Chief Supply
Officer roles in the UK, Europe, North
America and Australasia.
Lee has an MBA, was awarded the
Advanced Management Program,
and has completed executive
programmes at MIT and Stanford, USA.
Damien Moynagh
General Counsel and
Company Secretary
Damien joined Greencore in
November 2022 as General Counsel
and Company Secretary and will be
responsible for leading Greencore’s
Legal and Company Secretariat
functions.
He has over 20 years’ experience as
a corporate lawyer and senior
executive across Europe, the United
States and Asia. In his most recent
role as General Counsel and
Company Secretary of a FTSE250
company, he was responsible for
the group’s legal and corporate
secretarial functions and also
its risk, sustainability, quality and
compliance functions.
He has also completed executive
education programmes most
recently at Cambridge University
and Columbia University.
Nigel Smith
Chief Transformation Officer
Nigel is Chief Transformation Officer,
and has been leading the work on
our Better Greencore transformation
programme since the beginning of
this year.
He joined Greencore in 2017, and has
held a variety of roles supporting the
strategic development of the Group,
most recently as Chief Strategy Officer.
Prior to joining Greencore, Nigel worked
as a strategy consultant with McKinsey &
Company, and in multiple public policy
positions within European Union
institutions.
Nigel is a an alum of Trinity College
Dublin, Sciences-Po in Paris and the
College d’Europe in Bruges. He most
recently completed an executive
education diploma in Business Finance
from University College Dublin.
52 Greencore Group plc Annual Report and Financial Statements 2022
Chair’s introduction to corporate governance
“Throughout FY22, the Board remained
committed to maintaining the highest
standards of corporate governance,
recognising that this is key to promoting
long-term sustainable success.”
Compliance with the Code
The Directors present their report and
Financial Statements for year ended
30 September 2022. The Directors’ Report
is contained on pages 52 to 116.
The 2018 UK Corporate Governance Code
(the ‘Code’), which is available on the
Financial Reporting Council’s website,
www.frc.org.uk, continues to be the standard
against which we measured ourselves in
FY22. This letter explains how the Group has
applied the principles as set out in the Code.
Except as outlined below, the Board believes
that the Group complied with the provisions
of the Code for the financial year ended
30 September 2022.
Although Greencore is not listed on Euronext
Dublin, the Group also voluntarily adopts the
provisions of the Irish Corporate Governance
Annex (the ‘Annex’). The full text of the Annex
is available on Euronext Dublin’s website,
www.euronext.com.
Deviation from the Code
Last year, we identified two areas of non-
compliance with provisions of the Code,
which also apply to FY22, namely alignment
of Executive Director pension contributions to
the workforce (Provision 38) and chair tenure
not exceeding nine years from the date of first
appointment to the Board (Provision 19).
In FY20, the then Chief Executive Officer
(‘CEO’) Patrick Coveney voluntarily agreed to
reduce his contractual pension entitlement
by 5% annually over a four year period.
Consistent with this, from April 2021 until his
departure from the business on 30 March
2022, Patrick Coveney’s pension contribution
reduced to 25%. The pension contribution
rate for CEO and Executive Director Dalton
Philips who was appointed on 26 September
2022 is 8% of salary, which is in line with the
pension contributions available to the wider
colleague base.
Whilst I was first appointed as Board Chair
in January 2013, I joined the Board in
November 2008. The key considerations on
the continuation of my tenure as Board Chair
until no later than the 2023 Annual General
Meeting (‘AGM’) were disclosed in the FY21
Annual Report and followed consultation
with shareholders who expressed their
support. On 15 September 2022, the Board
announced that following a comprehensive
Board Chair search and selection process,
it had appointed Leslie Van de Walle as
Non-Executive Director and Chair Designate
and Leslie will join the Board on 1 December
2022. Leslie will succeed me as Board Chair
at the conclusion of the AGM in January
2023 at which point I will retire as Non-
Executive Board Chair and from the Board.
During the year, following the resignation
of Patrick Coveney as CEO and Executive
Director on 30 March 2022 and whilst the
search for a new CEO was underway, I was
appointed Executive Chair on 31 March 2022.
This gave rise to a temporary deviation from
two provisions of the Code, being: the
requirement for all members of the
Remuneration Committee to be independent
Non-Executive Directors (Provision 32);
and the requirement that the role of chief
executive and chair should not be exercised
by the same person (Provision 9). Further
details in connection with these deviations
from the Code, both of which were remedied
during FY22 are set out on pages 73 to 74.
Corporate governance in FY22
Throughout FY22, the Board remained
committed to maintaining the highest
standards of corporate governance and
ensuring our processes are aligned with best
practice. The Board recognises that this is key
to promoting long-term sustainable success.
The Board continued to focus on succession
planning, in particular Board Chair and CEO
succession, engagement with our colleagues
and other stakeholders, monitoring progress
against our sustainability goals, and
strengthening our inclusion and diversity
initiatives.
The Board continued with visits to Group
sites, allowing first hand experience of the
current workplace culture.
Priorities for FY23
Our overarching objective remains
unchanged. It is to continue to deliver value
and to create a positive and sustainable
impact for all our stakeholders. The Board
remains confident that the Group is well
placed to create value for all stakeholder
groups going into FY23.
Amongst some of the key priorities for the
Board in FY23 is a continued focus on
ensuring that the incentive arrangements for
Executive Directors are aligned with our
remuneration principles and shareholders’
expectations; the Board is grateful for the
input and insights received from
shareholders and the open dialogue it has
been able to have during FY22. The Board
appreciates that our remuneration incentives
must be fair in order to motivate and retain
our colleagues and we will continue to
monitor our progress on this. Board
succession planning and refreshment will
also remain an area of focus for FY23.
We remain committed to our focus on
engagement with our colleagues and other
stakeholders. We do this through site visits, a
range of colleague communication activities,
our annual People at the Core colleague
survey, colleague forums, our inclusion and
diversity initiatives, and monitoring progress
against our sustainability goals to ensure
our shareholders’ interests are taken into
consideration when making decisions –
all consistent with our purpose to make
every day taste better.
I would like to thank my Board colleagues past
and present for their ongoing commitment
and support during my time at Greencore.
Gary Kennedy
Board Chair
28 November 2022
53Strategic Report | Directors’ Report | Financial Statements
60%40%
80%
20%
10%
10%
10%
70%
Board diversity as at 30 September 2022
Number of scheduled
Board meetings in FY22
8
Number of new Directors
in FY22
1
Board meeting attendance in
FY22
98%
Independence of the Board
excluding the Chair as at the
end of FY22
78%
Read our Report of the Nomination and Governance Committee (pages 72 to 75)
Compliance with the UK
Corporate Governance Code
The Company applied the principles of the 2018 UK
Corporate Governance Code (the ‘Code’) for the
financial year ended 30 September 2022.
Available from www.frc.org.uk
Except as outlined on page 52, the Board believes that
the Group complied with the provisions of the Code
for the financial year ended 30 September 2022.
Whilst Greencore is not listed on Euronext Dublin,
for increased transparency we have also chosen to
voluntarily adopt the provisions of the Irish Corporate
Governance Annex (the ‘Annex’).
Available from www.euronext.com.
Further information on these governance matters
can be found as follows:
Board leadership and
company purpose
See more on page 56
Audit, risk and internal control
See more on page 76
Division of responsibilities
See more on page 68
Remuneration
See more on page 83
Composition, succession
and evaluation
See more on page 70
Board members and scheduled meeting attendance
during FY22
Board
1
John Amaechi 8/8
Sly Bailey 8/8
Patrick Coveney
2
3/4
Paul Drechsler 8/8
Gordon Hardie
3
5/5
Linda Hickey 8/8
Emma Hynes 8/8
Gary Kennedy 8/8
Anne O’Leary 8/8
Dalton Philips
4
0/0
Helen Rose 8/8
Helen Weir 8/8
1. The Board and each Committee held additional meetings throughout the year.
Further details on additional Committee meetings are set out in the respective
Committee reports.
2. Patrick Coveney resigned as CEO and Executive Director on 30 March 2022.
3. Gordon Hardie stepped down as a Non-Executive Director on 3 May 2022.
4. Dalton Philips was appointed as CEO and Executive Director on 26 September 2022.
Executive Non-Executive <1 year 1-5 years 5-10 years >10 years
By gender By role By tenure
Female Male
54 Greencore Group plc Annual Report and Financial Statements 2022
Board of Directors
Gary Kennedy
BA, FCA
Dalton Philips
BA, MBA
Emma Hynes
MBA, FCA
John Amaechi
OBE,BSc
Sly Bailey Paul Drechsler
CBE, BA, BAI
Linda Hickey
BBS
Anne O’Leary
CDir
Helen Rose
BSc, FCA
Helen Weir
CBE, MA, MBA, FCMA
Damien
Moynagh
Non-Executive
Director
Board Chair
(Aged 64)
Chief Executive
Officer
(Aged 54)
Chief Financial
Officer
(Aged 47)
Non-Executive
Director
(Aged 52)
Non-Executive
Director
Senior Independent
Director
(Aged 60)
Non-Executive
Director
(Aged 66)
Non-Executive
Director
(Aged 60)
Non-Executive
Director
(Aged 55)
Non-Executive
Director
(Aged 57)
Non-Executive
Director
(Aged 60)
General Counsel and
Group Company
Secretary
(Aged 45)
Appointed as Non-
Executive Director with
effect from 20 November
2008, Board Chair with
effect from 29 January
2013 and Executive Chair
from 31 March 2022 to
25 September 2022.
Appointed as Chief
Executive Officer with
effect from 26 September
2022.
Appointed as Chief
Financial Officer with
effect from 19 May 2020.
Appointed as Non-
Executive Director with
effect from 1 February
2021.
Appointed as Non-
Executive Director with
effect from 17 May 2013
and Senior Independent
Director with effect from
14 December 2017.
Appointed as Non-
Executive Director with
effect from 1 May 2020.
Appointed as Non-
Executive Director with
effect from 1 February
2021.
Appointed as Non-
Executive Director with
effect from 1 February
2021.
Appointed as Non-
Executive Director with
effect from 11 April 2018.
Appointed as Non-
Executive Director with
effect from 1 February
2020.
Appointed as Group
Company Secretary with
effect from 7 November
2022.
Relevant skills and experience
Gary is a highly skilled
business leader with a
wealth of executive and
non-executive experience
spanning a variety of
sectors. Gary currently
serves as board chair of
Goodbody Stockbrokers
and Norcros plc. He
previously served as board
chair of Connect Group
plc and Green REIT plc and
also served on the board
of Elan plc, Allied Irish Bank
plc, Friends First Holdings
Ltd and IDA Ireland. Gary
was a Government-
appointed director of
IBRC.
As Board Chair, Gary is
committed to effective
governance and fosters
high quality debate by
coordinating the diverse
knowledge, experience
and perspectives on the
Board. He understands
and promotes constructive
engagement with
shareholders and spends
time building relationships
both with fellow Board
members and colleagues
throughout the business.
Gary is a fellow of the
Institute of Chartered
Accountants and a council
member of the Institute of
Directors. He is a director
of Focus Ireland, a
founding chair of the 30%
Club Ireland and served as
co-chair of Balance for
Better Business, showing
his commitment to
diversity and inclusion.
Dalton’s roles, prior to
joining Greencore on
26 September 2022,
include chief executive of
daa plc, the global airports
and travel retail group,
chief cxecutive of Wm
Morrison plc, then a FTSE
100 company and the UK’s
fourth largest supermarket
chain, chief executive of
luxury goods retailer
Brown Thomas Group,
and chief operating officer
of Canadian retailer
Loblaw Companies
Limited. Dalton also served
as a senior advisor to the
Boston Consulting Group.
He started his career
with Jardine Matheson
followed by Walmart.
Dalton currently serves as
a non-executive director
of Wilko Hardware Stores
Limited and IBEC CLG.
Dalton has a BA from
University College Dublin,
and a MBA from Harvard
Business School.
Emma joined Greencore
as Chief Financial Officer
Designate in April 2020
and stepped into the Chief
Financial Officer position in
May 2020 having
previously served as chief
financial officer of Pressup
Hospitality Group. Emma
is a highly experienced
finance leader with an in
depth knowledge of the
food industry having
previously served in
a variety of finance
leadership roles in
Greencore over eleven
years, including as Group
Finance Director with
responsibility for all areas
of finance. She has
extensive experience in
corporate activity in the
UK and internationally.
Emma is a fellow of the
Institute of Chartered
Accountants, having
started her career with
Deloitte.
John is a respected
organisational
psychologist, executive
coach and is the founder
and chief executive officer
of APS Intelligence Ltd, a
talent and leadership
development firm. He has
a diverse range of industry
experience, currently
serving on the Lloyd’s of
London culture advisory
group, the KPMG UK LLP
inclusive leadership board
and Sanofi’s diversity,
equity and inclusion board.
In addition, John is a
leadership training partner
with the National Health
Service (‘NHS’) and a
non-executive director
of Manchester University
NHS Trust. John also
previously served on the
Inclusive Advisory Panel
at Tesco.
John is a Chartered
Scientist, a Chartered
Fellow of the Chartered
Institute of Personnel and
Development and a Fellow
of the Royal Society for
Public Health. He is a
research fellow at the
University of East London
and his research interests
are effective, inclusive
leadership, building
high-performing teams
and organisational design
that maximises
productivity and human
thriving in readiness for the
future world of work.
Sly has extensive business
leadership experience
having been chief
executive officer for almost
ten years of one of the UK’s
largest media companies,
Trinity Mirror plc. She also
previously served as chief
executive officer of IPC
Media.
Sly has held a number of
listed and private board
roles, including serving as a
non-executive director of
Ladbrokes plc and EMI plc,
where she was also senior
independent director and
chair of the remuneration
committee. She has also
served as a non-executive
director and chair of the
remuneration committee
for the Press Association.
Sly currently serves as a
non-executive director of
IPSX Group Limited where
she is also chair of the
remuneration committee
and a member of the
nomination committee.
Sly’s broad knowledge
spanning a variety of
sectors enables her to
understand different
perspectives and business
circumstances
underpinning her
appointment as Senior
Independent Director. Sly’s
strong interest in employee
related matters has been
invaluable in her role as
Workforce Engagement
Director and Chair of the
Nomination and
Governance Committee.
Paul has considerable
executive and non-
executive director
experience in a variety of
UK and international
companies across a range
of industries.
Paul was previously chair
of Bibby Line Group and
a senior non-executive
director of Essentra Plc,
where he was chair of the
remuneration committee
and a member of the audit
and nominations
committees. Prior to this,
he spent nine years as
chairman and chief
executive officer of the
Wates Group. Paul
recently retired as
chancellor of Teesside
University and previously
served as president of the
Confederation of British
Industry and was chair of
Teach First, a UK
education charity.
Paul is currently a
non-executive director of
Cazenove Capital. He also
serves as chair of both the
International Chamber of
Commerce (UK) and
BusinessLDN. In July
2022, Paul was appointed
president of the Society of
Chemical Industry. He is
also a member of the
global advisory board of
Trinity College Dublin.
Linda brings a wealth of
experience and
knowledge in capital
markets and corporate
governance having spent
her executive career in
stockbroking and
investment banking. Linda
previously worked at NCB
Stockbrokers and Merrill
Lynch, and more recently
served as head of
corporate broking at
Goodbody Stockbrokers.
Linda is a non-executive
director of Kingspan
Group plc, a global leader
in insulation and building
envelope solutions, where
she serves as senior
independent director,
worker relations director,
chair of the remuneration
committee and is a
member of the
nominations committee.
Linda is also a non-
executive director of Cairn
Homes plc where she is
remuneration committee
chair and a member of the
audit and risk committee.
She is also vice chair of
Quanta Capital’s advisory
board and previously
served as chair of the Irish
Blood Transfusion Service.
Anne brings significant
experience spanning a
variety of sectors including
digital integrations, data
analytics, cultural change
programmes, and strategic
acquisitions and
partnerships. Anne
currently serves as vice
president of Meta’s
mid-market business
division for the EMEA
region. Prior to joining
Meta, Anne served as chief
executive officer of
Vodafone Ireland for nine
years, prior to which she
was managing director of
BT Ireland.
Anne previously served as
a non-executive director
of Vodacom Group Ltd,
South Africa’s leading
connectivity and financial
services company. She
also served as chair of
Goal Global, an
international humanitarian
response agency, from
2015 to 2021 and also as
president of the Dublin
Chamber of Commerce
from 2018 to 2019. Anne is
also a current board
member of IBEC CLG, a
business and employer
association for
organisations based in
Ireland and Ludgate, an
Irish non profit enterprise
facilitating job growth via
digital technology and
remote working hubs.
Helen brings substantial
operational, financial, risk
and UK retail experience
gained from senior finance
roles at Dixons, Forte,
Safeway and Lloyds
Banking Group.
Helen has significant
transformation experience
gained from her roles as
retail integration director at
Lloyds Banking Group and
as chief operating officer at
TSB Banking Group plc.
Helen has a probing focus
on cyber security, risk
matters, and internal
controls. In addition, she
understands the
importance of building a
diverse talent pipeline and
brings strong insight in this
area to the Board. Helen
also recognises the
fundamental importance
of embedding
sustainability into the
Group. As Sustainability
Engagement Director,
Helen acts as a strong
source of guidance and
support to both the Board
and colleagues on the
Group’s sustainability
agenda.
Helen is a fellow of the
Institute of Chartered
Accountants in England
and Wales, having trained
with Coopers & Lybrand.
Helen is a qualified
accountant and a highly
experienced finance
professional with extensive
board experience having
served as chief financial
officer of a number of
companies including Marks
& Spencer plc, John Lewis
Partnership, Lloyds Banking
Group and Kingfisher plc.
Helen is a member of the
supervisory board of the
retail company Ahold
Delhaize, where she chairs
the governance and
nomination committee and
is a member of the audit,
finance and risk committee.
She is also a non-executive
director of Superdry plc,
where she serves as senior
independent director, chair
of the nomination
committee and as a
member of the audit and
remuneration committees.
Helen is a non-executive
director of Compass Group
(the parent company of Bata
Shoes), where she also
chairs the audit committee.
Helen was appointed chair
designate of National
Express Group PLC with
effect from 1 October 2022.
Helen was previously
non-executive director
and chair of the audit
committees of Just Eat plc,
GEMS Education and Royal
Mail Holdings as well as
non-executive director of
SABMiller plc and Cineworld
plc.
Damien joined Greencore
in November 2022 and
leads our Legal and
Company Secretariat
functions. He has over 20
years’ experience as a
corporate lawyer and
senior executive across
Europe, the United States
and Asia. In his most
recent role as general
counsel and company
secretary of FTSE 250
listed UDG Healthcare plc,
Damien was responsible
for the group’s legal and
corporate secretarial
functions and also its risk,
sustainability, quality and
compliance functions.
Prior to this, Damien was
chief operating officer and
general counsel at Sysnet
Global Solutions, a
fast-growing global
technology business.
Damien trained and
practiced as a corporate/
merger and acquisitions
lawyer with Freshfields
Bruckhaus Deringer in
their London, Toyko and
New York offices and
subsequently with Maples
and Calder in their Dublin
office. He has also
completed executive
education programmes
most recently at
Cambridge University and
Columbia University.
Committee membership
55Strategic Report | Directors’ Report | Financial Statements
Gary Kennedy
BA, FCA
Dalton Philips
BA, MBA
Emma Hynes
MBA, FCA
John Amaechi
OBE,BSc
Sly Bailey Paul Drechsler
CBE, BA, BAI
Linda Hickey
BBS
Anne O’Leary
CDir
Helen Rose
BSc, FCA
Helen Weir
CBE, MA, MBA, FCMA
Damien
Moynagh
Non-Executive
Director
Board Chair
(Aged 64)
Chief Executive
Officer
(Aged 54)
Chief Financial
Officer
(Aged 47)
Non-Executive
Director
(Aged 52)
Non-Executive
Director
Senior Independent
Director
(Aged 60)
Non-Executive
Director
(Aged 66)
Non-Executive
Director
(Aged 60)
Non-Executive
Director
(Aged 55)
Non-Executive
Director
(Aged 57)
Non-Executive
Director
(Aged 60)
General Counsel and
Group Company
Secretary
(Aged 45)
Appointed as Non-
Executive Director with
effect from 20 November
2008, Board Chair with
effect from 29 January
2013 and Executive Chair
from 31 March 2022 to
25 September 2022.
Appointed as Chief
Executive Officer with
effect from 26 September
2022.
Appointed as Chief
Financial Officer with
effect from 19 May 2020.
Appointed as Non-
Executive Director with
effect from 1 February
2021.
Appointed as Non-
Executive Director with
effect from 17 May 2013
and Senior Independent
Director with effect from
14 December 2017.
Appointed as Non-
Executive Director with
effect from 1 May 2020.
Appointed as Non-
Executive Director with
effect from 1 February
2021.
Appointed as Non-
Executive Director with
effect from 1 February
2021.
Appointed as Non-
Executive Director with
effect from 11 April 2018.
Appointed as Non-
Executive Director with
effect from 1 February
2020.
Appointed as Group
Company Secretary with
effect from 7 November
2022.
Relevant skills and experience
Gary is a highly skilled
business leader with a
wealth of executive and
non-executive experience
spanning a variety of
sectors. Gary currently
serves as board chair of
Goodbody Stockbrokers
and Norcros plc. He
previously served as board
chair of Connect Group
plc and Green REIT plc and
also served on the board
of Elan plc, Allied Irish Bank
plc, Friends First Holdings
Ltd and IDA Ireland. Gary
was a Government-
appointed director of
IBRC.
As Board Chair, Gary is
committed to effective
governance and fosters
high quality debate by
coordinating the diverse
knowledge, experience
and perspectives on the
Board. He understands
and promotes constructive
engagement with
shareholders and spends
time building relationships
both with fellow Board
members and colleagues
throughout the business.
Gary is a fellow of the
Institute of Chartered
Accountants and a council
member of the Institute of
Directors. He is a director
of Focus Ireland, a
founding chair of the 30%
Club Ireland and served as
co-chair of Balance for
Better Business, showing
his commitment to
diversity and inclusion.
Dalton’s roles, prior to
joining Greencore on
26 September 2022,
include chief executive of
daa plc, the global airports
and travel retail group,
chief cxecutive of Wm
Morrison plc, then a FTSE
100 company and the UK’s
fourth largest supermarket
chain, chief executive of
luxury goods retailer
Brown Thomas Group,
and chief operating officer
of Canadian retailer
Loblaw Companies
Limited. Dalton also served
as a senior advisor to the
Boston Consulting Group.
He started his career
with Jardine Matheson
followed by Walmart.
Dalton currently serves as
a non-executive director
of Wilko Hardware Stores
Limited and IBEC CLG.
Dalton has a BA from
University College Dublin,
and a MBA from Harvard
Business School.
Emma joined Greencore
as Chief Financial Officer
Designate in April 2020
and stepped into the Chief
Financial Officer position in
May 2020 having
previously served as chief
financial officer of Pressup
Hospitality Group. Emma
is a highly experienced
finance leader with an in
depth knowledge of the
food industry having
previously served in
a variety of finance
leadership roles in
Greencore over eleven
years, including as Group
Finance Director with
responsibility for all areas
of finance. She has
extensive experience in
corporate activity in the
UK and internationally.
Emma is a fellow of the
Institute of Chartered
Accountants, having
started her career with
Deloitte.
John is a respected
organisational
psychologist, executive
coach and is the founder
and chief executive officer
of APS Intelligence Ltd, a
talent and leadership
development firm. He has
a diverse range of industry
experience, currently
serving on the Lloyd’s of
London culture advisory
group, the KPMG UK LLP
inclusive leadership board
and Sanofi’s diversity,
equity and inclusion board.
In addition, John is a
leadership training partner
with the National Health
Service (‘NHS’) and a
non-executive director
of Manchester University
NHS Trust. John also
previously served on the
Inclusive Advisory Panel
at Tesco.
John is a Chartered
Scientist, a Chartered
Fellow of the Chartered
Institute of Personnel and
Development and a Fellow
of the Royal Society for
Public Health. He is a
research fellow at the
University of East London
and his research interests
are effective, inclusive
leadership, building
high-performing teams
and organisational design
that maximises
productivity and human
thriving in readiness for the
future world of work.
Sly has extensive business
leadership experience
having been chief
executive officer for almost
ten years of one of the UK’s
largest media companies,
Trinity Mirror plc. She also
previously served as chief
executive officer of IPC
Media.
Sly has held a number of
listed and private board
roles, including serving as a
non-executive director of
Ladbrokes plc and EMI plc,
where she was also senior
independent director and
chair of the remuneration
committee. She has also
served as a non-executive
director and chair of the
remuneration committee
for the Press Association.
Sly currently serves as a
non-executive director of
IPSX Group Limited where
she is also chair of the
remuneration committee
and a member of the
nomination committee.
Sly’s broad knowledge
spanning a variety of
sectors enables her to
understand different
perspectives and business
circumstances
underpinning her
appointment as Senior
Independent Director. Sly’s
strong interest in employee
related matters has been
invaluable in her role as
Workforce Engagement
Director and Chair of the
Nomination and
Governance Committee.
Paul has considerable
executive and non-
executive director
experience in a variety of
UK and international
companies across a range
of industries.
Paul was previously chair
of Bibby Line Group and
a senior non-executive
director of Essentra Plc,
where he was chair of the
remuneration committee
and a member of the audit
and nominations
committees. Prior to this,
he spent nine years as
chairman and chief
executive officer of the
Wates Group. Paul
recently retired as
chancellor of Teesside
University and previously
served as president of the
Confederation of British
Industry and was chair of
Teach First, a UK
education charity.
Paul is currently a
non-executive director of
Cazenove Capital. He also
serves as chair of both the
International Chamber of
Commerce (UK) and
BusinessLDN. In July
2022, Paul was appointed
president of the Society of
Chemical Industry. He is
also a member of the
global advisory board of
Trinity College Dublin.
Linda brings a wealth of
experience and
knowledge in capital
markets and corporate
governance having spent
her executive career in
stockbroking and
investment banking. Linda
previously worked at NCB
Stockbrokers and Merrill
Lynch, and more recently
served as head of
corporate broking at
Goodbody Stockbrokers.
Linda is a non-executive
director of Kingspan
Group plc, a global leader
in insulation and building
envelope solutions, where
she serves as senior
independent director,
worker relations director,
chair of the remuneration
committee and is a
member of the
nominations committee.
Linda is also a non-
executive director of Cairn
Homes plc where she is
remuneration committee
chair and a member of the
audit and risk committee.
She is also vice chair of
Quanta Capital’s advisory
board and previously
served as chair of the Irish
Blood Transfusion Service.
Anne brings significant
experience spanning a
variety of sectors including
digital integrations, data
analytics, cultural change
programmes, and strategic
acquisitions and
partnerships. Anne
currently serves as vice
president of Meta’s
mid-market business
division for the EMEA
region. Prior to joining
Meta, Anne served as chief
executive officer of
Vodafone Ireland for nine
years, prior to which she
was managing director of
BT Ireland.
Anne previously served as
a non-executive director
of Vodacom Group Ltd,
South Africa’s leading
connectivity and financial
services company. She
also served as chair of
Goal Global, an
international humanitarian
response agency, from
2015 to 2021 and also as
president of the Dublin
Chamber of Commerce
from 2018 to 2019. Anne is
also a current board
member of IBEC CLG, a
business and employer
association for
organisations based in
Ireland and Ludgate, an
Irish non profit enterprise
facilitating job growth via
digital technology and
remote working hubs.
Helen brings substantial
operational, financial, risk
and UK retail experience
gained from senior finance
roles at Dixons, Forte,
Safeway and Lloyds
Banking Group.
Helen has significant
transformation experience
gained from her roles as
retail integration director at
Lloyds Banking Group and
as chief operating officer at
TSB Banking Group plc.
Helen has a probing focus
on cyber security, risk
matters, and internal
controls. In addition, she
understands the
importance of building a
diverse talent pipeline and
brings strong insight in this
area to the Board. Helen
also recognises the
fundamental importance
of embedding
sustainability into the
Group. As Sustainability
Engagement Director,
Helen acts as a strong
source of guidance and
support to both the Board
and colleagues on the
Group’s sustainability
agenda.
Helen is a fellow of the
Institute of Chartered
Accountants in England
and Wales, having trained
with Coopers & Lybrand.
Helen is a qualified
accountant and a highly
experienced finance
professional with extensive
board experience having
served as chief financial
officer of a number of
companies including Marks
& Spencer plc, John Lewis
Partnership, Lloyds Banking
Group and Kingfisher plc.
Helen is a member of the
supervisory board of the
retail company Ahold
Delhaize, where she chairs
the governance and
nomination committee and
is a member of the audit,
finance and risk committee.
She is also a non-executive
director of Superdry plc,
where she serves as senior
independent director, chair
of the nomination
committee and as a
member of the audit and
remuneration committees.
Helen is a non-executive
director of Compass Group
(the parent company of Bata
Shoes), where she also
chairs the audit committee.
Helen was appointed chair
designate of National
Express Group PLC with
effect from 1 October 2022.
Helen was previously
non-executive director
and chair of the audit
committees of Just Eat plc,
GEMS Education and Royal
Mail Holdings as well as
non-executive director of
SABMiller plc and Cineworld
plc.
Damien joined Greencore
in November 2022 and
leads our Legal and
Company Secretariat
functions. He has over 20
years’ experience as a
corporate lawyer and
senior executive across
Europe, the United States
and Asia. In his most
recent role as general
counsel and company
secretary of FTSE 250
listed UDG Healthcare plc,
Damien was responsible
for the group’s legal and
corporate secretarial
functions and also its risk,
sustainability, quality and
compliance functions.
Prior to this, Damien was
chief operating officer and
general counsel at Sysnet
Global Solutions, a
fast-growing global
technology business.
Damien trained and
practiced as a corporate/
merger and acquisitions
lawyer with Freshfields
Bruckhaus Deringer in
their London, Toyko and
New York offices and
subsequently with Maples
and Calder in their Dublin
office. He has also
completed executive
education programmes
most recently at
Cambridge University and
Columbia University.
Committee membership
Board
Committees
Audit and Risk
Nomination and
Governance
Remuneration
Committee Chair
56 Greencore Group plc Annual Report and Financial Statements 2022
Board Leadership and Company Purpose
Board leadership and company purpose
It is the responsibility of the Board to promote the long term
sustainable success of the Group and to generate value for all
stakeholders. The Board is responsible for setting the Company’s
purpose and strategy and for ensuring that these are aligned to the
Company’s culture.
Board leadership
The Board is committed to the delivery of a clear strategy,
underpinned by the three pillars of Growth, Relevance and
Differentiation. Throughout FY22, the Group has continued to
act in furtherance of each of these pillars despite ongoing external
macro-challenges. Our strategy is set out on pages 16 to 19.
An overview of the key activities of the Board for FY22 is set out on
pages 58 to 60.
Company purpose
The Board believes that articulating the Group’s purpose is key to
accelerating growth and deepening the Group’s impact among its
stakeholders. The Board recognises that embedding the Group’s
purpose is a cornerstone of its leadership role. We have always
been a purposeful business, and during FY22, the Board spent time
reviewing our progress on delivering our commitments set in FY20
(as detailed in our FY20 Annual Report and Financial Statements),
and how we live our purpose through our four differentiators of
People at the Core, Sustainability, Great Food and Excellence.
Making every day taste better
Our purpose reflects our ongoing ambitions to always strive for
better. Every day, under the Board’s leadership, our colleagues make
a positive contribution to the lives of many people, including by
providing convenient, nutritious and tasty food for our customers
and consumers whilst sourcing responsibly. The Board is responsible
for ensuring that we have processes in place to look after our
colleagues and care for our communities and the planet. Further
information on the Group’s purpose is set out on page 4 of the
Strategic Report.
How we are governed
How the Board operates
The Directors are responsible for the proper stewardship of the
Group’s affairs, both on an individual and collective basis, and it is
the Board alone that has the authority and responsibility for planning,
directing and controlling the activities of the Group.
There is an agreed procedure for Directors to take independent legal
advice at the expense of the Company in the furtherance of their
duties as Directors of the Company. In addition, the Directors are
indemnified for any legal action taken against them in respect of
matters pertaining to their duties as Directors, subject always to the
limitations under Irish company law.
Matters reserved to the Board
There is an agreed list of matters reserved for Board consideration
which is formalised in a Matters Reserved to the Board Policy. This is
reviewed annually and updated as appropriate. The Matters Reserved
to the Board Policy was last reviewed in November 2021 and is
available under the Investor Relations section of the Group’s website,
www.greencore.com.
Conflicts of interest
Under the Board’s formal Conflicts of Interest Policy, all Directors
have a duty to avoid a situation in which they have, or may have,
a direct or indirect interest that conflicts, or possibly may conflict,
with the interests of the Company while serving on the Board.
This Conflicts of Interest Policy was last reviewed in July 2022.
Directors are not permitted to vote regarding their own conflicts,
if any.
Board Committees
In order to assist the Board in the fulfilment of its responsibilities,
it has established an effective committee structure. Details of
the various Committees’ members, together with their relevant
biographies are set out on pages 54 and 55 of this Report. Further
details on the role of the Committees and the work undertaken by
each Committee in the year under review can be found on pages
72 to 108.
Our stakeholders
The Board is aware that our actions and decisions impact all of the
Group’s stakeholders and is committed to actively engaging with
and understanding the views of our different stakeholders and taking
their views into consideration. Read more on our engagement with
stakeholders throughout the year on pages 61 to 65.
57Strategic Report | Directors’ Report | Financial Statements
Governance structure
The Board
Collectively responsible for promoting the long term sustainable success of the Group. Its role is to lead and direct the Group by
setting the purpose and strategy, overseeing management and monitoring and assessing culture. Its focus is to ensure the long term
sustainability of the business, for the benefit of colleagues, customers, suppliers, consumers, shareholders and local communities.
Board Committees
Assist the Board in the fulfilment of its duties and responsibilities. Each Committee is responsible for reviewing and overseeing
activities within its particular Terms of Reference. The Chair of each Committee provides a summary of the proceedings of any
Committee meetings held since the previous Board meeting at each scheduled Board meeting.
Nomination and
Governance Committee
Oversees succession planning,
Board and Committee composition
and ensures effective corporate
governance processes.
Read more on page 72
Audit and Risk Committee
Monitors the integrity of the
Company’s financial statements and
its financial compliance, and oversees
risk management and internal
controls.
Read more on page 76
Remuneration Committee
Sets the remuneration policy and
compensation arrangements for
Executive Directors, the Board
Chair and senior management.
Read more on page 83
Chief Executive Officer
Overall responsibility for running the
business, driving shareholder value and
developing strong relationships with
stakeholders.
Chief Financial Officer
Primarily responsible for managing the
financial affairs of the Company and
optimising its financial performance. Also
responsible for Internal Audit and risk
management as well as the Group’s tax
affairs.
Group Executive Team
Read more on page 50
58 Greencore Group plc Annual Report and Financial Statements 2022
Board activities and engagement with stakeholders
The Board’s approach is to have strong governance structures that fit the
needs of the business and ensure that we add value in all that we do. In
addition to the eight scheduled Board meetings, the Board formally
convened an additional 11 times during FY22. The following is a high
level overview of the key Board activities during the year.
Board strategy and business plans
Evaluated and debated presentations from management at the
annual two day strategy session
Approved and oversaw the implementation of the Group’s
Better Greencore programme and monitored progress via
regular Board updates
Considered key initiatives as part of the ongoing strategic
planning cycle
Received regular updates on new business opportunities with
new and existing customers
Approved £10m share buyback programme as part of
recommencement of value return of up to £50m over the next
two years
Received updates and monitored progress on the Group’s
sustainability strategy, the Better Future Plan which includes
climate impact and action, and climate related targets
Considered and approved material supplier and customer
contracts
Approved material capital expenditure
Received regular briefings from investor relations
See Strategy on page 16
Operating and financial performance
Reviewed commercial, operational and financial updates from the
Chief Executive Officer (‘CEO’)/Deputy CEO and Chief Financial
Officer
Received updates on the Greencore Excellence programmes
Reviewed and considered monthly reports, including management
accounts and details of performance against budget and the Group’s
financial position
Assessed the Group’s capital and financing requirements
Discussed and reviewed the Group’s budget presentation for FY22
and received updates on the Group insurance
Approved FY21 full year results, FY21 Annual Report and Financial
Statements, FY22 half year results, and FY22 first and third quarter
trading updates
Reviewed and discussed draft full year and half year financial results
presentations, for analysts and shareholders
Reviewed the post-close outlook
Received updates from the Chair of the Audit and Risk Committee on
its oversight of financial performance
Considered and approved the viability and going concern statements
for inclusion in the Annual Report and the Audit Committee’s advice
on making a ‘fair balanced and understandable’ (‘FBU’) statement in
the FY21 Annual Report
Considered and approved the Group Tax Strategy and Policy
Considered and approved the Group Treasury Policy
See Report of the Audit and Risk Committee on page 76
What the Board
did in FY22
59Strategic Report | Directors’ Report | Financial Statements
Governance
Received regular updates on the work undertaken by each of
the Board Committees
Received governance and compliance updates and considered
compliance with the 2018 UK Corporate Governance Code
Considered and approved Board Committee compositional
changes
Discussed contingency planning for the CEO role and
approved the appointment of Gary Kennedy as Executive Chair
for an interim period and Kevin Moore as Deputy CEO
Considered and approved the appointment of the CEO and the
Board Chair Designate and Non-Executive Director
Considered Non-Executive Director independence, including
the Board Chair
Approved the Notice of Annual General Meeting (‘AGM’) for
issue to shareholders and considered voting results,
shareholder feedback and engagement
Reviewed details of Board members’ external appointments
including associated time commitment
Considered the results of the externally facilitated Board and
Committee evaluation process commenced in FY21 and
agreed areas of focus for FY22
Led by the Board Chair, undertook an internal evaluation of the
Board’s and individual Director’s effectiveness for FY22
Reviewed the effectiveness of each of the Committees for FY22
Approved revisions to Terms of Reference of the Committees,
Board Chair and Senior Independent Director
Approved revisions to Terms of Reference for the roles of
Workforce Engagement Director and Sustainability Engagement
Director
Monitored progress on the Group inclusion and diversity
strategy and reviewed the Board Diversity Policy
Received updates from the Workforce Engagement Director
and Chief People Officer on colleague engagement initiatives
Undertook an annual review of Board policies and approved
amendments where appropriate
Approved the Group’s Modern Slavery and Human Trafficking
Transparency Statement and Gender Pay Gap Report
Received training and updates on legislation and regulation
Considered the Directors’ responsibilities under Section 225 of
the Companies Act 2014
See Composition, succession and evaluation on page 70
60 Greencore Group plc Annual Report and Financial Statements 2022
Board activities and engagement with stakeholders continued
Remuneration
Received regular updates from the Remuneration
Committee Chair on the activities of the Remuneration
Committee during FY22. Specific consideration was
given to:
• Feedback from shareholder consultation in response
to the outcome of the vote at the 2022 AGM on the
resolution to approve the FY21 Annual Report on
Remuneration;
• Draft 2023 Remuneration Policy, 2023 Performance
Share Plan and Restricted Stock Unit Plan, all to be
put to advisory shareholder vote at the 2023 AGM;
• Senior management remuneration matters;
• Recommendations on the remuneration for the
Board Chair designate and CEO; and
• Remuneration framework in the context of the wider
colleague base.
See Report on Directors’ Remuneration on page 83
Risk
In particular, consideration was given to:
• The effectiveness of internal controls and risk
management systems and internal controls
enhancements;
• Review of principal and emerging risks assessment
• Received regular updates on the IT security incident
recovery and progress on the Group’s security
improvement plan;
• Updates on risk deep dives undertaken by the
Audit and Risk Committee; and
• Received regular updates from the Audit and Risk
Committee Chair on the work undertaken in relation
to risk oversight during FY22.
See Risks and risk management on page 42
See Report of Audit and Risk Committee on page 76
61Strategic Report | Directors’ Report | Financial Statements
Our purpose-led stakeholder engagement
While the Code makes specific reference to section 172 of the United Kingdom’s Companies Act 2006, Greencore is incorporated in Ireland
andsubject to the requirements of the Companies Act 2014 of Ireland, rather than the 2006 UK legislation. Nonetheless, feedback from all
engagement activities is regularly considered by the Board as part of its decision-making processes as detailed in this section of the report.
Effective stakeholder engagement helps us better understand the impact of our decisions on all our stakeholders as well as their needs
andconcerns.
The Group’s purpose articulates our aim to create trusted relationships through effective engagement and to understand the needs of all our
stakeholders in order to deliver value and build a better, more resilient and sustainable business. The Board is aware that the Group’s actions and
decisions impact all of our stakeholders and it ensures that there is regular dialogue taking place with stakeholders, which is carried out by those
most relevant to the stakeholder group or issue, and discussed appropriately in the boardroom.
Our Sustainability Report 2022, which is due to be released at the end of January 2023 and will be available on www.greencore.com, sets out
how our purpose and sustainability strategy are interlinked with stakeholders in mind. The Group also has a Code of Ethics and Business Conduct
which set outs our fundamental principles and values directly applicable to our stakeholders. The Code of Ethics and Business Conduct is
available on www.greencore.com.
The importance of our relationships and regular dialogue with stakeholders was brought to the fore as we navigated our way through the
combined challenges associated with COVID-19 and the inflationary environment. The table below sets out the Board’s approach to stakeholder
engagement, why stakeholders matter and some key decisions made during FY22. To give greater understanding to this, we have provided clear
cross-referencing to where more detailed information can be found in this Annual Report and Financial Statements. Shareholders and other
stakeholders can be confident that the contents of our corporate reporting reflect the frameworks for strategy, stakeholder engagement,
governance, risk management and culture as established and overseen by the Board.
Why they matter How we engage
How the Board complements
engagement efforts
Shareholders
The Board
recognises the
importance of
engaging with all
shareholders and
prioritises effective
dialogue to ensure
that we capture
and embrace
feedback relating
to areas of interest
and areas of
concern, and to
ensure that our
obligations are met.
We understand that
we have a
responsibility to
ensure our
shareholders’
interests are
promoted and we
remain committed
to delivering value
for them.
The Group welcomes queries via telephone, post or email and up
to date contact details are available on the Group’s website, www.
greencore.com. The Investor Relations section of the website also
provides a library of all relevant shareholder communications,
financial results and updates, a regularly updated analysis of analyst
consensus estimates, and a history of the Company’s share price.
Attendance of, and questions from, shareholders at the Company’s
general meetings are welcomed by the Board. This year, our
shareholders were encouraged not to physically attend the
Company’s Annual General Meeting (‘AGM’) on 27 January 2022
due to the Irish Government’s COVID-19 restrictions and public
health guidance that were in place at that time on gatherings, and
to prioritise the health and safety of our shareholders. They were
instead invited to submit proxy instructions to ensure they could
vote and be represented at the AGM, without attending in person.
Shareholders had the option to listen live to the proceedings of the
AGM, by telephone or by audio and had the option to submit
questions in writing in advance of the AGM (either by post or by
email) or online during the AGM. The majority of the Board
attended the AGM either in person or via electronic facilities.
Shareholder presentations are made at the time of issue of the
Group’s half year and full year results. Q1 and Q3 trading updates
are also released in January and July respectively. In FY21 the
Group also released a FY21 and Full Year Trading Update.
During FY22, the Board and the Head of
Investor Relations maintained ongoing
engagement with existing and potential
investors.
The Board received regular updates on
analysts’ reports and share price
developments as well as on shareholder
relations, summarising key feedback from our
principal shareholders derived from an
investor relations programme comprising:
• One-on-one investor meetings with the
Board Chair, Chief Executive Officer (‘CEO’),
Chief Financial Officer and Head of Investor
Relations;
• Feedback from investors following meetings
and shareholder presentations on the
Group’s trading updates, half year and full
year results;
• Regular email and telephone contact with
investors and analysts;
• The Annual General Meeting; and
• Engagement with investors on ESG matters.
Shareholders through voting at the 2022
AGM, were given an opportunity to indicate
their opinion on the Annual Report on
Directors’ Remuneration for the year ended
24 September 2021. Whilst the advisory
resolution to approve the Report was passed,
a significant number of shareholders did not
support the resolution (with c.46% of
shareholders voting against). The Board and
Remuneration Committee consulted
extensively with shareholders both prior to
and following the 2022 AGM, to understand
their views on key decisions, and will continue
this open dialogue in future years.
Read more
Report on Directors’ Remuneration on page 83
62 Greencore Group plc Annual Report and Financial Statements 2022
Why they matter How we engage
How the Board complements
engagement efforts
Customers
Our strategy is to
deepen our
relevance with our
customers by
driving returns
through a shared
value chain,
increasing value
through our
portfolio and by
supporting in the
achievement of
jointly held
sustainablility
commitments. As a
food manufacturer,
the Board
understands the
importance of
building long term
partnerships with
our customers
through ongoing
engagement,
helping us better
understand not
only their needs,
but also the needs
of consumers. Our
ability to respond to
customer feedback
is paramount to
ensuring we deliver
great tasting,
sustainable quality
food to the highest
technical and food
safety standards.
The Group interacts with our customers on a daily basis at multiple
levels. We work closely with our customers to develop, improve
and refine our products through collaborative projects, market
research and innovation workshops. We welcome feedback from
our customers in relation to changing consumer demands and
carry out ongoing work to apply this in a manner that helps our
customers win throughout the supply chain. During FY22 we
developed and launched a number of new product ranges in
response to existing and emerging trends.
Increasingly, our customers are calling on us to support them in the
area of sustainability and we are committed to changing how we
do business and finding solutions that can feed a growing
population without causing harm to the planet. We continue to
collaborate closely with customers. The nature of our business
means we are significantly influenced by our customers’ strategies
and behaviours. Our product footprinting trial has been successful
and showed us how to eco-score an entire category, rather than an
individual product. This has huge potential to give us the data we
need to make decisions on product formulations. We recognise
that we need deeper conversations with our customers in order to
make this happen, and we are preparing for those discussions with
detailed market insight and robust internal data.
Throughout FY22, the Board received regular
updates on customer initiatives and
performance,and information on customer
and market insights and developing trends.
This assists the Board in understanding our
customers, the opportunities and potential
issues.
Customer feedback was shared regularly with
the Board including the Group’s responses to
the key issues impacting customers, such as
COVID-19, inflation and the availability of raw
materials.
The Board also reviewed our strategy on
Healthy and Sustainable diets, an area that
has been a key focus for us this year, in
particular the use of data to help guide our
delivery plans.
Read more
Strategy on page 17
Board activities and engagement with stakeholders continued
63Strategic Report | Directors’ Report | Financial Statements
Why they matter How we engage
How the Board complements
engagement efforts
Suppliers
The Group
operates a
sophisticated
supply chain that
ensures we can
procure,
manufacture and
distribute products
every day. The
Board fully
appreciates that
ongoing dialogue
with our suppliers
has never been
more important as
the UK food
industry continues
to face challenges
in respect of labour
availability, inflation
and material
sourcing. The
Group’s interaction
with our suppliers
on a daily basis is
essential given the
level of ingredients
and packaging
purchases we
make.
From time to time, we hold detailed workshops with key suppliers
to drive strategies for mutual benefit to reassure suppliers of our
stability, share our strategy on growth and sustainability and request
support on ramp up volumes and quality.
The Group recognises that there is an increasing focus on
sustainability with our suppliers, particularly in the areas of
sustainable sourcing, and working sustainably with our suppliers is
a critical part of our strategy. We work with suppliers to source in
ways that seek to protect ecosystems, reduce emissions and
enhance livelihoods. We engage with suppliers on climate related
issues, and work with them to ensure they are sourcing responsibly.
The ethical treatment of workers in the supply chain is also an
increasing area of focus. The Group carries out rigorous ethical
assessments of our raw materials to identify areas within our supply
chains that are most at risk of modern slavery and human rights
abuses. The Group also encourages our suppliers to operate to the
same ethical standards that we employ ourselves as outlined in the
Ethical Code and Employment Standard’s Policy. Furthermore,
Greencore is a member of the Supplier Ethical Data Exchange
(‘Sedex’) and we require all new raw material suppliers to our
business to be Sedex registered.
In order to ensure we meet our commitment of being a business
that sources every ingredient from a fairer and more sustainable
supply chain by 2030, we will continue to work with our suppliers
to learn as much as we can about where our ingredients come
from and how they are produced.
The Board approved the Group’s sustainability
strategy which details our commitment to
ensuring that by 2030 we will be a business
that sources our priority ingredients from a
fairer and more sustainable supply chain.
During FY22, the Board received updates in
relation to our progress against our three
sustainability pillars of Sourcing with Integrity,
Making with Care and Feeding with Pride.
The Board also considered our key supplier
relationships, how we are engaging with
those suppliers, the supply chain risk
assessments, and ethical audits that are in
place.
During FY22, the Board approved the Group’s
FY21 Modern Slavery and Human Trafficking
Transparency Statement.
Read more
Sustainability on page 23
Consumers
Consumers rely on
us on a daily basis
to provide them
with tasty, quality
food products. The
Board recognises
the importance of
understanding
changing
consumer
behaviours and
preferences and is
committed to
delivering Great
Food to ensure
their needs are fully
met.
To support our customers and consumer demand, the Group
carries out a significant amount of analysis on the different food
categories which we produce, focusing on how the category is
performing and the major trends in that category from a consumer
and marketplace perspective. To supplement these analyses, we
carry out specific direct consumer research from time to time to
better understand the contribution we can make to society,
especially when improving livelihoods or making healthier food
choices.
Together, the Board and management
discuss and consider the main findings of
these analyses and research, particularly at
the Group’s annual strategy session.
Read more
Market trends on pages 14 and 15
64 Greencore Group plc Annual Report and Financial Statements 2022
Why they matter How we engage
How the Board complements
engagement efforts
Colleagues
Our colleagues are
at the centre of the
success of our
business. They
bring our culture to
life not only in the
workplace but also
in our
communities. As
our colleagues are
intrinsic to how we
do business, the
Board recognises
the importance of
ensuring they have
the opportunity to
realise their
potential and
progress in their
careers, whilst at
the same time
providing
a safe working
environment that
promotes inclusion
and diversity.
The Group undertakes a significant number of engagement activities
with colleagues each year. We conduct an annual, anonymous,
‘People at the Core’ engagement survey which provides insight on
many areas of the colleague experience and allows colleagues to
share their views, both positive and negative, about their workplace.
We have colleague forums in place across all of our sites and also a
cross functional colleague forum at Group level. These forums meet
regularly with senior leaders to discuss key topics and issues and
enable active two-way dialogue.
We have a number of communication channels that enable two-way
dialogue and generate positive engagement – these include
fortnightly leadership calls, quarterly executive briefings with frontline
leadership teams and regular site team briefs. All of these sessions
include the opportunity for colleagues to ask questions of our
leadership and Executive teams. In addition, managers are
encouraged to solicit feedback from their colleagues, both formally
and informally and we have a feedback mechanism built into our
performance and appraisal system that enables colleagues to give
and receive feedback from managers, peers and their team
members.
In January 2022 we launched a UK Share Incentive Plan giving all
colleagues the opportunity to become Greencore shareholders. An
Irish Shadow Award Scheme was also put in place for our colleagues
in Ireland.
Our peer-to-peer listening service, Talk2Us continues to offer
colleagues a confidential service that they can use for emotional and
social support. This is a part of a range of occupational measures
which we have in place to support our colleagues. In addition, we
communicate quarterly wellbeing topics covering a wide variety of
occupational health issues to support colleagues with their mental
health. These include online seminars and fact sheets. During FY22
we launched our own wellbeing centre as part of our colleague
benefit platform – this provides colleagues with a whole host of
resources to support their physical, mental and financial health.
During FY22 colleagues also received regular updates from the CEO
and Deputy CEO, with a focus on how the business is performing in
relation to our four differentiators of People at the Core,
Sustainability, Great Food and Excellence.
Our engagement with colleagues is further strengthened by our
Workforce Engagement Director.
People and Engagement updates are
provided as part of the regular CEO update to
the Board. In addition, during FY22, the
Workforce Engagement Director and the
Chief People Officer provided updates to the
Board on the progress of our colleague
engagement initiatives and the results of such
engagement during FY22. As part of this, the
Board considered the ongoing recruitment
challenges for the Group and how we plan to
further improve colleague engagement going
forward.
The Board also meets and listens to the views
of colleagues as part of its site visits.
Read more
Sustainability on pages 27 to 28
Our Key Performance Indicators on pages 36
and 37
Engaging our workforce on pages 66 and 67
Board activities and engagement with stakeholders continued
65Strategic Report | Directors’ Report | Financial Statements
Why they matter How we engage
How the Board complements
engagement efforts
Local
communities
Our business
depends on the
communities in
which we operate.
We see it as our
responsibility to
actively engage
with and support
our local
communities
however we can.
Food is at the heart
of our business and
we strongly believe
that everyone
should have access
to good food. Food
has a significant
impact on health,
wellbeing and
development, and
can help to build
friendlier, stronger,
healthier
communities. The
extremely
challenging current
economic situation
means this is now
more important
than ever.
Food donation continues to be a central focus for our community
engagement efforts. We work with a number of food redistribution
organisations – including FareShare, The Felix Project, The Bread
and Butter Thing, and the Trussell Trust – in order to ensure our
surplus food reaches those who need it. Through these
partnerships we are able to redistribute short shelf life, chilled,
frozen, and bulk products, as well as any surplus from new product
trials. In FY22, we redistributed the equivalent of 1.63 million meals.
In 2022, we passed a milestone of the redistribution of the
equivalent of four million meals to FareShare during our
partnership, which was established in 2010, and were awarded
FareShare’s “Leading Food Partner” status, celebrating businesses
who have shown commitment to diverting surplus food to
FareShare to provide meals for people in need.
This year has also seen us continue the Ingredients 4 Life
partnership in collaboration with City Hearts. The initiative teaches
cookery to survivors of modern slavery, equipping them with life
skills, self-confidence and providing a safe space in which to build
trust with others.
During FY22, the Board received regular
updates from the Head of Sustainability in
relation to the Group’s sustainability
programme, our Better Future Plan.
Read more
Sustainability on page 24
66 Greencore Group plc Annual Report and Financial Statements 2022
Board activities and engagement with stakeholders continued
Greencore recognises that our colleagues are intrinsic to how we do business. Active
engagement has never been more important than over the last year as we have adapted
to new ways of post COVID-working.
During FY22 and in order to adapt to these new ways of working the Group together with the
assistance of our Workforce Engagement Director, Sly Bailey implemented several colleague
engagement initiatives, including the embedding of flexible working policies and the
introduction of annual colleague awards.
Sly ensures that our colleagues’ voices are heard in the boardroom and their interests are
taken into consideration when making important decisions.
Hosted a listening group with our cross-functional
salaried colleague forum members and met with
direct and indirect colleagues including union
representatives
Participated in the Group’s first annual Shine Awards
– a recognition event attended by 400 colleagues
Carried out an ongoing review of the Group’s
recruitment, selection and training processes
Reported to the Board on a number of colleague
engagement areas including recognition, retention
and recruitment challenges and talent management
Received updates from the Chief People Officer in
relation to our purpose, colleague development
plans and inclusion and diversity strategy
Input to the plans for the 2022 People at the
Core survey
Activities of the Workforce
Engagement Director during FY22
Engaging our workforce
67Strategic Report | Directors’ Report | Financial Statements
Further embedding our flexible approach to work and
supporting colleagues in availing of this where possible
Continued focus on safety and wellbeing as priorities
Further strengthening our inclusion and diversity strategy
through further involvement of colleagues across the
business in our plans, continuing to deliver an annual
calendar of inclusion events and sharing our colleagues’
stories
Encouraging each site to have a community plan in place
and where appropriate, supporting colleagues who wish to
volunteer in their local communities
Maintaining high levels of communication with our
colleagues through video, face-to-face briefings, our
quarterly colleague magazine and a new employee app
Delivering on our sustainability strategy and engaging
colleagues on the local activity that supports its delivery
Our plans to further improve
colleague engagement
“Honest, open and invaluable
discussions take place in the forums;
colleagues are listened to and more
importantly, the business acts where
necessary. Resulting in a personal
sense of pride at being able to
provide a conduit voice between
the business and colleagues.”
Direct feedback from a colleague forum member
– Autumn 2022.
68 Greencore Group plc Annual Report and Financial Statements 2022
Division of responsibilities
As set out on pages 56 and 57 of this Annual Report and Financial Statements, the Board is
collectively responsible for planning, directing and controlling the activities of the Group. The
Board’s responsibilities are set out in a formal Matters Reserved to the Board Policy. The Board is
currently made up of ten Directors: two Executive Directors and eight Non-Executive Directors,
one of which is the Board Chair.
Time commitment
Each year, a schedule of regular meetings to be held in the following
calendar year is agreed with each of the Directors. A list of the
Directors’ attendance at scheduled meetings throughout the year can
be found on page 69. Additional Board meetings are held on an ad hoc
basis as required throughout the year. As set out on page 69, during
FY22, largely as a result of Board compositional changes, the Board
and each of the Committees held additional unscheduled meetings.
Board meetings normally take place at the Group’s head office in
Dublin as well as at the Group’s sites wherein tours of the local facilities
and/or customer visits are also incorporated into the Board agenda.
Board papers are circulated electronically to Directors in the week
preceding the Board meetings. The Board papers include the minutes
of the previous Board meetings held and, where appropriate,
Committee meetings. In addition, the Chair of each Committee
provides a verbal update on the relevant Committee meeting’s
proceedings at the following meeting of the Board.
If a Director is unable to attend a Board meeting, either in person or
remotely, he or she is encouraged to communicate his or her views
on any particular topic to the Board Chair, the CEO, the Senior
Independent Director or the Group Company Secretary, in advance
of the meeting. These views are then communicated at the Board
meeting on behalf of the absent Director.
Where appropriate, the Board also establishes sub-committees
on an ad hoc basis in order to deal with any additional items of
business which arise throughout the year. The membership of the
sub-committees will depend upon the purpose for which it was
established and will take into account the skills and expertise
necessary.
Board Chair
Gary Kennedy
The roles of the Board Chair and Chief Executive Officer (‘CEO’) are separate and distinct and there is a
clear division of responsibilities between the two roles. It is the role of the Board Chair to lead the Board
and ensure its overall effectiveness in directing the Company, whilst demonstrating objective judgement
and promoting a culture of openness and debate. As noted on page 52, Gary Kennedy was Executive
Chair for an interim period during FY22 pending the appointment of Dalton Philips as CEO.
Chief Executive Officer
Dalton Philips
Reporting to the Board Chair, the CEO has overall responsibility for running the business, driving
shareholder value and developing strong relationships with stakeholders.
Chief Financial Officer
Emma Hynes
The Chief Financial Officer (‘CFO’) is primarily responsible for managing the financial affairs of the
Company and optimising its financial performance. The CFO is also responsible for Internal Audit and risk
management as well as the Company’s tax affairs.
Non-Executive Directors
John Amaechi
Sly Bailey
Paul Drechsler
Linda Hickey
Gary Kennedy
Anne O’Leary
Helen Rose
Helen Weir
The role of a Non-Executive Director includes providing entrepreneurial leadership, developing strategy,
scrutinising management performance and challenging management proposals in a clear and
constructive manner. Non-Executive Directors also utilise their skills, expertise and experience to
contribute to the development of the Group as a whole. Information on the time commitment expected
from each Non-Executive Director is set out below.
Senior Independent
Director
Sly Bailey
In accordance with best practice and the 2018 UK Corporate Governance Code, the Board has appointed
a Non-Executive Director as the ‘Senior Independent Director’. It is the role of the Senior Independent
Director to act as a confidential sounding board for the Board Chair and to serve as an intermediary for the
other Directors when necessary. The Senior Independent Director is available to shareholders, and other
stakeholders, if they have concerns which they have been unable to resolve through the normal channels
of Board Chair, CEO or CFO, or indeed where such contact through the aforementioned channels is
deemed inappropriate. Terms of Reference for the Senior Independent Director are approved by the Board
and are reviewed annually. A copy of the Terms of Reference for the Senior Independent Director can be
found on the Group’s website, www.greencore.com.
Company Secretary
Damien Moynagh
The Group Company Secretary, whose appointment and removal is a matter for the Board as a whole, is
responsible for advising the Board on all governance matters and ensuring that Board policies and
procedures are followed. The Group Company Secretary is available to each of the Directors for any
advice or additional support they may require.
69Strategic Report | Directors’ Report | Financial Statements
The Board held 19 scheduled and unscheduled meetings during FY22. Attendance at scheduled Board and Committee meetings held during
the year was as follows:
Scheduled meeting attendance during FY22
Board
1
Audit and Risk
Committee
Nomination and
Governance
Committee
Remuneration
Committee
Scheduled meetings held during the year 8 4 3 4
John Amaechi 8/8 3/3
Sly Bailey 8/8 3/3
Patrick Coveney
2
3/4
Paul Drechsler 8/8 3/3 4/4
Gordon Hardie
4
5/5 2/2 1/1
Linda Hickey 8/8 4/4 4/4
Emma Hynes 8/8
Gary Kennedy 8/8 3/3 2/2
Anne O’Leary 8/8 4/4 2/2
Dalton Philips
3
0/0
Helen Rose 8/8 4/4
Helen Weir 8/8 4/4
1. The Board and each Committee held additional meetings throughout the year. Further details on additional Committee meetings are set out in the respective
Committee reports.
2. Patrick Coveney resigned as Executive Director and CEO on 30 March 2022.
3. Dalton Philips was appointed as Executive Director and CEO and Director on 26 September 2022.
4. Gordon Hardie stepped down from his role as Non-Executive Director on 3 May 2022.
Site visit policy
The Board has a formalised Site Visit Policy (‘Site Policy’) for Non-
Executive Directors. Under the Site Policy, Non-Executive Directors
visit certain sites, absent Executive Directors, in order to gain a
deeper understanding of the relevant site and how the culture and
values of the Group are instilled. During FY22, Non-Executive
Directors had the opportunity to visit the sites at Park Royal and
Northampton, after which an update on the visits and associated
learnings was shared with the Board.
External appointment policy
The Board has a formalised External Appointment Policy
(‘Appointment Policy’) for Directors. The Appointment Policy
stipulates that in advance of any new Board appointment, each
potential new Non-Executive Director will be provided with
information on the time commitment expected of him or her for his
or her role. The potential Non-Executive Director is required to
provide a detailed overview of all other directorships and other
significant commitments together with a broad indication of the time
commitment associated with such other directorship(s) or significant
commitment(s). The proposed appointee must also confirm that
they have sufficient time to dedicate to the role and meet their
requirements as a potential Non-Executive Director of the Company.
Furthermore, all incumbent Directors must seek the prior written
approval of the Board in advance of undertaking any additional
external appointments. Before approving any additional external
appointment, the Board shall consider the time commitment
required for the role. Each proposed external appointment shall be
reviewed independently.
In addition to the above, in accordance with the Appointment Policy,
Executive Directors shall not normally be permitted to take on more
than one non-executive directorship in a FTSE 100 company or
other significant appointment, however, each proposed external
appointment shall be considered independently. In the event that
permission is granted for an incumbent Director to take on a
significant external appointment, full details of the rationale for
permitting such an appointment shall be clearly explained in the
Company’s Annual Report and Financial Statements.
In December 2021, Gary Kennedy was appointed Chair of Norcros
plc and in June 2022, he was appointed Chair of Goodbody
Stockbrokers, a subsidiary of AIB Group plc. Having assessed the
nature of these roles and the associated time commitment, the Board
was satisfied that Gary had sufficient time to commit to his role as
Chair of Greencore, including for the period when he was Executive
Chair. The findings from the FY22 annual evaluation of the Board
Chair confirmed that Gary had demonstrated significant
commitment in discharging his duties, including having sufficient
time to dedicate to his role as Executive Chair.
In October 2022, Helen Weir was appointed as a Non-Executive
Director and Chair Designate of National Express Group PLC and will
become its Chair with effect from 1 January 2023. At the same time
Helen elected to rebalance her portfolio and will step down from the
Greencore Board with effect from 31 December 2022. The Board
was satisfied that this appointment would not impinge on Helen’s
duties as a Non-Executive Director and Chair of Audit and Risk
Committee.
The Appointment Policy was reviewed in FY22 and minor
amendments were approved by the Board.
70 Greencore Group plc Annual Report and Financial Statements 2022
40%60%
80%20%
10%
10%70%10%
Composition, succession and evaluation
Board composition and independence
The Board consists of eight Non-Executive Directors and two
Executive Directors, being the Chief Executive Officer (‘CEO’) and the
Chief Financial Officer. A number of Board changes occurred during
FY22 which are detailed in the section entitled ‘Board succession and
changes to the Board’. The biographical details of each of the
Directors, along with each of their individual dates of appointment,
are set out on pages 54 and 55.
Collectively and individually, the Directors are highly experienced
with a wide range of skills, understanding and expertise which
facilitates effective and entrepreneurial leadership. The Directors’
individual capabilities, as well as the effective processes and
structures in place, ensure effective leadership of the Group and that
the highest standards of corporate governance are preserved.
The Board comprises individuals from a varied range of backgrounds,
each of whom brings independent judgement on a number of key
issues for the Group, including strategy, performance, operations,
culture, sustainability, health and safety, data analytics, leadership,
ethics and regulation, diversity, finance, risk and IT. This range of
backgrounds and expertise is invaluable to both the Board and the
Group as it continues to rebuild its economic and operating model
effectively and sustainably with all stakeholders.
At least annually, the Nomination and Governance Committee
undertakes a detailed review of Board and Committee composition
to ensure that there is effective succession planning in place and that
the Board and the Committees are of the appropriate size, structure
and composition, with no one individual or small group having the
ability to dominate decision making. Given the current composition
of the Board, no undue reliance is placed on any individual Non-
Executive Director and the Board is satisfied that it is sufficiently
independent in order to operate effectively.
In accordance with Provision 11 of the 2018 UK Corporate
Governance Code (the ‘Code’), at least half of the Board, excluding
the Board Chair, is considered independent. In accordance with
Board policy, the independence of each Non-Executive Director is
considered by the Nomination and Governance Committee prior to
appointment and independence is reviewed annually by the Board
and reassessed as necessary. The Board has determined that each of
the Non-Executive Directors (excluding Gary Kennedy) is
independent in character and judgement and free from any business
or other relationship that could affect their judgement.
The Board has had due regard to various matters which might affect,
or appear to affect, the independence of certain of the directors and
determined that arising from Gary’s performance of executive duties
during his tenure as Executive Chair from 31 March 2022 to
25 September 2022, he was no longer considered independent
effective from 31 March 2022. In assessing the independence of Sly
Bailey, the Board considered her length of service on the Board,
which is in excess of nine years, and formed the view that Sly has
always and continues to exercise independent judgement as a
Non-Executive Director, Senior Independent Director and as Chair of
the Nomination and Governance Committee. The Board concurred
that Sly brings an independent mind-set to Board and Board
Committee meetings and expresses her views independently of any
other relationships.
Board succession and changes to the Board
The Board Chair, Gary Kennedy, who was an existing Non-Executive
Director at the time of his appointment as Board Chair in January
2013, has been on the Board since November 2008. The key
considerations on the continuation of Gary’s tenure as Board Chair
until no later than the 2023 Annual General Meeting (‘AGM’) were
disclosed in the Nomination and Governance Committee Report in
the FY21 Annual Report. On 15 September 2022, the Board
announced that following a comprehensive Board Chair search and
selection process, it had appointed Leslie Van de Walle as Non-
Executive Director and Chair Designate and Leslie will join the Board
on 1 December 2022. Leslie will succeed Gary as Board Chair at the
conclusion of the AGM in January 2023 at which point Gary will retire
as Board Chair and from the Board.
Gordon Hardie stepped down from his role as Non-Executive
Director on 3 May 2022. Gordon played an invaluable role in driving
the Board’s agenda, strategy and purpose. He also sat on the
Remuneration Committee.
On 8 September 2022, the Board announced that Helen Weir had
elected to step down from the Board with effect from 31 December
2022. Helen’s focus on Board and Audit and Risk Committee matters
have been invaluable to both the Board and the wider Group.
The Board announced on 21 October 2022 that Paul Drechsler had
decided not to stand for re-election at the 2023 AGM. Paul has
brought great insight to and made a valuable contribution to the
Board and as a member of the Remuneration Committee and
Nomination and Governance Committee during his tenure.
The Board together with the Nomination and Governance
Committee keeps the composition of the Board under review, and
will continue to actively consider Board renewal and succession
planning during FY23 to ensure that it remains strongly positioned to
support and lead the Group into the future.
Further information in relation to Non-Executive Director
refreshment and succession planning is contained in the Report of
the Nomination and Governance Committee on pages 72 to 75.
Board evaluation
The Code specifies that the Board should undertake a formal and
rigorous annual evaluation of its own performance and that of its
committees and individual directors, and that the Board should have
an externally facilitated evaluation at least once every three years.
Board diversity as at 30 September 2022
Female Male Executive Non-Executive <1 year 1-5 years 5-10 years >10 years
By gender By role By tenure
71Strategic Report | Directors’ Report | Financial Statements
The Board recognises the importance of ensuring sustained
improvement to and enhancement of its effectiveness and
undertakes various phases of evaluation to facilitate this, as well as a
review of its independence. Each year, the Board conducts an annual
internal evaluation of its performance, which is led by the Board
Chair, as well as a triennial external evaluation.
For FY21, the Board engaged Independent Audit Limited
(‘Independent Audit’), an independent external consultancy firm to
conduct an external evaluation of the Board and its Committees and
the process undertaken by Independent Audit was described in the
FY21 Annual Report. Independent Audit has no other connection to
the Group or individual Directors.
The report on the findings of the FY21 external evaluation (‘FY21
Report’) was presented to the Board in January 2022. The report
concluded that the Board is operating effectively, and Non-Executive
Directors have a wide range of relevant and complementary skills
and independent views. It was noted that the Board is collegiate and
well led and benefits from an efficient and supportive secretariat. The
Committees are similarly well led, working diligently and operating
effectively. The relationship with management is positive and
constructive. As well as recognising the Board’s strengths, the Report
also contained some recommendations to further enhance the
Board’s effectiveness, including in relation to:
• The process and timing for the CEO and Board Chair
appointments;
• The further refinement of the Group’s strategic priorities and
tracking progress;
• Optimisation of Board time, with more definition around the
Board’s priorities; and
• Creating further cohesion within and evolving the modus
operandi of the Board, following recent Board renewal and
refreshment during the pandemic.
The Board reviewed progress on the areas of focus which were
agreed as part of the FY21 external evaluation, which will continue to
be built upon during FY23.
During FY22, the Board undertook a review of its operation,
performance and effectiveness, which was conducted using an
online questionnaire via Independent Audit Limited’s ‘Thinking Board
Evaluator’ portal. The results of the evaluation, including Board
members’ comments in each area as well as focus areas to enhance
the Board’s effectiveness were reviewed by the Board, following
which the Board agreed to:
• Enhance its focus on strategic objectives and priorities and more
effective use of Board time aligned to this;
• Give further consideration as part of succession planning to
development and performance of the executive team; and
• Continue its focus on strengthening the Board’s culture and social
capital and further evolving the modus operandi of the Board.
The review of the operation, performance and effectiveness of the
Board Committees was also conducted in FY22 using an online
questionnaire via Independent Audit Limited’s ‘Thinking Board
Evaluator’ portal and a performance evaluation discussion was
included on the agenda for each of the Committees, supported by an
analysis of how each Committee was performing against key areas of
its terms of reference. Each of the Board Committees concluded it
was operating effectively.
The Board Chair held private discussions with each of the Non-
Executive Directors regarding individual director performance. The
outcome of these evaluations was positive noting that each Director
continues to contribute effectively.
The Senior Independent Director led the annual evaluation of the
Board Chair which involved the completion of a detailed
questionnaire by each Director on the Chair’s performance and
effectiveness for FY22. The Senior Independent Director discussed
the findings of the evaluation with the Board Chair and then
presented the findings, as well as proposed areas for further
enhancement, to the Board.
Inclusion and diversity
Inclusion and diversity continues to be an area of focus for the Board
and for the Group as a whole. During FY22, the Board was updated
on the Group’s inclusion and diversity strategy. Colleague inclusion
and diversity in the Group is addressed through policy, practices and
values which recognise that a productive and engaged workforce
comprises different work styles, cultures, generations, genders and
ethnic backgrounds. The Board recognises the benefits of inclusion
and diversity and believes that having a diverse Board enables wider
perspectives which facilitates more effective discussions and decision
making. The Board is committed to ensuring that its composition is
diverse and balanced.
All Board appointments are made on merit against objective criteria,
in the context of the overall balance of skills, experience, expertise
and backgrounds that the Board needs to remain effective. The
Group’s Board Diversity Policy (available on www.greencore.com)
sets out the approach taken to ensure Board appointments support
and embrace difference and nurture an inclusive Board culture. In
this context, diversity not only encompasses gender, ethnic and
social ambitions/diversities, but also extends further to differing
experience, background, intellectual and personal styles. This ethos is
integral to the Nomination and Governance Committee’s approach
when carrying out its duty of reviewing the Board composition,
(including when considering new Board candidates) and as part of
the succession process for the Board Chair and CEO during FY22.
The Board is fully supportive of the recommendations of the
Hampton-Alexander Review and the Parker Review in respect of both
gender and ethnic diversity and aims to maintain Board
representation of at least 33% gender diversity. Together with the
Nomination and Governance Committee, the Board is committed to
ensuring that diversity forms a key element of Board refreshment and
succession planning.
The Nomination and Governance Committee reviews the Board
Diversity Policy annually, monitoring progress on diversity and, where
appropriate, reports on the process used in relation to any Board
appointments in the Group’s Annual Report and Financial Statements.
Detailed information in relation to the Board appointment process for
FY22 is set out on page 73.
72 Greencore Group plc Annual Report and Financial Statements 2022
Report of the Nomination and Governance Committee
“During FY22, we made significant
progress on the Board Succession Plan,
with the appointment of our new CEO
and the Chair Designate.”
Dear Shareholder,
As Chair of the Nomination and Governance
Committee (the ‘Committee’), it is my
pleasure to present the Committee’s report
for the year ended 30 September 2022
which sets out the Committee’s main areas
of focus over the past financial year.
The year under review saw significant
change in Board composition. In November
2021, Patrick Coveney informed the Board
that he would be stepping down as Executive
Director and Chief Executive Officer (‘CEO’)
on 30 March 2022.
The Committee initiated a robust process to
recruit his successor, led by our Board Chair,
Gary Kennedy. Following a comprehensive
search and selection process, on 13 May
2022, the Company announced the
appointment of Dalton Philips as Executive
Director and CEO effective 26 September
2022.
The Committee also continued to build on
its succession planning work of recent years,
most notably on the Board Chair selection
process, which culminated in the
announcement on 15 September 2022 of the
appointment of Leslie Van de Walle as
Non-Executive Director and Chair Designate
effective 1 December 2022. Both of these
appointments mark strong progress in our
Board Succession Plan.
The search processes for the CEO and Board
Chair were supported by MWM Consulting
who were engaged as the external search
agents. MWM Consulting has no connection
with the Group, or any individual director,
other than its work as advisors to the
Committee. Having supported the
recruitment of Non-Executive Directors in
FY20 and FY21, they had an understanding of
the skills and experience of existing
Directors, and were well placed to support
the Board in ensuring due consideration was
given to each appointment’s impact on the
composition of the Board as a whole. The
Committee is satisfied that the new Board
members enhance the overall skills profile
given the strategic direction of the Group
and bring a broad range of complementary
skills, knowledge and experience to the
Board.
Activities of the Committee
FY22 was another busy year for the
Committee as we continued our Board Chair
succession process and commenced our
CEO succession process.
During the year, in addition to the three
scheduled meetings, the Committee also
held ten unscheduled meetings. All
Committee members attended all scheduled
and unscheduled meetings, except for the
Board Chair who did not attend four
unscheduled meetings where the sole
purpose of the meeting was to consider
Board Chair succession.
Role of the Committee
The Committee’s responsibilities are outlined
in its Terms of Reference, which can be
found at www.greencore.com. The
Committee reviews and refers any proposed
amendments to its Terms of Reference to the
Board for approval annually. The Terms of
Reference were last updated in July 2022.
Membership of the Committee
The Committee currently consists of four
members: three Non-Executive Directors,
Sly Bailey, John Amaechi and Paul Drechsler,
who are considered to be independent and
the Board Chair, Gary Kennedy. Further
details on the Committee members’ skills,
qualifications, experience and expertise are
set out on pages 54 and 55. No Director
attends discussions relating to their own
appointment. In addition to members of the
Committee, the CEO attends meetings of the
Committee when it is considered appropriate
for him to do so.
Committee effectiveness
As noted on page 71, Independent Audit
Limited (‘Independent Audit’), an external
consultancy firm, was engaged to conduct
the FY21 external evaluation of the Board
and Board Committees. The FY22 review
of the operation, performance and
effectiveness of the Committee was
conducted using an online questionnaire
via Independent Audit’s ‘Thinking Board
Evaluator’ portal and a performance
evaluation discussion was included on the
agenda for the Committee at its September
2022 meeting, supported by an analysis of
how the Committee was performing against
key areas of its Terms of Reference. This
followed Independent Audit’s external
evaluation of the Committee for FY21 which
was completed in January 2022. Both reviews
Membership of the Committee
Committee members Date appointed
Attendance at
scheduled Committee
meetings during FY22
Sly Bailey 28 January 2014 (Appointed Committee Chair
on 28 January 2020)
3/3
John Amaechi 1 February 2021 3/3
Paul Drechsler 1 February 2021 3/3
Gary Kennedy 26 July 2012 3/3
73Strategic Report | Directors’ Report | Financial Statements
confirmed that the Committee continues to
operate effectively and efficiently and has
the skills and expertise required in order to
perform its role appropriately. In FY23, an area
of particular focus for the Committee is senior
management succession planning and
development, following the changes to
the Group Executive Team and to the
organisational model in FY22.
Board succession planning and
Board appointments
The Committee is responsible for ensuring
that the Company has a formal, rigorous and
transparent process in place for Board
appointments. Prior to making new
appointments to the Board, a role profile is
prepared on the basis of criteria laid down by
the Committee. This is preceded by an
evaluation of the skills, knowledge,
experience and diversity on the Board as well
as the anticipated time commitment for the
role. This process was followed by the
Committee as part of the Board Chair and
CEO succession processes and taking into
account the requirement for
complementarity between these roles.
Recommendations to the Board in respect of
the appointment of any given candidate,
follows a comprehensive due diligence and
rigorous assessment process, including
candidate interviews, which is undertaken to
enable the Committee to satisfy itself as to
the candidate’s skills, experience and
independence and their ability to devote
sufficient time to the role.
Letters of appointment of each of the
Non-Executive Directors detail the terms of
appointment and Directors’ responsibilities,
and also stipulate the time commitment
required from Directors. Copies of Directors’
letters of appointment are available to
shareholders for inspection at the Annual
General Meeting (‘AGM’) and at the
Company’s registered office during normal
office hours.
The Company’s Articles of Association
provide that at every AGM, each Director
shall retire and seek re-election. Under its
Terms of Reference, the Committee makes
recommendations to the Board concerning
the annual re-election of Directors. New
Directors may be appointed by the Board but
are subject to election at the first AGM after
their appointment. Both Dalton Philips and
Leslie Van de Walle will stand for election at
the 2023 AGM.
The Committee together with the Board
keeps the composition of the Board under
review, and will continue to consider Board
renewal and succession planning during
FY23 to ensure that it remains strongly
positioned to support and lead the Group
into the future.
Our Non-Executive Directors’ tenure on our
Board as at 30 September 2022 is as follows:
Length of Service
Number of
Non-Executive
Directors
Less than 1 year 0
Between 1 year and 3 years 5
1
Between 3 years and 5 years 1
2
Between 5 years and 10 years 1
3
Over 10 years 1
4
1. John Amaechi, Paul Drechsler, Linda Hickey, Anne
O’Leary and Helen Weir.
2. Helen Rose.
3. Sly Bailey.
4. Gary Kennedy.
Board succession planning and
Board Committees compositional
changes during FY22
The Committee plays a vital role in
promoting effective Board and leadership
succession, making sure it is fully aligned to
the Group’s strategy.
During FY22, the Committee reviewed the
size, structure and composition of the Board
Committees and Board succession planning.
Considerations included reviewing Director
tenure on the Board and the tenure of the
Sustainability Engagement Director, Senior
Independent Director, and Workforce
Engagement Director (with consideration of
the latter two roles, which are currently held
by me, being undertaken in my absence) as
well as Board Committees. The Committee
also oversaw the search processes for CEO
and Board Chair succession, both of which
were concluded in FY22. During the year
the Committee made recommendations to
the Board in respect of refreshing Board
Committee composition, taking into account
the requirements of the Committees’ Terms
of Reference, as well as the provisions of
the 2018 UK Corporate Governance Code
(the ‘Code’).
Provision 32 of the Code provides that the
“The board should establish a remuneration
committee of independent non-executive
directors, with a minimum membership of
three, or in the case of smaller companies,
two. In addition, the chair of the board can
only be a member if they were independent
on appointment and cannot chair the
committee”. As noted on page 70, the Board
considered Gary’s independence, and also as
noted below, his membership of the
Remuneration Committee prior to his
transition to the role of Executive Chair on
31 March 2022. Having determined that Gary
would no longer be considered independent
from that date, the Board concluded it was in
the Group’s best interests that he should
remain a member of the Remuneration
Committee during the CEO succession
process and consequently Greencore was
not compliant with this code provision from
31 March 2022 until 21 June 2022. On
21 June 2022, Gary Kennedy retired and
Anne O’Leary was appointed as a member
of the Remuneration Committee.
On 3 May 2022, Gordon Hardie stepped
down from the Board, and as a member of
the Remuneration Committee and the Audit
and Risk Committee. No changes were made
to the composition of the Nomination and
Governance Committee during FY22.
Executive succession planning
Executive succession planning, including
contingency planning for the CEO role, was
considered by the Committee on an ongoing
basis throughout the year, both prior to and
subsequent to the announcement on
25 November 2021 of Patrick Coveney’s
resignation as Executive Director and CEO
effective from 30 March 2022.
The search process for our new CEO, which
was led by the Board Chair, commenced in
November 2021. On 13 May 2022, following
a comprehensive search and rigorous
selection process, the Board announced the
appointment of Dalton Philips as Executive
Director and CEO and Dalton joined
Greencore on 26 September 2022. In
addition to his outstanding knowledge of the
grocery sector, Dalton has a strong track
record of leading dynamic consumer-related
businesses and we are confident he will
successfully lead Greencore into the next
phase of its journey.
Following Patrick’s resignation
announcement, the Committee
recommended the expansion of Kevin
Moore’s role to that of Deputy Chief
Executive Officer, as supported by the
Board’s contingency plan. This, together with
the appointment of Gary Kennedy to the role
of Executive Chair from 31 March 2022,
along with Emma Hynes as CFO, provided
continuity of leadership and an effective
management structure during the transition
period.
Board Chair succession planning
Work which had commenced on our Board
Chair search and selection process during
FY21 continued during FY22. The search was
led by me as Senior Independent Director
and overseen by the Committee with
support from the Board Chair Selection
Committee.
74 Greencore Group plc Annual Report and Financial Statements 2022
Report of the Nomination and Governance Committee continued
Following a comprehensive search process,
the Board Chair Selection Committee,
whose members were the Nomination and
Governance Committee members (excluding
the Board Chair) and Non-Executive Director
Linda Hickey, considered the shortlisted
candidates’ skills, experience, independence,
and their ability to commit sufficient time to
the role, taking into account the collective
skills and experience of, as well as diversity
on, the Board. At the conclusion of the
process, the Nomination and Governance
Committee recommended the final
preferred candidate to the Board and on
15 September 2022, the Board announced
the appointment of Leslie Van de Walle as
Non-Executive Director and Chair Designate,
effective on 1 December 2022.
As noted on page 52, Provision 19 of the
Code includes a provision whereby the chair
“should not remain in post beyond nine years
from the date of their first appointment to
the board.” Greencore currently deviates
Directorship experience
1
6
4
2
7
4
2
5
4
5
2
5
Listed Company Chair Experience
Non-Executive Director of Listed Company Experience
Executive Director of Listed Company Experience
Large Private Company Chair Experience
Non-Executive Director of Private Company Experience
Senior Independent Director Experience
Audit and/or Risk Committee Chair Experience
Audit and/or Risk Committee Membership Experience
Remuneration Committee Chair Experience
Remuneration Committee Membership Experience
Nomination and/or Governance Committee Chair Experience
Nomination and/or Governance Committee Membership Experience
General experience
6
7
8
5
8
3
4
1
4
1
1
5
6
International
Corporate Development/M&A
Scaling up
Retail/Food
Operational
Qualified Accountant (financial expertise)
IT/Technology
HR
Consumer Insight
Scale Robotics Transformation
Legal
Experience Leading Diversity Initiatives
Transformation
from this provision, however, the Code
further outlines that “to facilitate effective
succession planning and the development of
a diverse board, this period can be extended
for a limited time, particularly in those cases
where the chair was an existing non-
executive director on appointment”. Now
that the appointment of Gary’s successor as
Board Chair has been announced, Gary will
retire as Board Chair and Non-Executive
Director at the AGM, to be held in January
2023 and Leslie will succeed Gary as Board
Chair at the conclusion of the AGM.
As noted on page 52, Provision 9 of the Code
provides that the “the role of chief executive
and chair should not be exercised by the
same person”. On 25 November 2021, the
Group announced that Patrick Coveney was
stepping down from his position as CEO and
Executive Director with effect from 30 March
2022. In line with the Board’s existing
contingency plan and pending the
appointment of a new CEO, Gary took a
more active role in the business and
assumed the role of Executive Chair from
31 March 2022. Greencore therefore
deviated from Provision 9 of the Code from
31 March 2022 until 26 September 2022, at
which point Dalton Philips joined the Board
as CEO and Executive Director and Gary
Kennedy reverted to his role as Non-
Executive Board Chair.
Company Secretary
Damien Moynagh was appointed Group
Company Secretary on 7 November 2022,
and replaces Jolene Gacquin, who resigned
from her position as Group Company
Secretary and departed the Group on
9 September 2022. In the interim period
from 9 September 2022 until 7 November
2022 Emma Hynes served as Group
Company Secretary.
75Strategic Report | Directors’ Report | Financial Statements
Directors’ induction and training
A considerable amount of time is dedicated
to the onboarding and induction of new
Directors and the Committee ensures that all
newly appointed Directors undergo a formal,
comprehensive and tailored induction
programme.
Each of the newly appointed Non-Executive
Directors also engages regularly with the
Board Chair and the CEO following
appointment to gain a further understanding
of the business. As part of their induction
programme, they are provided with detailed
information in relation to the Group’s history
and structure. They also receive data and
analysis on the Group’s people, sustainability,
commercial, strategic, operational, financial,
governance, risk management and capital
markets agenda.
There is also the opportunity for Non-
Executive Directors to visit our sites,
including as part of their initial onboarding,
in order to gain a deeper understanding
of the business.
Directors receive ongoing training and
development and the Board and Committees
receive regular updates and briefings on
relevant legal, environmental, social,
governance, regulatory and financial
developments, including from the external
auditor and external advisors.
Corporate governance developments
The Code continues to apply to the Group.
The Committee has developed a number of
policies and processes in order to enhance
corporate governance standards, each of
which were approved by the Board,
following recommendations from the
Committee. During FY22, each of the
policies were reviewed by the Committee,
updated where appropriate, and approved by
the Board.
Throughout FY22, we have continued to
keep up to date through ensuring agendas
were reflective of current issues and
information provided to members was
current and timely.
Inclusion and diversity
Recognising the significant benefits of
inclusion and diversity to Company strategy,
both the Board and the Committee are
committed to ensuring that they remain a
key area of focus for the Board and the
Group. In the year under review, the
Committee undertook a review of the Board
Diversity Policy to ensure that it remained
appropriate and no changes were
considered necessary. The Board Diversity
Policy is available under the Governance
section of our website, www.greencore.com.
We recruit talented Board members, who
have the appropriate mix of skills, capabilities
and market knowledge to ensure the Board
is effective. When recruiting, we look across
sectors and we require diversity on our
candidate shortlists. With 60% female
representation currently on the Board, we
have exceeded the recommendations of the
Hampton-Alexander Review, and are already
in compliance with the recommendations
of the Parker Review. In addition, the March
2022 Parker Review Committee update
confirmed that we met their Board ethnic
diversity recommendations. Diversity will
remain a key area of focus for the Board.
The Committee is proud of its progress in
this area and is committed to maintaining
balanced representation on the Board.
This is of fundamental importance as we
embed our recently developed inclusion and
diversity strategy across the Group.
The Group gender diversity breakdown,
which is set out on page 111, shows the
gender mix across the organisation. During
the year, the Board was updated in relation to
the current status and plans to improve the
Group’s inclusion and diversity profile. In
addition, progress on the Group’s inclusion
and diversity strategy, which sets the Group’s
aspirations was reviewed during the year. The
Committee will continue to monitor closely
the Group’s wider diversity initiatives and
progress against plans over the course of
FY23.
Overall it has been a year of good progress
and I would like to express my gratitude to
my colleagues on the Committee for their
ongoing dedication and commitment to
both the Board and the Committee.
Sly Bailey
On behalf of the Nomination and
Governance Committee
28 November 2022
76 Greencore Group plc Annual Report and Financial Statements 2022
Report of the Audit and Risk Committee
Dear Shareholder,
On behalf of the Audit and Risk Committee
(the ‘Committee’) and the Board, I am
pleased to present the Report of the
Committee for the year ended 30 September
2022 (‘FY22’) which is my final full year
serving as Committee Chair and as a Board
member. This report outlines how the
Committee discharged the responsibilities
delegated to it by the Board over the course
of FY22 and the key matters it considered in
doing so.
The Committee continued to focus on its
core areas of responsibility, namely
protecting the interests of the Group, our
shareholders and our stakeholder base
through ensuring the integrity of the Group’s
financial information, audit quality and the
effectiveness of internal controls, the risk
management process, and transparent
financial reporting throughout the year.
Role of the Committee
The Committee’s role, authority, duties and
scope are set out in its Terms of Reference
which are available on the Governance section
of our website, www.greencore.com. The
Committee reviews the Terms of Reference
annually and any amendments are presented
to the Board for approval. The Terms of
Reference were last reviewed in May 2022.
Membership of the Committee
Committee members Date appointed
Attendance at
scheduled Committee
meetings during FY22
Helen Weir 1 February 2020 (Appointed Committee Chair
on 26 January 2021)
4/4
Linda Hickey 1 February 2021 4/4
Anne O’Leary 1 February 2021 4/4
Helen Rose 11 April 2018 4/4
Gordon Hardie (Appointed 26 January 2021 and stepped down
on 3 May 2022)
2/2
Membership of the Committee
The Committee is currently comprised of
four Non-Executive Directors, all of whom
are considered by the Board to be
independent. As a whole, the Committee
possesses the skills, competence and relevant
financial and commercial experience across
a variety of industries, including the
consumer goods and food sectors, to enable
it to effectively discharge its responsibilities.
Helen Rose and I both have recent and
relevant financial experience, whilst all
Committee members are financially literate.
Having been involved in risk management in
TSB Banking Group plc, Helen Rose also has
specific risk expertise.
Gordon Hardie stepped down from the
Committee and the Board on 3 May 2022.
Iwould like to take this opportunity to thank
him for his dedication and contribution to
the Committee during his tenure.
Further details on the Committee members’
experience and qualifications can be found
in our biographical details as set out on
pages 54 and 55.
In accordance with the Committee’s Terms
of Reference, the Group Company Secretary
or their nominee acts as Secretary to the
Committee.
Committee meetings
During FY22, the Committee held six
meetings (four scheduled and two
unscheduled meetings), primarily to review
the control framework and risk and
assurance system. All Committee members
attended all scheduled and unscheduled
meetings which they were eligible to attend.
The meetings of the Committee are
generally scheduled to take place in advance
of Board meetings. This allows me to provide
the Board with a detailed update on the key
items discussed at the Committee meetings.
The Board also receives copies of the
minutes of the Committee meetings.
During FY22, regular attendees at Committee
meetings included the Chief Executive Officer
(‘CEO’) and, subsequent to his resignation, the
Executive Chair and Deputy CEO, as well as
the Chief Financial Officer (‘CFO’), the Group
Financial Controller, the Head of Risk
Management until his departure and
subsequently the Director of Internal Audit
and Risk, the Head of Legal and Compliance
and the IT Director. Representatives of the
external auditor, Deloitte Ireland LLP
(‘Deloitte’), also attended each scheduled
meeting. In addition, other individuals from
the Group attended Committee meetings and
provided the Committee with updates on
certain key areas of the business, as
requested, including the Chief People Officer
and Chief Operating Officer.
In my capacity as Chair of the Committee,
I am available to all Board members to
discuss any audit or risk related issues they
may have, either on a collective or individual
basis. During FY22, I met with the external
auditor and the Head of Risk Management/
Director of Internal Audit and Risk,
without management, on a regular basis.
The Director of Internal Audit and Risk,
whose appointment or removal is subject
to Committee approval, has direct access
“During FY22, the Committee continued
tofocus on the effectiveness of internal
controls, including IT processes and
controls, and strengthening the oversight
provided by the Internal Audit function.”
77Strategic Report | Directors’ Report | Financial Statements
to both myself and the Board. During
theyear the Committee approved the
appointment of the Director of Internal
Auditand Risk following the departure of the
Head of Risk Management from the Group.
Risk management and
internal controls
The Committee supports the Board in its duties to review and monitor, on an ongoing basis, the effectiveness of
the Group’s system of internal control and risk management.
In order to fulfill these duties, during the year under review, the Committee:
• Received regular reports from the Risk Oversight Committee (‘ROC’), chaired by the CFO. The ROC was
established to support the Committee with ongoing monitoring of the risk management process;
• Monitored progress on the action plan to implement the recommendations made by KPMG following their external
quality assessment of the Risk Management Group, including the creation of separate Internal Audit and Risk
Management functions both of which report to the newly created position of Director of Internal Audit and Risk;
• Formally met with the Head of Risk Management/Director of Internal Audit and Risk who provided reports on
the key audit findings, themes and key issues noted throughout the reviews and progress on closure of actions
including any overdue actions resulting from business process and control reviews;
• Received progress updates on the FY22 Internal Audit Plan which covered, amongst other areas, business
continuity planning, financial controls, production performance, stock management and HR practices as well as
standard operational reviews;
• Reviewed and approved the FY23 Internal Audit Plan which sets out the planned activities for the year ahead, as
well as Internal Audit staffing and resources. The FY23 plan is informed by an assessment of the risk profile of
the different areas of the business;
• Agreed the Risk Management Framework and reviewed the Group Risk Appetite Statement;
• Received presentations on principal and emerging risks and discussed, with senior management, the material
internal controls and assurance processes which exist to mitigate and manage these risks in accordance with
the Board’s risk appetite;
• Considered the impact of the IT security incident as detailed below on the internal control environment,
undertook a deep dive into cyber risk and reviewed the controls that have been put in place by management to
manage and mitigate cyber risk;
• Reviewed the risk assurance process for food safety and health and safety;
• Undertook deep dives on labour and people risk and discussed the effectiveness of the risk assurance processes
and internal controls to mitigate and manage these risks; and
• Reviewed the Group’s Treasury Policy.
In light of the above and the work performed in relation to the IT security incident, which is detailed below, the
Committee continues to be satisfied that the Group’s internal control environment remains appropriate and
effective and has reported this opinion to the Board.
IT security incident
In FY22, the Group experienced an IT security incident that resulted in temporary unauthorised access to part of the
Group’s IT systems. From a financial reporting perspective, while the IT security incident did lead to some
temporary disruption to regular procedures, the Group’s internal reporting procedures continued with significant
effort made by the Group’s finance teams to ensure that there were no gaps in the recording of transactions.
The Committee was updated on the impact of the incident on the business and the early mitigating actions taken
to minimise impact and/or risk in the scheduled January 2022 meeting. Further updates were provided to the
Committee in March 2022 and May 2022. These included recommendations from external advisors on the
appropriate remediation activities as part of response and recovery following the incident. In the September 2022
Committee meeting, the Committee received updates on IT security processes that have been implemented as part
of the recovery process and residual IT security risks as, in common with other companies, the risk of future IT
security incidents remains one of the Group’s principal risks.
The updates provided to the Committee during the year and the actions taken by management in containing and
responding to the IT security incident, provided the Committee with assurance that the Group’s internal control
framework, including IT processes and controls, remained effective for FY22.
How the Committee has discharged
its responsibilities during FY22
Key areas of focus
The Committee has an extensive agenda
which focuses on monitoring the
effectiveness of risk management within the
Group as well as ensuring the integrity of the
Group’s financial reporting, that any
judgements made are appropriate, that the
external auditor is effective in its role and that
the Group has an effective internal control
framework. During FY22, the work of the
Committee principally fell under the
following key areas:
78 Greencore Group plc Annual Report and Financial Statements 2022
Report of the Audit and Risk Committee continued
Financial reporting
The Committee reviewed the form and content of the Annual Report and Financial Statements, as well as the half
year and full year results statements including the key estimates and judgements made by management in the
preparation of the Financial Statements.
During FY22, the Committee:
• Considered the FY22 Interim Results Statement and the FY21 Full Year Financial Statements. The Committee
reviewed and challenged management on the appropriateness of estimates and judgements made in the
preparation of the Financial Statements;
• Reviewed the judgements made with respect to which items should be disclosed separately as exceptional
items in the Financial Statements to confirm that these were in line with policy. In FY22, the reorganisation costs
for the Group’s Better Greencore programme and professional fees in relation to the pension restructure have
been disclosed separately as exceptional items in line with the Group’s accounting policy;
• Considered the Group’s tax compliance and tax strategy;
• Reviewed papers on the Group’s significant accounting judgements and estimates;
• Reviewed the Group’s accounting policies and management’s assessment of the impact of IFRS amendments
effective during FY22 on the financial statements and the potential impact of upcoming amendments to IFRS on
the Group; and
• Received updates regarding the impact of the IT security incident on financial reporting procedures.
External audit
The Committee provided oversight in relation to the external auditor’s relationship with the Group including
agreeing the external auditor’s terms of engagement and monitoring the independence and objectivity of the
external auditor, Deloitte. The remuneration of the external auditor was considered and an increase in fee reflective
of cost inflation in the professional services market was approved by the Committee.
In November 2021, the Committee also discussed the FY21 external auditor’s report to the Committee with
Deloitte, considering their findings, conclusions and the recommendations arising from their work. They also
reviewed and agreed the Letter of Representation.
Progress on the implementation of the recommendations from the external auditor and updates to internal
controls formed part of the management reports to the Committee during FY22.
The Committee met with Deloitte in January, May and September 2022 to consider and challenge the scope of the
annual FY22 external audit plan, which was set taking into consideration the nature of risks to, and the strategy of,
the Group.
Directors’ compliance
statement
The Committee reviewed the appropriateness of the Directors’ Compliance Policy Statement and also considered
reports from senior management in respect of the compliance structures and arrangements in place for the year
under review to ensure the Company’s material compliance with its relevant obligations. Following the review, as
well as a review of the report from the Internal Audit and Risk Management function in respect of the compliance
structures and arrangements, the Committee confirmed to the Board that, in its opinion, the Company is in
material compliance with its relevant obligations.
Going concern and
viability statement
The Committee’s role as delegated by the Board, is to carry out an assessment of the adoption of the going
concern basis of accounting and report to the Board accordingly. The Committee challenged and scrutinised
management’s detailed assessment of the Group’s going concern model, including examining and challenging the
underlying assumptions and analysis presented in support of the going concern statement. Financial models based
on a number of scenarios which included inflation, recession and supply side disruption were considered by the
Committee along with an assessment of the borrowing facilities available to the Group. Further information is set
out below and on pages 44 and 45.
For the purpose of the viability statement, the Committee’s role, as delegated by the Board, is to review the
underlying processes and key assumptions underpinning the viability statement and report to the Board
accordingly. The Committee reviewed management’s work on assessing the Group’s current position and potential
risks facing the Group including the results of the financial modelling of the principal risks identified as having the
greatest potential impact on the Group’s viability and the Group’s ability to meet its liabilities in the medium term,
as well as the appropriateness of the Group’s choice of a three year assessment period. Following this review, the
Committee was satisfied that management had conducted a robust assessment of the Group’s emerging and
principal risks and recommended to the Board that it approve the viability statement, as set out on page 45.
79Strategic Report | Directors’ Report | Financial Statements
Monitoring the integrity of the FY22 Financial Statements including significant judgements
• We reviewed the appropriateness of Group accounting principles, practices and policies and monitored changes to, and compliance with,
accounting standards;
• We reviewed the half year and full year results statements for FY22. Before recommending their release to the Board, we compared the
results to management accounts and budgets, focusing on key areas of judgement and also discussed the statements with the external
auditor; and
• We reviewed, prior to making recommendations to the Board, the Annual Report and Financial Statements for the year ended
30 September 2022.
In undertaking our review, we discussed with management and the external auditor the critical accounting policies and judgements that had
been applied. These were:
Going concern
The Committee reviewed the Group’s assessment of going concern which is for a period of 18 months from the
year end date. Management presented a number of stress scenarios to the Committee which considered the
estimated potential impact of inflation, recession and supply side disruption, along with the Group’s own mitigating
actions on costs and cashflows. In assessing going concern, the Committee also reviewed the steps taken by
management to ensure adequate liquidity is available to the Group and also covenant requirements. The
Committee concluded that it was appropriate to recommend the adoption of the going concern basis in preparing
the Financial Statements.
Goodwill
The Group had goodwill of £449.4m at 30 September 2022 as set out in Note 12 to the Group Financial Statements.
Management’s judgement is required in testing the carrying value of goodwill for impairment when comparing the
value in use of the cash generating unit (‘CGU’) to the carrying value. The value in use was calculated using
cashflow projections based on the Group’s approved budget and strategic plans which were then projected out to
perpetuity. The Committee considered the methodology applied and the key assumptions used in the assessment,
which included future profitability, terminal growth and discount rates. The Committee was satisfied that there was
sufficient headroom and that no impairment was required.
Accounting for
exceptional items
The Group accounting policy sets out the items that the Group believes it is appropriate to disclose separately as
exceptional items. Management’s judgement on whether an item should be classified as exceptional are presented
to the Committee as part of the papers provided to the Committee on significant judgements and estimates. The
Committee also challenges management on items that may not have been classified as exceptional. The
Committee was satisfied that it was appropriate to classify the costs associated with the Better Greencore
programme and the pension restructuring costs as exceptional items in the FY22 Financial Statements.
Taxation
Provisions for current and deferred taxation require judgement including where the treatment of certain items may
be the subject of debate with tax authorities. The Committee received updates relating to both the interim and
FY22 accounting judgements and estimates around the Group’s tax profile and provisions. The Committee
considered the appropriateness of the provisions and the supporting information provided by management. The
Committee was satisfied that the accounting and disclosures relating to provisions for taxation are appropriate in
the FY22 Financial Statements.
Provisions
The Group has provisions for lease obligations, remediation and closure and other provisions for potential litigation
and warranty claims. In FY22, the Group also included a provision for costs relating to the Better Greencore
programme. Following discussions with management, the Committee was satisfied with the completeness and
classification of the provisions for FY22.
Greencore Group plc
investment in
subsidiaries
(Company only)
The Company has an investment in subsidiary undertakings of £766.6m. Management performed a review of the
recoverability of the Company’s investment in subsidiaries by performing a bottom-up review of the investments
throughout the Group to determine if an impairment was required. On the basis of this analysis, the Committee
was satisfied that an impairment of the Company’s investment in subsidiaries was not required.
80 Greencore Group plc Annual Report and Financial Statements 2022
Report of the Audit and Risk Committee continued
Fair, balanced and understandable
assessment
Each year, in line with Provision 25 of the 2018
UK Corporate Governance Code (the ‘Code’)
and the Committee’s Terms of Reference,
the Committee is asked by the Board to
consider whether or not, in its opinion, the
Annual Report and Financial Statements are
fair, balanced and understandable (‘FBU’) and
whether or not it provides the information
necessary for shareholders to assess the
Group’s position and performance, business
model and strategy.
There is an established process in place to
support the Committee in making this
assessment. The main elements of this
process are:
• An internal FBU Group comprising senior
management from Finance, Legal and
Transformation considered the draft FY22
Annual Report and Financial Statements
focusing on a number of ‘key areas of
focus’ as outlined below;
• In advance of its November 2022
meeting, the Committee received a
near-final draft of the FY22 Annual Report
and Financial Statements, together with
the list of areas to focus on;
• At the November meeting, the FBU Group
reported its observations and
conclusions, including supporting
evidence, to the Committee; and
• The Committee discussed the findings of
the FBU Group, as well as the
observations of individual Committee
members, and the external auditor.
Following its review this year, the Committee
concluded that it was appropriate to confirm
to the Board that the FY22 Annual Report
and Financial Statements were fair, balanced
and understandable and provided the
information necessary for shareholders to
assess the Group’s position, performance,
business model and strategy. The FBU
statement appears on page 116 of the
Directors’ Report.
The ‘key areas of focus’ included ensuring
that:
• The overall message of the narrative
reporting is consistent with the Financial
Statements;
• The overall message of the narrative
reporting is appropriate, in the context of
the industry and the wider economic
environment;
• The FY22 Annual Report and Financial
Statements is consistent with messages
already communicated to investors,
analysts and other stakeholders;
• The FY22 Annual Report and Financial
Statements, taken as a whole, is fair,
balanced and understandable;
• The Chair’s statement and Chief Executive
Officer’s review include a balanced view
of the Group’s performance and
prospects, and of the industry and market
as a whole;
• Any summaries or highlights are balanced
and reflect the position of the Group
appropriately; and
• Examples are of strategic importance and
do not over-emphasise immaterial matters.
Risk management and
internal control
The Board has overall responsibility for the
Group’s system of internal control and risk
management and determines our strategic
approach to risk. The Board’s approach to
risk management is set out in the Risks and
risk management section of this Report on
pages 42 to 49. The Committee reviews the
effectiveness of the system and ensures that
there is a process in place for identifying,
evaluating and managing the significant
risks to the achievement of the Group’s
strategic objectives.
Under Irish company law (Section 327(1) (b)
of the Companies Act 2014) and Provision 28
of the Code, the Directors are required to
give a description of the principal risks and
uncertainties which the Group faces. The
principal risks and uncertainties identified are
set out on pages 46 to 49 and form part of
the Directors’ Report. The principal risks
facing the Group include people risks,
operational risks, strategic risks, commercial
risks and financial risks. The impact of the IT
security incident and the impact of the cost
of living increases and inflation have been
taken into account when considering the
principal risks.
Whilst the Board as a whole is responsible
for the Group’s system of internal control,
the Board has delegated responsibility
for monitoring the effectiveness of the
Company’s risk management and internal
control systems to the Committee. The
Committee oversees a risk-based internal
audit programme, including periodic audits
of the risk processes across the Group. In
order to monitor the effectiveness of the risk
management system, the Committee also
includes risk deep-dives on its meeting
agenda, covering key risk areas across the
Group, and receives reports on the efficiency
and effectiveness of internal controls. Each
of the individual areas of the business and
functional management teams oversee the
process through which principal and
emerging risks and uncertainties relating to
their part of the business are identified.
The Board believes that the individual
business areas and functional management
teams are best placed to identify the
principal and emerging risks and
uncertainties associated with their respective
areas of business. During FY22, the
Committee reviewed reports from the ROC,
which provided ongoing monitoring and
evaluation of the risk environment, and risks
identified by individual business areas and
functional management, and the controls in
place to manage those risks. In addition, the
ROC reviews and considers emerging risks
which may impact the Group in the future.
Risks identified and associated mitigating
controls are subject to review by the Board
and the Committee on a regular basis.
The process for identifying, evaluating and
managing risk has been in place throughout
the financial year. This system of internal
control is designed to manage and mitigate,
rather than eliminate, the risk of failure to
achieve business objectives. The internal
control systems can only provide reasonable
assurance, rather than absolute assurance,
against material misstatement or loss. Our
internal controls and risk oversight are
monitored and continually improved to
ensure their compliance with the Financial
Reporting Council Guidance on Risk
Management, Internal Control and Related
Financial and Business Reporting.
In analysing and reviewing risks, the
Committee and the Board consider:
• The nature and extent of the risks,
including principal risks facing the Group,
as well as emerging risks;
• The extent and categories of risks it
regards as desirable or acceptable for the
Group to bear;
• The likelihood of the risk concerned
materialising and the impact of associated
risks materialising as a consequence;
• The Group’s ability to reduce the
incidence and impact on its business of
risks that do materialise;
• The operation of the relevant controls
and control processes;
• The costs of operating particular controls
relative to the benefits in managing
related risks; and
• The Group’s risk culture.
The key elements of the Group’s system of
internal control are as follows:
• Clearly defined organisation structures
and lines of authority, including delegated
authorities;
• Corporate policies for financial reporting,
treasury and financial risk management,
information technology and cyber
security, project appraisal, capital
expenditure and corporate governance;
• Annual budgets and strategic business
plans for the Group, identifying key risks
and opportunities;
81Strategic Report | Directors’ Report | Financial Statements
• Monitoring of performance against
budgets and forecasts and reporting
thereon to the Directors on a regular
basis;
• The Internal Audit function which
independently reviews key business
processes and controls and their
effectiveness; and
• The Audit and Risk Committee, which
approves audit plans, monitors
performance against plans and deals with
significant control issues raised by Internal
Audit or the external auditor.
The preparation of financial reports is
managed by the Group Finance team. The
Group financial reporting process is
controlled using the Group accounting
policies and reporting systems. The Group
Finance team provides guidance on the
preparation of financial information. The
Group seeks to continually test and improve
its internal control environment.
Details of the Group’s hedging and financial
risk management policies are set out in Note
21 and 22 to the Group Financial Statements,
respectively. Details of the Group’s financial
Key Performance Indicators (‘KPIs’) are set
out on pages 34 and 35. These disclosures
form part of the Directors’ Report.
During the year under review, Internal Audit
co-ordinated the Business Internal Control
Questionnaire, a self-assessment by senior
management on the effectiveness of key
controls. The purpose of this questionnaire is
for management to identify any control
weaknesses, which are subsequently
addressed. This year’s self-assessment
particularly focussed on internal controls
over financial reporting.
Finally, the Directors, through the use of
appropriate procedures, systems and the
employment of competent personnel, have
ensured that measures are in place to secure
compliance with the Company’s obligation to
keep adequate accounting records which are
kept at the registered office of the Company.
Whistleblowing arrangements
At Committee meetings held during the year,
the Committee reviewed the Group’s
arrangements for colleagues and/or third
parties to raise concerns, in confidence,
relating to ethical, auditing or other risk
issues and/or improprieties or areas of
concern. The Committee received reports
on all concerns which had been raised either
via the Group’s externally facilitated and
independent whistleblowing hotline, or via
alternative means (for example, by email
direct to the Company). The Group’s
externally facilitated whistleblowing hotline
is operated by an independent external
provider, is multilingual and is accessible
to all colleagues and third parties either
by phone (toll free 24 hours per day,
7 days a week), or via a web portal.
In reviewing the reports, the Committee
also analysed the issues raised by location,
category of concern raised and investigation
process along with the outcome of the
investigations into the issues.
The Group recently undertook a
benchmarking exercise of its whistleblowing
arrangements to help inform improvements
required and all improvements identified
have now been embedded into the Group’s
processes. The arrangements in place across
the Group are underpinned by the Group’s
Whistleblowing and Speak Up Policy as well
as the Group’s Code of Ethics and Business
Conduct. There are whistleblowing posters
on notice boards at all Greencore sites and
whistleblowing arrangements are explained
to all new colleagues as part of their
induction. The Group is at all times
committed to ensuring that any concerns
raised however received are appropriately
investigated.
External audit
The Committee, on behalf of the Board, is
responsible for the relationship with the
external auditor and for monitoring the
effectiveness and quality of the external audit
process. The assessment of the external
audit forms an integral part of the
Committee’s activities. The Committee
evaluates the effectiveness of the external
audit through an assessment of external and
internal factors taking into consideration the
Group’s business model and strategy,
business risks, and its perception of the
reasonable expectations of the Group’s
stakeholders. Following a formal audit tender
process, which was conducted in FY17,
Deloitte was appointed as the Group’s
external auditor and FY19 marked the first
year of the Deloitte external audit. The lead
partner for the audit of the Group’s Financial
Statements in respect of FY22 is Kevin
Sheehan.
In November 2022, in advance of the
finalisation of the Group’s FY22 Annual
Report and Financial Statements, the
Committee received a report from Deloitte
on its key audit findings, including the key
risk areas and significant judgements. In
addition, the Committee considered the
Letter of Representation and the
management letter.
Effectiveness
During FY22, the Committee reviewed and
assessed the quality and effectiveness of
the FY21 external audit process based on
evidence obtained throughout the financial
year by reference to the scope of the audit
work undertaken, monitoring performance
against the agreed audit plan, presentations
to the Committee, feedback from
management involved in the audit process
and separate review meetings held without
management. The Committee also
considered the experience and knowledge
of the external audit team and the results of
post-audit reviews with management and
the Committee. Overall, the Committee
remained satisfied with the effectiveness of
Deloitte based on its expertise considering
the audit team, their approach, lines of
enquiry and robust challenge. Following this
review, the Committee concluded that the
external audit was effective and was satisfied
with the level of services provided by
Deloitte.
The Committee regularly meets with the
external auditor absent management to
discuss any issues the external auditor may
wish to raise directly with the Committee.
Independence
In assessing the independence of the
external auditor, the Committee takes into
account the information and assurances
provided by the external auditor confirming
that its engagement team and its network
firms involved in the audit are independent of
any links with the Company.
In May 2022, the external auditor’s Letter of
Engagement was reviewed by the
Committee on behalf of the Group in
advance of the commencement of the audit.
The Letter of Engagement sets out
confirmation of Deloitte’s independence
within the meaning of the regulations and
professional standards.
The Committee has two separate policies
in place in order to safeguard the external
auditor’s independence and objectivity.
One policy sets out comprehensive
procedures surrounding the provision of
non-audit services by the external auditor.
The procedures are also set out in the
Committee’s Terms of Reference. In line with
that policy, the Committee reviewed the
level of fees incurred during FY22 for the
provision of non-audit services. During FY22,
Deloitte provided limited sustainability
assurance services on green loan KPI targets
which equated to c.3% of the overall external
audit fee. No further non-audit services were
provided by Deloitte. See Note 4 to the
Group Financial Statements.
The second policy restricts the hiring of any
former employee of the external auditor for
a period of two years post their employment
with the external auditor, without prior
approval of the Committee. Both policies
82 Greencore Group plc Annual Report and Financial Statements 2022
Report of the Audit and Risk Committee continued
are circulated to management regularly and
reviewed by the Committee on an annual
basis. These policies were reviewed in
FY22 and no amendments were made.
No former employees of Deloitte were
hired during FY22.
On the basis of the above, the Committee is
satisfied as to the external auditor’s
effectiveness, independence and objectivity,
and, accordingly, it is intended that an
advisory resolution will be put to the
shareholders at the forthcoming Annual
General Meeting in relation to the
continuation in office of Deloitte as external
auditor.
Committee effectiveness
As noted on page 71, Independent Audit
Limited (‘Independent Audit’), an external
consultancy firm was engaged to conduct
the FY21 annual evaluation of the Board and
Board Committees which was completed in
January 2022. The FY22 review of the
operation, performance and effectiveness of
the Committee was conducted using an
online questionnaire via Independent Audit’s
‘Thinking Board Evaluator’ portal and a
performance evaluation discussion was
included on the agenda for the Committee
at its September 2022 meeting, supported by
an analysis of how the Committee was
performing against key areas of its Terms of
Reference. Both reviews confirmed that the
Committee continues to operate effectively
and efficiently and has the skills and
expertise required in order to perform its role
appropriately. The Committee supported the
continued focus on risk matters on the
Committee agenda for FY23.
I would like to extend my thanks to my
Committee colleagues for their work and
support during the year. The Committee will
continue to be dedicated to providing
meaningful disclosures on the Committee’s
activities. As this is my last year as Chair of
the Committee, I would like to thank all my
fellow Committee members for their hard
work and commitment during my tenure.
Helen Weir
On behalf of the Audit and Risk Committee
28 November 2022
83Strategic Report | Directors’ Report | Financial Statements
Report on Directors’ Remuneration
Dear Shareholder,
On behalf of my colleagues on the
Remuneration Committee (the ‘Committee’)
and the Board, it is my pleasure to present
the Committee’s Report on Directors’
Remuneration (‘Report’) which comprises
the Annual Report on Remuneration for the
financial year ended 30 September 2022
(‘FY22’) and the proposed 2023
Remuneration Policy.
I wish to start this Report by acknowledging
and responding to the outcome of the vote
on the resolution to approve the FY21 Annual
Report on Remuneration at the 2022 Annual
General Meeting (‘AGM’). Whilst the advisory
resolution was passed, a significant number
of shareholders did not support the
resolution (with c.46% of shareholders voting
against). Through extensive engagement
both prior to and following the 2022 AGM,
the Committee understands that this
disappointing outcome related primarily to
the decisions taken by the Committee in
relation to FY21 remuneration: the one-off
tailored structure of the FY21 Performance
Share Plan (‘PSP’) award, and the structure
and payment of bonus for FY21 in particular.
The Committee is grateful for the input and
insights received from shareholders and the
open dialogue it has been able to have
during this challenging period; and I hope
that we have been able to explain clearly
below the process and rationale for the
decisions taken in relation not only to FY21,
but also remuneration in FY22 and beyond, as
a result of the feedback received.
The departure from our usual approach to
remuneration for FY21 reflected the very
exceptional circumstances and challenges
facing the business at the time. The
Committee sought to develop a framework
for the annual bonus and PSP for FY21 that
reinforced the delivery of the strategy and
shareholder value, in what was and remains a
very uncertain and constantly changing
external environment. In doing so, the
Committee determined that a one-off
departure from our usual practices would
more closely align the interests of our
Executive Directors with key stakeholders –
including our employees and shareholders
– and protect the Group. The Committee
recognises that aspects of this tailored
incentive design for FY21 – while cascaded
on a consistent basis to other eligible bonus
and PSP participants to ensure alignment
internally – were not in line with some of the
incentive design principles generally
expected by shareholders. Through prior
consultation with our largest shareholders,
the Committee sought to address proactively
the feedback and views received. We
implemented a number of safeguards to
ensure that the actions taken in FY21 would
only deliver reward if outcomes were aligned
with the longer term stakeholder experience,
including 100% deferral of any bonus payout
into shares for three years, and extending the
holding period applying to any shares vesting
from the FY21 PSP such that the total time
horizon for all three tranches was five years.
We also reduced, at the time of grant, the
award opportunity of the FY21 PSP to
mitigate the potential risk of windfall gains as
a result of the prevailing share price at the
time of grant. The Committee also
reinforced the availability to it of market
standard discretionary powers to override
the formulaic outcome of the FY21 PSP ex
post to ensure continued alignment of
executive reward with the underlying
performance of the Group. Reflecting
alignment with the share price, Tranche 1 of
the FY21 PSP lapsed in FY22 and Tranche 2 is
expected to lapse in January 2023, which
cumulatively amount to 40% of the total
FY21 PSP award opportunity.
During the period of consultation after the
2022 AGM (in which we contacted
shareholders representing 83% of the
register), a number of shareholders who
provided feedback flagged the exceptional
nature of FY21 remuneration as the reason
for their decision not to support the
resolution to approve the FY21 Annual
Report on Remuneration; notwithstanding
their comfort with reverting to prior (and
more conventional) practices for FY22. The
Committee recognises the strength of
feeling around the departure from normal
remuneration practices for FY21 and, in
response, we propose to maintain the
structure for FY22 outlined in this Report
under the new Policy, for FY23, which was
our structure prior to the exceptional
circumstances we faced in FY21.
A number of shareholders also expressed
concerns about package quantum. The
Committee has taken this feedback on board
in setting the packages agreed for the new
Chief Executive Officer and Chair Designate,
whose packages have both been set to
reflect the size and geographic reach of the
Greencore business today. Further details on
these packages are set out in this Report, and
the Committee remains committed to
keeping these under review to ensure they
remain appropriately competitive – without
being excessive – and in line with our stated
remuneration principles.
2023 Remuneration Policy
The AGM in January 2023 marks the third
anniversary of the adoption of the current
2020 Remuneration Policy (the ‘Current
Policy’), and we will be submitting the
proposed 2023 Remuneration Policy (the
‘Revised Policy’) (collectively the ‘Policies’) to
shareholders for an advisory vote at the
forthcoming AGM.
“The Committee reviewed the Remuneration
Policy during FY22 to ensure it remains
fit-for-purpose in the context of Greencore
today. We have taken into account the
feedback of stakeholders while ensuring
our approach continues to reflect our
remuneration principles, incentivise delivery
of our strategy, and align executive reward
with the experience of key stakeholders; in
particular our shareholders and colleagues.”
84 Greencore Group plc Annual Report and Financial Statements 2022
Report on Directors’ Remuneration continued
During the year, the Committee reviewed the
Current Policy to ensure that it continues to
support delivery of the strategy and reflects
governance good practice. The Committee
believes that the Current Policy remains fit
for purpose and only minor changes are
being proposed:
• We have simplified the policy on
pensions, reflecting that the contribution
rate for incumbent directors is now fully
aligned with the rate applicable to the
wider colleague base;
• Following the recent Board changes, the
Committee determined that the notice
period required from future Executive
Director appointments (including Dalton
Philips) should be extended to six months
from three, and that from the Company
to 12 months from 11 months (in line with
typical market practice); and
• To provide a suitable level of flexibility for
annual bonus design going forward, the
Revised Policy allows for up to 25% of
maximum to be payable for threshold
performance. This is intended to give the
Committee the flexibility to set threshold
performance at an appropriate level for
the business context through the term of
the Revised Policy and set the payout
accordingly. This flexibility will not be
used for the FY23 cycle.
Alongside the renewal of the Policy at the
AGM in January 2023, we will be seeking
shareholder approval for the 2023
Performance Share Plan (‘PSP’) Rules. The
Rules of our current PSP were last adopted
by shareholders in 2013 and authority to
grant awards under the plan will expire on
the tenth anniversary of that adoption date.
It is therefore intended that a new PSP (the
Rules of which are consistent with the rules
of the existing plan – including maximum
award levels and dilution limits – and reflect
updates in generally-accepted good practice
since 2013), will be put to shareholders at the
2023 AGM.
To assist with the recruitment and retention of
employees below the Executive Director level,
we are also seeking shareholder approval for
a Restricted Share Plan, to enable awards to
be settled via new issue shares (subject to
appropriate dilution limits). This will provide
the Committee with greater flexibility to
structure share awards for the wider
colleague base which are competitive – but
not excessive – in relevant talent markets.
Executive Directors will not be entitled to
participate in the Restricted Share Plan.
Following engagement, the Committee
received a favourable response from
shareholders for the proposed Revised
Policy. Reflecting comments received, we
have sought to strengthen the disclosure
provided in the Annual Report on
Remuneration to ensure that it continues
to meet the expectations of our external
stakeholders. In particular, we have improved
the disclosure around the personal and
strategic objectives used in the Annual Bonus
Plan (‘ABP’). Our sustainability strategy is a
core part of our overall strategy, and
reflecting the importance of this to our
stakeholders, we have already embedded
specific objectives around this into the
strategic objectives in the ABP and we will
continue to assess how we reflect them in
our incentive arrangements (both short and
long-term) for future award cycles during the
life of the Revised Policy.
Board changes during the year
As reported last year, Patrick Coveney,
Executive Director and Chief Executive
Officer (‘CEO’) resigned from the Group with
effect from 30 March 2022. In line with our
Policies, and given his decision to terminate
his contract, he did not receive any bonus for
FY21 (either in cash or deferred shares). He
was not eligible to participate in the FY22
ABP or receive an award under the FY22 PSP.
All outstanding PSP and deferred share
awards lapsed upon his departure. There
were no payments in lieu of notice and he
remains subject to the post-employment
shareholding guideline.
Following Patrick’s resignation on 30 March
2022, and in line with the Board’s
contingency plan, Gary Kennedy was
appointed Executive Chair on 31 March 2022
and remained in that role until the
appointment of Dalton Philips as Executive
Director and CEO. Gary received an
additional fee (€32,000 per month) for that
period whilst performing executive duties.
Prior to that, for the period from 1 December
2021 until 30 March 2022, Gary received an
exertion fee of €32,000 per month to
recognise the significant increase in the time
commitment arising from him assuming a
more active role in the business and through
a period of leadership transition. Gary was
not eligible to participate in the ABP or PSP.
Gary stepped down as Executive Chair on
the appointment of Dalton Philips and will
retire as Board Chair and Non-Executive
Director at the conclusion of the 2023 AGM.
Leslie Van de Walle will join Greencore as
Non-Executive Director and Chair Designate
on 1 December 2022 and assume the Board
Chair role from the end of the 2023 AGM.
Dalton Philips joined the Board as Executive
Director and CEO on 26 September 2022
on an annual salary of €700,000. Dalton is
eligible to receive a pension contribution of
8% of salary, which is in line with the pension
contribution currently available to the wider
colleague base. Due to the point in the year
at which he joined, Dalton did not receive
1. The Group uses Alternative Performance Measures (‘APMs’) which are non-IFRS measures to monitor the performance of its operations and of the Group as a whole.
These APMs along with their definitions and reconciliations are provided in the APMs section from page 179.
FY22 business performance
1
Performance highlights include:
• Group Revenue up 31.3% to £1.7bn, driven by strong growth
in food to go and other convenience categories
• Pro Forma Revenue Growth in food to go categories increased
by 35.2% year on year, driven by a combination of strong
underlying volume growth, contribution from new wins,
and increased pricing as we pass through inflation
• Significant growth in Adjusted Operating Profit which is
up £33.2m to £72.2m from £39.0m in FY21, with Adjusted
Operating Margin of 4.2% (FY21: 2.9%) and H2 22 margin
of 5.7% (H2 21: 5.2%)
• Adjusted EPS of 9.2p is 5.5p ahead of FY21
• Strong cash conversion of 46.3% resulting in Net Debt
(excluding lease liabilities) of £180.0m (2021: £183.1m)
at year end after £33.1m of strategic capex and completion of
£8.8m of the £10.0m share buyback
• Strong balance sheet with substantial liquidity headroom
and continued progress on deleveraging. Net Debt: EBITDA
of 1.5x as measured under financing agreements now reaching
the Group’s target range of 1.0x–1.5x. Committed facilities
of £578m
• Completed £10m share buyback programme in early October
which is the first phase of the £50m value return to
shareholders announced in May 2022
85Strategic Report | Directors’ Report | Financial Statements
any variable compensation for FY22. For
FY23, he will be eligible to receive a
performance related bonus of up to 150% of
salary and a FY23 PSP award with a face
value of 175% of salary (within the Policy
maximum of 200% of salary). Dalton’s
remuneration package was set in the context
of his experience and valued expertise in the
grocery sector, but also reflecting the size
and geographic reach of Greencore today.
Annual Bonus Plan (‘ABP’)
The FY22 ABP was based 50% on Adjusted
Operating Profit (‘AOP’), 25% on Free Cash
Flow (‘FCF’) and 25% on personal and
strategic objectives. Despite the increasingly
challenging operating environment of FY22,
the Company delivered a resilient AOP
outturn incrementally above the threshold
set at the start of the year. FCF performance
was strong, and exceeded the maximum
performance level set at the start of the year.
Taking into account the strong achievement
by the CFO of many of the personal and
strategic objectives set for FY22 (but also
reflecting that some of the sustainability
objectives were not met in full), the
Committee assessed the overall ABP payout
for Emma Hynes to be 46.25% of maximum.
Further details are set out on pages 99
to 101.
Performance Share Plan (‘PSP’)
The FY20 PSP award is based 1/3rd on
Adjusted EPS growth, 1/3rd on ROIC and
1/3rd on relative TSR performance
conditions measured over the period of
three financial years ended 30 September
2022. Notwithstanding the Group’s resilient
performance over the performance period,
the performance targets, set before the
onset of the COVID-19 pandemic and the
downturn in the Group’s operating
environment (and external market conditions
more generally), were not met and awards
will lapse in full.
The first tranche (i.e. 15%) of the FY21 PSP
lapsed in full in FY22. The second tranche is
still in flight at the date of this Report, but its
performance period is substantially
completed. Based on performance to the
date of signing this Report, this second
tranche of the award (i.e.25%) is also
expected to lapse in full.
Remuneration in FY23
The Committee’s decisions in relation to
Executive Director remuneration for FY23
were informed as much by the broader
context as our internal pay policies and
practices. As in previous years, the
Committee reviewed in detail the
stakeholder experience, in particular this year
the actions taken by management to support
our wider colleague base through the
prevailing inflationary environment and
ongoing cost-of-living pressures. These
actions included:
• focusing a higher proportion of the
available pay review budget on our lowest
paid colleagues. Lower paid colleagues
received an average increase of around
6% for FY23, taking into account the
compression of pay resulting from higher
National Living Wage (NLW) increases
over recent years in the direct and indirect
workforce. The median increase awarded
across the professional and managerial
population (including exceptional and
internal equity adjustments) was c.4.8%.
Restraint has been demonstrated at more
senior levels to enable these decisions to
be implemented in an affordable manner;
and
• extending a wide range of other support
measures, including free tea and coffee
for all colleagues, vouchers, and offering
our colleagues the opportunity to
purchase our own products at nominal
prices.
Noting the prudence of actions taken, and
the desire to extend these principles fairly to
the Executive Directors, the Committee
agreed that it would be appropriate to award
a 3% salary increase to Emma Hynes, the first
increase since she was appointed Chief
Financial Officer (‘CFO’) in 2020. Dalton
Philips’ salary was set on appointment and
remains unchanged for FY23.
The ABP opportunity will be 150% of salary
for both Executive Directors. The financial
element of the ABP (75% of the opportunity)
will remain a combination of Adjusted
Operating Profit (weighted 50%) and Free
Cash Flow (25%), with the remaining 25% of
the opportunity linked to personal and
strategic objectives. For FY23, this element
will continue to include objectives linked to
our sustainability strategy. Performance for
each element will be measured over the full
year. The targets and the associated outturn
will be disclosed in the FY23 Annual Report
on Remuneration, in line with prior practice.
The FY23 PSP opportunity for the CEO is
175% of salary and for the CFO is 150% of
salary (within the Policy maximum of 200%
of salary), with vesting based on
performance over the three-year
performance period against three equally
weighted measures. The measures will
remain unchanged from those employed for
the FY22 awards: Adjusted Earnings per
Share (‘Adjusted EPS’), relative TSR (against
our tailored comparator group), and Return
on Invested Capital (‘ROIC’). At the time of
publishing this Report, the performance
targets in relation to the EPS and ROIC
elements of the FY23 PSP have not been
finalised and will be disclosed in the RNS
announcement at the time of grant, which is
anticipated to be in December 2022. The
Relative TSR performance condition is
unchanged from the FY22 PSP cycle.
Concluding remarks
I would like to thank shareholders and proxy
advisors for providing both their time and
input during the year, and also thank my
fellow members on the Committee and the
wider Board for their valuable contribution to
the remuneration agenda during FY22.
We believe that our approach to
remuneration in FY22 and for FY23 supports
the objective of driving the Group’s
performance while recognising the wider
stakeholder experience and I hope our
efforts will be reflected in your support at the
2023 AGM. I remain available to meet and
discuss our remuneration arrangements with
shareholders outside of the AGM and I look
forward to continuing to engage with
shareholders on all future remuneration
matters.
Linda Hickey
On behalf of the Remuneration Committee
28 November 2022
86 Greencore Group plc Annual Report and Financial Statements 2022
Report on Directors’ Remuneration continued
The Directors’ Remuneration Policy (the ‘2023 Remuneration Policy’) set out below will be put to an advisory shareholder vote and, subject
to shareholder approval, will become effective from the date of the AGM in 2023. The main aim of the 2023 Remuneration Policy is to
align the interests of Executive Directors with the Group’s strategic priorities and the long term creation of shareholder value. The 2023
Remuneration Policy is intended to pay the Executive Directors competitively and appropriately – without being excessive. When setting the
2023 Remuneration Policy (and determining the approach to its implementation for the Executive Directors), the Remuneration Committee
(the ‘Committee’) took into account a number of factors, including the business strategy, remuneration practices of other companies of
similar size and scope, the stakeholder context (in particular remuneration practices throughout the Group), and the regulatory and
governance framework.
Remuneration principles
The following principles and Provision 40 pillars of the 2018 UK Corporate Governance Code (the ‘Code’) remain the Committee’s framework
to guide remuneration decisions:
Principle / Provision 40 pillar(s) In action
Alignment and fairness
– alignment to culture
• Enabling all employees to become shareholders;
• Operating a Performance Share Plan (‘PSP’) for senior management personnel;
• To the extent possible, offering share plans to all eligible colleagues;
• Operating shareholding guidelines (including for a period post-employment), bonus deferral and a
post-vesting holding period for Executive Directors’ PSP awards; and;
• Keeping shareholder value creation and the stakeholder context in sharp focus.
Pay-for-performance
– risk
– predictability
– proportionality
• Linking variable remuneration to key pillars of success for Greencore;
• Setting targets that are appropriately stretching and vesting levels that are reflective of the shareholder
experience;
• Avoiding reward for mediocre performance; and
• Ensuring personal and strategic objectives are defined, accurately assessed and clearly communicated.
Transparency and simplicity
– clarity
– simplicity
• Communicating clearly and effectively all decisions to shareholders through shareholder engagement
and the Annual Report and Financial Statements; and
• Using a simple incentive structure based on measures that are central to our strategy and business model.
Executive Directors’ Remuneration Policy table
The table below sets out the elements and purpose of Executive Directors’ remuneration and how each element operates, as well as the
maximum opportunity of each element and any applicable performance measures. The 2023 Remuneration Policy set out in this Report is
largely unchanged from that approved by shareholders in 2020, save as explained in further detail in the introductory letter from the
Remuneration Committee Chair at the front of the Report on Directors’ Remuneration.
Element of
remuneration Purpose and link to strategy Operation Maximum opportunity Performance measures
Base salary
To provide the basis of
a market-competitive
overall remuneration
package.
Base salaries are determined taking into
account a number of factors, including:
• individual responsibilities, performance
and experience;
• the role, skills and contribution of
individuals;
• practice at other companies of a similar
size and complexity;
• the pay arrangements throughout the
organisation; and
• the Company’s progress towards its
objectives.
Salaries are usually reviewed during
November of each year and any increases will
normally be effective from the preceding
1 October. However, the Committee reserves
the right to make salary increases effective
from any other time where considered
appropriate.
Whilst there is no maximum
salary, increases will normally
be in line with the average
increase awarded to other
colleagues in the Group.
However, the Committee
retains the discretion to
make increases above this
level in certain
circumstances, including,
but not limited to:
• an increase in scope
and/or responsibility of a
role;
• a new Executive Director
being moved to
market-competitive
positioning over time;
and
• an existing Executive
Director falling below
the appropriately
competitive market
positioning.
Not applicable.
2023 Remuneration Policy
87Strategic Report | Directors’ Report | Financial Statements
Element of
remuneration Purpose and link to strategy Operation Maximum opportunity Performance measures
Pension
To provide competitive
and appropriate
retirement plans.
Executive Directors are able to participate in a
defined contribution pension scheme, as is
available to the majority of the Group’s
workforce in the relevant market and/or
receive a non-pensionable cash allowance.
The Company’s maximum
contribution / cash
allowance for Executive
Directors is in line with the
pension contributions
available to the majority of
the Group’s workforce. This
is currently 8% of salary.
Not applicable.
Benefits
To provide market
typical benefits to
ensure that the overall
remuneration package
is competitive.
Executive Directors are eligible to receive
benefits, including but not limited to, health
insurance for the individual and their
immediate family (or an agreed allowance
with which to arrange cover personally), life
assurance and permanent health insurance,
and a car allowance (or a company car and
payment of related expenses).
Other benefits may be provided at the
discretion of the Committee based on
individual circumstances and business
requirements, such as appropriate relocation
and expatriate allowances and support.
The cost of benefit
provision will depend on the
cost to the Company of
providing individual items
and the individual’s
circumstances and
therefore there is no
maximum value.
Not applicable.
Annual Bonus
Plan (‘ABP’)
To incentivise and
reward the
achievement of annual
financial and non-
financial targets, in line
with the Company’s
strategic objectives.
The deferred element
aligns the interests of
Executive Directors and
shareholders and
provides a strong
retention mechanism.
Performance is assessed over the relevant
financial year.
The level of payment is determined by the
Committee after the year-end, based on
performance against targets and any
additional factors it deems significant.
A proportion (normally 50% unless the
Committee determines otherwise) of any
bonus is paid in cash, with the remainder
deferred into a share award under the
Deferred Bonus Plan. Cash bonuses are paid
following the year-end.
Deferred Bonus Plan (‘DBP’)
The deferred shares will normally vest three
years after the grant of an award (unless the
Committee determines an alternative vesting
period is appropriate).
The vesting of deferred shares will normally
be subject to continued employment.
Dividend equivalents may be awarded in
respect of the awards that vest.
The annual bonus is subject to malus and
clawback provisions, i.e. forfeiture or
reduction of the deferred portion or recovery
of paid amounts, in exceptional
circumstances. Such circumstances include,
but are not limited to, serious misconduct, a
material misstatement of the Company’s
audited results, a material failure of risk
management, a material breach of health and
safety regulations or serious reputational
damage to any member of the Group.
The maximum annual
bonus opportunity is 150%
of salary.
The bonus earned at
threshold performance is nil
(unless the Committee
determines an alternative
payout level, of up to 25% of
the award, is appropriate)
with up to 50% of the award
normally payable for target
performance. 100% of the
award is payable for
maximum performance.
The bonus is
determined based
on financial
performance metrics
and personal and
strategic objectives.
Measures and
weightings will be
determined at the
start of each
performance year to
align with the
Group’s short term
financial and
strategic priorities.
No more than 25% of
the annual bonus
opportunity will be
based on personal
and strategic
objectives.
The Committee sets
targets every year to
ensure that they are
appropriately
stretching.
Further details,
including targets
attached to the
annual bonus for the
year under review,
are provided in the
Annual Report on
Remuneration.
88 Greencore Group plc Annual Report and Financial Statements 2022
Report on Directors’ Remuneration continued
2023 Remuneration Policy continued
Element of
remuneration Purpose and link to strategy Operation Maximum opportunity Performance measures
Performance
Share Plan
(‘PSP’)
To create alignment
between the interests
of Executive Directors
and shareholders
through the delivery of
rewards in Company
shares.
To incentivise Executive
Directors to deliver
long term shareholder
value creation and the
achievement of targets
aligned to the success
of the strategy.
Awards of conditional shares, nil-cost
options, or forfeitable shares are made
annually, with vesting dependent on the
achievement of performance conditions.
Awards normally vest based on performance
measured over a period of three years or
such other period as the Committee may
determine.
The Committee determines the extent to
which the performance measures have been
met. In adjudicating the final vesting
outcome, the Committee will also consider
the underlying business performance, as well
as the value created for shareholders. The
formulaic vesting outcome may be adjusted
where, in the Committee’s opinion, an
adjustment is warranted.
An additional two year holding period applies
to Executive Directors’ vested shares before
they are released to Executive Directors on
the fifth anniversary of the grant date (or
another date determined by the Committee).
In respect of vested PSP awards that are still
subject to a holding period, awards will
normally be released at the end of the
holding period. However, the Committee has
discretion to determine otherwise, taking into
account the circumstances at the time.
Dividend equivalents may be awarded in
respect of the awards that vest.
PSP awards are subject to malus and
clawback, i.e. forfeiture or reduction of
unvested awards, application of additional
conditions for vesting, or recovery of vested
awards, in exceptional circumstances. Such
circumstances include, but are not limited to,
serious misconduct, a material misstatement
of the Company’s audited results, a material
failure of risk management, a material breach
of health and safety regulations, or serious
reputational damage to any member of the
Group.
The maximum annual
award level is 200% of
salary.
For threshold levels of
performance, up to 25% of
the award vests, increasing
to 100% of the award for
maximum performance.
There is straight-line vesting
between these points.
Performance
measures are
selected to align with
the Group’s longer
term strategy.
The Committee
determines targets
for each cycle to
ensure that they are
appropriately
stretching and
represent value
creation for
shareholders, whilst
remaining
motivational for
management.
Further details,
including the targets
attached to awards
in respect of each
year, are provided in
the Annual Report
on Remuneration.
All Employee
Share Plans
To the extent possible,
enable eligible
employees to become
shareholders in
Greencore.
To the extent possible, the Executive
Directors are eligible to participate in any
tax-authority approved, all-employee share
plans offered by the Company on consistent
terms as other eligible employees in the
relevant jurisdiction.
In addition to existing employee share
plans (and other share plans applicable to
employees) of the Group, the Board may
introduce other employee share plans
from time to time in accordance with
applicable law.
To the extent possible,
Executive Directors are
eligible to participate on the
same terms as offered to
other eligible employees;
subject to the limits set out
in the relevant Irish or UK
tax legislation and/or
revenue rules.
Not applicable.
89Strategic Report | Directors’ Report | Financial Statements
Executive Director shareholding guidelines and policy
The Committee continues to recognise the importance of Executive Directors aligning their interests with shareholders through building up
a significant shareholding in the Company. Shareholding guidelines are in place whereby all Executive Directors are required, under normal
circumstances, to acquire a holding of shares in the Company equal to 200% of salary, typically over a five year period commencing on the
date of their appointment to the Board. Details of the Executive Directors’ current shareholdings are provided in the Annual Report on
Remuneration.
With effect from 2020, Executive Directors are also subject to a post-employment shareholding policy and will normally be expected to
maintain a holding of Greencore shares at a level equal to the lower of the in-post shareholding guideline or the individual’s actual
shareholding for a period of two years from the date the individual ceases to be a Director. For the purpose of this post-employment
shareholding policy, the following shares shall count towards the shareholding: vested DBP shares, unvested DBP shares (carried at an
assumed net of tax number) and vested PSP shares (including those subject to a holding period). For the avoidance of doubt, any shares
purchased by an Executive Director in the open market shall be excluded from this shareholding requirement.
The specific application of this shareholding policy will be at the Committee’s discretion.
Payments from previously agreed remuneration arrangements
The Committee reserves the right to make any remuneration payments and payments for loss of office (including the exercise of any
discretion available to it in connection with such payments), notwithstanding that they may not be in line with the 2023 Remuneration Policy,
but where the terms of the payment were agreed either before the 2023 Remuneration Policy came into effect or at a time when the relevant
individual was not a Director of the Company and in the opinion of the Committee, the payment was not in consideration for the individual
becoming a Director of the Company. This does not apply to pension contributions for new appointments to the Board, which will be aligned
with the pension contribution available to the majority of the Group’s workforce on appointment to the Board. Details of any such payments
will be set out in the Annual Report on Remuneration as they arise.
Discretion
The Committee may make non-material amendments to the 2023 Remuneration Policy (e.g. for regulatory, exchange control, tax or
administrative purposes or to take account of a change in legislation) without obtaining shareholder approval for that amendment.
The Committee has discretion to adjust the formulaic ABP and PSP vesting outcomes to ensure alignment of pay with performance, i.e. to
ensure the final outcome is a fair and true reflection of underlying business performance. The Committee also has discretion to vary the ABP
and PSP performance measures and weightings for each cycle, to reflect strategic priorities over the relevant performance period.
Awards granted under the ABP and the PSP:
• may be settled in cash;
• may incorporate the right to receive, in cash or shares, the value of dividends which would have been paid or allotted between grant and
vesting on the shares that vest. This may assume the reinvestment of those dividends in the Company’s shares on a cumulative basis; and
• may be adjusted in the event of a variation of the Company’s share capital or a demerger, delisting, special dividend, rights issue or other
event, which may, in the Committee’s opinion, affect the current or future value of awards. The Committee may amend or substitute
performance conditions applicable to an outstanding PSP award if an event (or events) occurs which causes the Committee to consider
that an amended or substituted performance condition would be more appropriate and would not be materially less difficult to satisfy than
was originally intended.
Selection of performance measures
The ABP is based on financial performance, as well as personal and strategic objectives. The financial element is currently based on Adjusted
Operating Profit and Free Cash Flow. Adjusted Operating Profit and Free Cash Flow are both Group Key Performance Indicators (‘KPIs’)
creating direct alignment between incentives and delivery of the Group’s strategy. The achievement of key personal and strategic (i.e.
non-financial) objectives is also considered important to drive the performance of the business over the longer term.
The PSP is currently based on Adjusted EPS, ROIC and relative TSR. The earnings measure incentivises Executive Directors to grow earnings
for shareholders over the long term, whilst the return measure ensures that the growth is sustainable and in the long term interests of the
Company and its shareholders. Relative TSR provides additional shareholder alignment and incentivises our outperformance against
companies in our sector.
The current mix of annual and long term measures is discussed in further detail in the Annual Report on Remuneration. Targets are set taking
into account a number of factors including internal and external forecasts and market practice.
The Committee keeps the performance measures, weightings and targets of both the ABP and PSP under review and reserves the right to
adjust these if they are no longer considered to be appropriate.
90 Greencore Group plc Annual Report and Financial Statements 2022
Report on Directors’ Remuneration continued
2023 Remuneration Policy continued
Remuneration arrangements throughout the Group
Remuneration arrangements throughout the Group are based on the same high-level remuneration principles as for the Executive Directors.
We believe that individuals should be rewarded based on their contribution to the Group and the success of the Group, and that reward
should be competitive in the market, without paying more than is necessary to recruit and retain individuals. Specific packages will differ,
taking into account the role, location, seniority and level of responsibility.
Senior management personnel participate in the ABP and the PSP based on broadly the same principles as those for the Executive Directors.
Other management personnel may be eligible to participate in share-based incentives to reflect competitive practice in relevant talent
markets, including structures not provided for in this Policy.
In addition, to the extent possible, eligible employees are entitled to join the Group’s all employee share plans (and other share plans
applicable to employees from time to time), which provide a means of saving and give employees the opportunity to become shareholders in
the Company.
Non-Executive Directors’ remuneration policy
The remuneration policy for the Non-Executive Directors, including the Chair, is to pay fees necessary to attract Non-Executive Directors of
the calibre required, taking into consideration the size and complexity of the business and the time commitment of the role, without paying
more than is appropriate.
Details of the 2023 Policy, which are unchanged from the 2020 Policy, are set out in the table below:
Element of remuneration Purpose and link to strategy Operation Maximum opportunity Performance measures
Fees
To attract and retain
Non-Executive
Directors of the highest
calibre with broad
commercial and other
experience relevant to
the Company.
Non-Executive Directors are paid a basic
fee for membership of the Board with
additional fees being paid for the role of
the Board Chair, the Senior Independent
Director or Chair of a Board Committee,
to take into account the additional
responsibilities and workload required. If a
Non-Executive Director is a Chair of more
than one Committee, the additional fee is
capped at the higher Committee fee. If a
Non-Executive Director is also the Senior
Independent Director, the fee is capped at
the additional Senior Independent Director
fee. Additional fees may also be paid for
other Board responsibilities or roles if this is
considered appropriate.
Fees are reviewed at appropriate intervals
and are set taking into account the level of
responsibility, relevant experience and
specialist knowledge of each Non-
Executive Director and fees at other
companies of a similar size and complexity.
Fees are normally paid in cash.
The maximum annual
aggregate basic fee for all
Non-Executive Directors is
currently €850,000, but,
subject to shareholder
approval, as required
under the Company’s
Articles of Association, this
figure may increase or
decrease.
Not applicable.
Incentive
arrangements
None of the Non-Executive Directors are
eligible to participate in any of the Group’s
incentive arrangements.
Not applicable. Not applicable.
Benefits
Non-Executive Directors do not currently
receive any benefits; however, benefits may
be provided in the future if, in the view of
the Board, this is considered appropriate.
Travel and other reasonable expenses
(including fees incurred in obtaining
professional advice in the furtherance of
their duties) incurred in the course of
performing their duties are reimbursed.
The Company may settle any tax due on
benefits or taxable expenses.
Not applicable. Not applicable.
91Strategic Report | Directors’ Report | Financial Statements
Remuneration policy for new hires
The Group is committed to ensuring appropriate succession plans are in place, specifically in respect of Executive Directors and other senior
management. When considering the remuneration package of a potential new Executive Director, the Committee would seek to apply the
following principles:
• The Committee will ensure that the package is sufficient to attract the appropriate individual, having regard to the calibre, skills and
experience required, whilst being cognisant of not paying more than is necessary.
• The Committee’s policy is to set the remuneration package for a new Executive Director in accordance with the approved remuneration
policy at the time of the appointment. The maximum aggregate opportunity under the ABP and PSP is limited to 350% of salary.
• In addition, where an individual forfeits outstanding incentive payments and/or contractual rights at a previous employer as a result of their
appointment at the Group, the Committee may offer additional compensatory payments or awards (‘buy-out’) in such form as it considers
appropriate. In doing so, it will take into account all relevant factors including the form of awards, expected value and vesting timeframe of
forfeited opportunities. When determining such buy-out arrangements, the Committee’s intention would be that awards would generally
be made on a ‘like for like’ basis as those forfeited. In order to facilitate any such buy-out awards, the Committee may exercise the
discretion available under the Listing Rules to grant awards under an alternative structure to those set out in the policy without seeking
prior shareholder approval.
• Where an Executive Director is required to relocate from their home location to take up their role, the Committee may provide reasonable
assistance with relocation in line with local market norms.
• In the event that an internal candidate is promoted to the Board, legacy terms and conditions (with the exception of pension entitlements,
which shall be aligned to those of the majority of the Group’s workforce) and any outstanding incentive awards will normally be honoured.
• The remuneration package for a newly appointed Non-Executive Director will normally be in line with the structure set out in the Non-
Executive Directors’ remuneration policy table on the previous page.
Remuneration opportunities in different performance scenarios
The charts below illustrate the potential future value and composition of the Executive Directors’ remuneration opportunities in four
performance scenarios: minimum, on-target (i.e. in line with the Company’s expectations), maximum, and maximum plus 50% share price
appreciation, a scenario where 50% share price appreciation is included.
The potential remuneration opportunities are based on the proposed application of the 2023 Remuneration Policy for the forthcoming
financial year (FY23), applied to the Executive Directors’ base salaries as at 1 October 2022.
Dalton Philips, CEO (€000) Emma Hynes, CFO (€000)
Minimum On-target Maximum Maximum+50%
€806
€1,637
€3,081
€3 ,694
0
1,000
500
1,500
2,000
2,500
3,500
3,000
4,000
100% 49%
19%
40%
50%
32%
34% 28%
26% 22%
€568
€1,119
€2,038
€2,406
Minimum On-target Maximum
Maximum+50%
0
500
1,000
1,500
2,000
2,500
3,000
16%
36%
46%
33%
36%
31%
100% 51% 28% 23%
Fixed remuneration Annual bonus Long-term incentive
The charts above exclude the effect of any Company share price appreciation except in the ‘maximum+50%’ scenario.
Assumptions:
Performance scenario Includes
Minimum
• Salary, pension and estimated benefits (‘fixed remuneration’)
• No bonus payout
• No vesting under the PSP
On-target
• Fixed remuneration
• 50% of maximum annual bonus payout (i.e. 75% of salary)
• 25% of maximum vesting under the PSP (i.e. 43.75% and 37.50% of salary for the CEO and CFO respectively)
Maximum
• Fixed remuneration
• 100% of maximum annual bonus payout (i.e. 150% of salary)
• 100% of maximum vesting under the PSP (i.e. 175% and 150% of salary for the CEO and CFO respectively)
Maximum+50%
• Fixed remuneration
• 100% of maximum annual bonus payout (i.e. 150% of salary)
• 100% of maximum vesting under the PSP, plus 50% share price appreciation
92 Greencore Group plc Annual Report and Financial Statements 2022
Report on Directors’ Remuneration continued
2023 Remuneration Policy continued
Executive Director service contracts
Dalton Philips was appointed as Chief Executive Officer (‘CEO’) with effect from 26 September 2022 and has a service contract dated 13 May
2022 with an indefinite term, which is terminable by either the Company or Dalton Philips on 12 and six months’ notice, respectively.
Emma Hynes was appointed as Chief Financial Officer (‘CFO’) with effect from 19 May 2020 and has a service contract dated 23 March 2020
with an indefinite term, which is terminable by either the Company or Emma Hynes on 11 and three months’ notice, respectively.
Policy on payments to Executive Directors leaving the Group
The Executive Directors’ service contracts make provision, at the Board’s discretion, for early termination involving payment of salary and
other emoluments in lieu of notice. When determining leaving arrangements for an Executive Director, the Committee takes into account any
contractual agreements including the provisions of any incentive arrangements, typical market practice and the performance and conduct of
the individual. The table below summarises how the awards under incentive plans are typically treated in specific circumstances, with the final
treatment remaining subject to the Committee’s discretion. When considering the use of discretion, the Committee reviews all potential
incentive outcomes to ensure that any application of discretion is fair both to shareholders and to participants.
Plan Scenario Timing and calculation of payment/vesting
Annual Bonus Plan (‘ABP’)
All leavers (except for reasons set out below) No bonus is paid and deferred share awards will lapse.
Death The Committee may determine that an Executive Director is
eligible to receive a bonus for the year.
The Committee will determine the level of bonus taking into
account performance.
Outstanding deferred share awards will vest in full – or to a
lesser extent as determined by the Committee – on the
normal vesting date, although the Committee has discretion
to accelerate vesting.
Ill-health, injury, disability, redundancy,
retirement, the sale or transfer of their
employing entity out of the Group, or any
other reason at the Committee’s absolute
discretion (‘Good Leaver’)
Change of control The Committee will assess the most appropriate treatment for
the outstanding bonus period according to the
circumstances. Deferred share awards will vest in full.
Performance Share Plan
(‘PSP’)
All leavers (except for reasons set out below) Awards lapse
Death Awards will vest immediately to the extent determined by the
Committee, taking into account the extent to which the
performance conditions have been met and, if the Committee
so determines, the period of time elapsed since grant.
Ill-health, injury, disability, redundancy,
retirement, the sale or transfer of their
employing entity out of the Group, or any
other reason at the Committee’s absolute
discretion (‘Good Leaver’)
Awards will vest on the original vesting date, or, if the
Committee so determines, as soon as practicable after the
date of cessation. The extent to which awards vest in these
circumstances will be determined by the Committee, taking
into account the extent to which the performance conditions
have been satisfied, and, unless the Committee determines
otherwise, the period of time from the date of grant up to the
date of cessation.
Change of control Awards vest immediately, subject to performance, and will be
pro-rated for time (based on the proportion of the vesting
period elapsed) unless the Committee determines otherwise.
Alternatively, awards may be exchanged for new equivalent
awards in the acquirer where appropriate.
In respect of vested PSP awards that are still subject to a holding period, awards will normally be released at the end of the holding period.
However, the Committee has discretion to determine otherwise, taking into account the circumstances at the time.
Change of control
The CFO’s Letter of Appointment (‘Contract’) provides that, in the event of a change of control of the Company, she is entitled to terminate her
employment with the Company with 30 days’ prior notice at any time within six months after the change in control if she has reasonable
grounds to contend that the change in control has resulted, or will result, in the diminution of her powers, duties or functions in relation to the
Group. If her contract is terminated in the event of the change of control, she can seek a payment from the Company in settlement of all and
any claims arising in those circumstances. The amount of the payment (subject to deduction of income tax) will be equal to the sum total of
her basic salary, the bonus paid to the Executive Director in the calendar year immediately preceding such termination and any retained bonus
approved but unpaid for the year immediately prior to the year in which the Executive Director’s contract was terminated. Reflecting current
practice, the CEO’s contract does not have a similar provision.
93Strategic Report | Directors’ Report | Financial Statements
Treatment of incentives on a change of control is set out in the table on page 92. In the event of a merger, demerger, delisting, special
dividend or other event which may, in the opinion of the Committee, affect the current or future value of the Company’s shares, the
Committee may allow DBP and PSP awards to vest on the same basis as for a change of control.
Non-Executive Director letters of appointment
The Non-Executive Directors have Letters of Appointment, the terms of which recognise that their appointments are subject to the
Company’s Articles of Association and their services are at the direction of the shareholders.
All Non-Executive Directors submit themselves for election at the AGM following their appointment and, in line with the Company’s Articles of
Association and the Code, each Director retires at each subsequent AGM and offers him or herself for re-election as appropriate.
Non-Executive Directors are not entitled to any payment in lieu of notice. The Letters of Appointment are available for shareholders to view at
the AGM and at the Company’s registered office during normal office hours.
The table below shows the appointment and expiry dates for the Non-Executive Directors:
Name Effective date of appointment Expiry of appointment
John Amaechi 1 February 2021 26 January 2023
Sly Bailey 17 May 2013 26 January 2023
Paul Drechsler 1 May 2020 26 January 2023
Linda Hickey 1 February 2021 26 January 2023
Gary Kennedy 20 November 2008 26 January 2023
Anne O’Leary 1 February 2021 26 January 2023
Helen Rose 11 April 2018 26 January 2023
Helen Weir
1
1 February 2020 31 December 2022
1. Helen Weir will step down as Non-Executive Director on 31 December 2022.
Development and application of the Remuneration Policy
The Committee receives independent advice from its independent remuneration advisors, with independently sourced data to assist the
Committee in setting and applying the Remuneration Policy. The CEO, CFO and Chief People Officer attend meetings upon invitation. The
Committee was mindful of managing any conflicts of interest in preparing the 2023 Remuneration Policy and no individual was involved in
determining his/her own arrangements.
Consideration of wider employee views
The Committee considers pay and employment conditions elsewhere in the Group when determining pay for Executive Directors. The Chief
People Officer makes regular presentations to the Committee on the remuneration structures for both weekly paid and salaried colleagues,
the salary review process for the wider colleague base as well as benefit and pension arrangements.
In considering increases to the base salary for Executive Directors, the Committee takes the Group-wide annual salary review process into
account.
The Board recognises the value of listening to colleagues’ views and perspectives on a range of business matters, and has established multiple
channels to ensure effective two-way engagement with our wider colleague base. These include the role of our Workforce Engagement
Director, who has been designated responsibility for engaging with colleagues and bringing their voice into the boardroom. We have also
established a number of colleague listening groups and recently set up further local colleague forums and a cross functional colleague forum.
These forums meet with the Chief People Officer on a regular basis and during 2022, the cross functional colleague forum was attended by
Linda Hickey, our Remuneration Committee Chair, who presented on Greencore’s remuneration philosophy and principles, as well as the
proposed updates to the executive remuneration policy and participated in a question and answer session. Colleagues attending that session
welcomed the open and transparent disclosure. This feedback was relayed to the Remuneration Committee and taken into account – along
with the feedback from engagement with our shareholders – when finalising the policy proposals being tabled for shareholder approval at the
2023 AGM.
In addition, employees are encouraged to become shareholders under the Company’s all employee share plans and once an employee
becomes a shareholder, he or she can vote on resolutions in respect of Directors’ remuneration (including the advisory shareholder vote on
the Group’s remuneration policy at least every four years or earlier if there is a proposed material change to the approved policy) along with
any other resolutions put before the AGM.
94 Greencore Group plc Annual Report and Financial Statements 2022
Report on Directors’ Remuneration continued
2023 Remuneration Policy continued
Consulting with our shareholders
The Committee is dedicated to ensuring open dialogue with shareholders in relation to remuneration. In advance of any proposal to amend
the Group’s remuneration policy (excluding any non-material changes), the Committee, led by the Committee Chair, will liaise with key
shareholders and proxy advisory firms to discuss the proposed amendments and receive their feedback on these amendments to factor into
the Committee’s decision making. During the year, the Committee Chair engaged with shareholders on the voting outcome at the 2022 AGM
and the proposed 2023 Remuneration Policy and communications were issued to shareholders holding approximately 83% of the Company’s
issued share capital. Consultations were held with shareholders representing c.22% of issued share capital. The Committee welcomed the
feedback received through this process and the indications of broad support for the proposed 2023 Remuneration Policy that is now being
put to a shareholder vote at the AGM.
The sections of this 2023 Remuneration Policy entitled (a) Remuneration principles; (b) Executive Directors’ Remuneration Policy table; (c)
Discretion; (d) Selection of performance measures; (e) Non-Executive Directors’ remuneration policy; (f) Remuneration policy for new hires;
(g) Remuneration opportunities in different performance scenarios; (h) Executive Director service contracts; (i) Policy on payments to
Executive Directors leaving the Group; (j) Change of control; (k) Non-Executive Director letters of appointment; (l) Development and
application of the Remuneration Policy; (m) Consideration of wider employee views; and (n) Consulting with our shareholders, relate to the
remuneration of the directors of Greencore for the purposes of Section 1110M of the Companies Act 2014 with which the Group complies on
a voluntary basis.
95Strategic Report | Directors’ Report | Financial Statements
The Company is putting the 2023 Remuneration Policy to an advisory shareholder vote at the AGM of the Company to be held on 26 January
2023. If approved, the 2023 Remuneration Policy will take effect from the date of the AGM and apply for a period of up to three years. The
2023 Remuneration Policy is set out on pages 86 to 94.
As an Irish incorporated company, Greencore is not subject to UK executive remuneration requirements as set out in the Large and
Medium-Sized Companies and Groups (Accounts and Reports) Regulations 2008, as updated. The EU Shareholder Rights’ Directive II
(‘SRD II’) requirements only apply to companies whose shares are admitted to trading on an EU regulated market, which, following Brexit,
does not include Greencore as we are solely listed on the London Stock Exchange. Nonetheless, as a matter of good practice and in
order to ensure transparency to all of our stakeholders, we have sought to comply with both regulations on a voluntary basis in respect of
the members of the Board.
FY22 remuneration outcomes
FY22 Annual Bonus Plan (‘ABP’)
The maximum annual bonus opportunity of 150% of basic salary for the Chief Financial Officer (‘CFO’) was based on a mix of financial
elements (weighted 75% of the bonus) and personal and strategic objectives (weighted 25% of the bonus) for FY22. Neither Patrick Coveney
(who resigned in FY22) nor Dalton Philips (whose appointment as Executive Director and Chief Executive Officer (‘CEO’) was effective shortly
before the end of FY22) were eligible to participate in the FY22 ABP.
The financial performance targets and actual performance outcomes for FY22 are set out in the table below. Further details on the
achievement of personal and strategic objectives are set out on pages 100 and 101.
Performance targets
Measure
Weighting
(% of total)
Threshold
(0% payout)
Target
(50% payout)
Stretch
(100% payout)
Actual FY22
outturn/
achievement
Resulting bonus
outcome
Adjusted Operating Profit 50% £72.0m £76.0m £84.0m £72.2m 1.25% out of 50%
Free Cash Flow 25% £45.9m £48.5m £53.5m £58.7m 25.00% out of 25%
Financial element 75% 26.25% out of 75%
Personal and strategic objectives 25% 20.00% out of 25%
Total 100% 46.25% out of 100%
Discretion applied by the Committee n/a
Payout 46.25% out of 100%
FY20 Performance Share Plan (‘PSP’)
The FY20 PSP award is based 1/3rd on Adjusted EPS growth, 1/3rd on ROIC and 1/3rd on relative TSR performance conditions.
The performance targets were not met and awards will lapse in full. Target and actual outturns are set out in the table below.
Measure
Weighting
(% of award) Performance targets Actual FY22 outturn
Vesting
(% of award)
Adjusted EPS growth 1/3rd 5% to 15% p.a. (16.8)% p.a. 0%
ROIC 1/3rd 13% to 15% 8.4% 0%
Relative TSR vs. bespoke group of sector peers 1/3rd Median to upper quartile Below median 0%
Total 0%
FY21 Performance Share Plan (‘PSP’)
As previously reported, the FY21 PSP award comprised three tranches, vesting subject to absolute TSR performance over periods of one, two and
three years from the date of grant on 8 January 2021. The Year 1 tranche lapsed in full and, while the Year 2 tranche is still in flight at the date of this
Report, the performance period has largely been completed. Based on performance to date, the Year 2 tranche is also expected to lapse in full.
The purpose of this section is to provide an overview of the Group’s performance in FY22, as well as
the remuneration received by our Executive Directors. Full details can be found in the Annual Report
on Remuneration on pages 97 to 108.
Remuneration
at a glance
96 Greencore Group plc Annual Report and Financial Statements 2022
Report on Directors’ Remuneration continued
Remuneration at a glance continued
Implementation of the 2023 Remuneration Policy in FY23
Element of pay Implementation for FY23
Fixed remuneration
Base salary Dalton Philips was appointed on a salary of €700,000 and which will not be increased for FY23.
As explained at the start of this Report, Emma Hynes received a 3% salary increase (workforce median: 4.8%) effective
from 1 October 2022. Her FY23 salary is €490,280.
Pension In line with the 2023 Remuneration Policy, Dalton Philips and Emma Hynes each receive a pension contribution of 8%
of salary, which is in line with the pension contribution currently available to the wider colleague base.
Benefits In line with Policy.
Variable pay
Annual Bonus Plan
(‘ABP’) and Deferred
Bonus Plan (‘DBP’)
No change to maximum opportunity: 150% of salary for CEO and CFO.
The performance measures for FY23 are: 50% Adjusted Operating Profit, 25% Free Cash Flow and 25% personal and
strategic objectives. 50% of any bonus earned will be deferred into shares for three years under the DBP, consistent
with the 2023 Remuneration Policy (and unchanged from the 2020 Policy).
Performance Share
Plan (‘PSP’)
CEO – 175% salary
CFO – 150% salary
The Committee remains mindful of the risk that ongoing market volatility could generate windfall gains for PSP awards
over the vesting period. For the FY23 cycle, the Committee has decided that assessing for windfall gains at vesting
(rather than making an ex ante reduction to the award opportunity) is more appropriate in the specific circumstances
for the Group, notably the recent leadership transition (this being the first PSP award for the CEO). The Committee’s
view is that it also is in all stakeholders’ interests that participants (including both Executive Directors) are appropriately
incentivised to deliver sustainable value creation, notwithstanding the ongoing challenges of our operating
environment.
PSP awards will continue to be based on three year performance against three performance measures: 1/3 cumulative
Adjusted EPS, 1/3 ROIC and 1/3 relative TSR vs. a bespoke group of sector peers.
PSP awards granted to Executive Directors are subject to a three year performance period and an additional two year
holding period. Vested awards may not be sold during the holding period except to cover tax liabilities.
Safeguards and risk
management
Malus and clawback provisions apply to the ABP and the PSP both prior to vesting and for a period of two years
post-vesting. This enables the Company to withhold payment/vesting of any sums and/or recover sums paid on the
occurrence of specific trigger events, including but not limited to misconduct, a material misstatement of the
Company’s audited results, a material failure of risk management, a material breach of health and safety regulations, or
serious reputational damage.
97Strategic Report | Directors’ Report | Financial Statements
As set out on page 86, the 2023 Remuneration Policy will be subject to an advisory shareholder vote at the AGM of the Company to be held
on 26 January 2023. The Annual Report on Remuneration will also be subject to an advisory shareholder vote at the AGM. Where information
has been audited, this has been stated. All other information in this report is unaudited.
Role of the Committee
The Committee’s collective role includes ensuring that the Group’s remuneration arrangements are aligned with the Group’s strategic
priorities. The Terms of Reference of the Committee include the determination of the remuneration packages for Executive Directors, the
Group Company Secretary and other members of the senior management team, as well as fees for the Board Chair. The Board Chair and the
Executive Directors determine the fees for the Non-Executive Directors.
The Terms of Reference for the Committee are reviewed annually and are updated as appropriate and are available under the Governance
section of the Group’s website, www.greencore.com.
Committee membership
The Committee is currently comprised of three Non-Executive Directors, all of whom are considered by the Board to be independent:
Committee member Date appointed
Attendance at scheduled
Committee meetings
during FY22
Linda Hickey 1 February 2021 (Appointed to the Committee and as Committee Chair on 1 February 2021) 4/4
Paul Drechsler Appointed on 14 May 2020 4/4
Anne O’Leary Appointed on 21 June 2022 2/2
Gordon Hardie (Appointed on 1 February 2020 and stepped down on 3 May 2022) 1/1
Gary Kennedy (Appointed on 11 March 2010 and stepped down on 21 June 2022) 2/2
Gordon Hardie stepped down from the Committee and the Board on 3 May 2022. Gary Kennedy stepped down from the Committee on
21 June 2022, with Anne O’Leary joining the Committee on this date. I would like to take this opportunity to thank Gordon and Gary for their
dedication and contribution to the Committee during their respective tenures.
Each of the Committee members has extensive experience on remuneration related matters, gained from both their executive careers and
from their experience on remuneration and compensation committees of other companies. Further details on the Committee members’
qualifications and experience are set out on pages 54 and 55. The Group Company Secretary or their nominee acts as Secretary to the
Committee. During the year, the Chief Executive Officer (‘CEO’), Chief Financial Officer (‘CFO’) and the Chief People Officer attended meetings
on an ad hoc basis at the invitation of the Committee and provided information and support as requested. However, no individual was present
when their own remuneration was being discussed.
Committee effectiveness
As noted on page 71, Independent Audit Limited (‘Independent Audit’), an external consultancy firm was engaged to conduct the FY21 annual
evaluation of the Board and Board Committees which was completed in January 2022. The FY22 review of the operation, performance and
effectiveness of the Committee was conducted using an online questionnaire via Independent Audit’s ‘Thinking Board Evaluator’ portal and a
performance evaluation discussion was included on the agenda for the Committee at its September 2022 meeting, supported by an analysis
of how the Committee was performing against key areas of its Terms of Reference. Both reviews confirmed that the Committee continues to
operate effectively and efficiently and has the skills and expertise required in order to perform its role appropriately. Target setting was flagged
by some Committee members as a key area of focus for FY23, particularly in the context of the ongoing uncertainty and volatility in the
Group’s operating environment. The Committee remains mindful that targets should be stretching (to reinforce alignment with stakeholder
interests and incentivise outperformance) and reflect external market conditions. It is in this context that targets for the FY23 incentive cycles
will be set – and in which future targets will continue to be considered.
Advisors
The Committee’s appointed independent advisors during the year were Ellason LLP (‘Ellason’). Ellason attends Committee meetings on an ad
hoc basis and provides advice on remuneration for Executive Directors, benchmarking analysis, and updates on market developments and
best practice. Ellason is a member of the Remuneration Consultants Group and adheres to its code of conduct. The Committee reviews the
performance of its advisors annually and is satisfied that Ellason provided independent and objective remuneration advice to the Committee,
The following section sets out our Annual Report on Remuneration, outlining decisions made by the
Committee in relation to Directors’ remuneration in respect of FY22 and how the Committee intends
to apply the proposed Policy (‘2023 Remuneration Policy’) for FY23.
Annual Report
on Remuneration
98 Greencore Group plc Annual Report and Financial Statements 2022
Report on Directors’ Remuneration continued
Annual Report on Remuneration continued
noting that Ellason does not have any personal connections to Greencore or any individual Director. Services were provided on a time and
materials basis. The fees paid to Ellason in respect of work carried out for the Committee in the year under review amounted to £77,885.
Ellason did not provide any other services to the Company during the year.
Key activities during the year
During FY22, the Committee held four scheduled meetings, as well as three additional ad hoc meetings. All Committee members attended all
scheduled and unscheduled meetings for which they were eligible to attend. Details of attendance at scheduled meetings can be found on
page 97. The key activities and matters discussed at Committee meetings during FY22 included:
• Engaging with, and reviewing feedback received from, shareholders on the 2022 AGM outcome;
• Reviewing the external remuneration landscape generally and considering best practice corporate governance;
• Approval of opportunities/award levels and performance targets for the FY22 Annual Bonus Plan and PSP awards;
• Reviewing and approving performance and outturns under the FY21 ABP, the FY19 PSP awards, and Tranche 1 of the FY21 PSP awards
(which lapsed in full during FY22);
• Reviewing and approving the FY21 Report on Directors’ Remuneration;
• Approving the remuneration arrangements for the outgoing CEO and recommending to the Board the fee arrangements for the Executive
Chair role and the exertion fee for the Board Chair;
• Reviewing workforce remuneration structures, pensions and the salary review process;
• Reviewing the Irish and UK ShareSave Schemes activities;
• Designing, reviewing and seeking shareholder feedback on the 2023 Remuneration Policy;
• Determining and recommending to the Board the remuneration arrangements for the incoming CEO and Board Chair;
• Reviewing the service contracts and notice period for the senior management team;
• Considering how ESG objectives can be reflected in the remuneration framework; and
• Reviewing the Committee’s Terms of Reference and the Committee’s effectiveness.
Shareholder voting
The table below shows the voting outcome of the resolutions proposed at the 2020 and 2022 AGMs in relation to the 2020 Remuneration
Policy and the FY21 Annual Report on Remuneration.
Resolution For Against Total votes cast Votes withheld
2020 Remuneration Policy (2020 AGM)
1
68.44% 31.56% 332,036,575 8,594,083
FY21 Annual Report on Remuneration (2022 AGM)
2
53.71% 46.29% 291,695,180 40,244,795
1. The voting outcome for the 2020 Remuneration Policy related primarily to the pension arrangement for the former CEO. Pension contributions for the incumbent
directors (and future hires) are aligned with those provided to the wider workforce. This change has been reflected in the 2023 Remuneration Policy being put to
shareholders for approval at the 2023 AGM.
2. The Committee’s engagement with shareholders following the vote on the FY21 Annual Report on Remuneration is discussed in the Chair’s introductory statement.
Single figure of total remuneration for Executive Directors (audited)
The following table sets out the single figure of total remuneration for Executive Directors for FY22 and FY21.
Salary
(‘000)
Pension
(‘000)
Benefits
4
(‘000)
Total fixed
(‘000)
Annual
bonus
– cash
(‘000)
Annual
bonus
– deferred
share
award
5
(‘000)
PSP
6
(‘000)
Total
variable
(‘000)
Total
remuneration
(‘000)
Total fixed
vs. Total
remuneration
Total variable
vs. Total
remuneration
Patrick FY22 €422 €114 €40 €576 – – – –
€576 100% 0%
Coveney
1
FY21 €851 €251 €64 €1,166 €0 €0 €0 €0
€1,166 100% 0%
Emma FY22 €476 €38 €38 €552 €165 €165 €0 €330
€882 63% 37%
Hynes FY21 €476 €38 €38 €552 €0 €343 €0 €343
€895 62% 38%
Gary FY22 €344 – – €344 – – – –
€344 100% 0%
Kennedy
2
FY21 – – – – – – – –
– – –
Dalton FY22 €13 €1 €1 €15 – – – –
€15 100% 0%
Philips
3
FY21 – – – – – – – –
– – –
1. Patrick Coveney resigned from his role as Executive Director and CEO on 30 March 2022. His FY22 salary, pension and benefits relate to the period 25 September 2021 to
30 March 2022.
2. Gary Kennedy was appointed Executive Chair on 31 March 2022. He received an additional fee to reflect the additional time commitment and the responsibilities
associated with this appointment. Gary Kennedy was not eligible to participate in any performance based pay. The figure shown above relates to the total fee received
during the period from 31 March 2022 to 25 September 2022, when he reverted to the role of Non-Executive Chair following the appointment of Dalton Philips as
Executive Director and CEO on 26 September 2022.
3. Dalton Philips was appointed to the Board as Executive Director and CEO on 26 September 2022. His FY22 salary, pension and benefits relate to the period 26 September
2022 to 30 September 2022.
4. Benefits include car allowance as well as medical insurance.
5. Emma Hynes was awarded an annual bonus of 46.25% of the maximum opportunity for FY22, of which 50% is to be deferred in shares for three years (FY21: 100% deferred),
as set out on pages 99 to 101. Patrick Coveney was not entitled to a bonus for FY22. His FY21 bonus awarded was €612k, to be deferred in shares. However, following his
resignation, the grant of deferred shares in December 2021 was not made and therefore he received no bonus (in cash or shares) in respect of FY21 performance.
6. As set out on page 102, the threshold performance hurdles for the FY20 PSP were not achieved and this award will lapse in May 2023. The performance period for the
Year 2 tranche of the FY21 PSP ends on 8 January 2023. Based on the share price at the date of signing this Report, the minimum performance hurdle for the Year 2
tranche has not been achieved, therefore an estimated vesting figure of 0% has been included.
99Strategic Report | Directors’ Report | Financial Statements
Single figure of total remuneration for Non-Executive Directors (audited)
The following table sets out the single figure of total remuneration for Non-Executive Directors in FY22 and FY21.
Base fee Additional fees
1
Total fees
John Amaechi
2
FY22 €78,000 – €78,000
FY21 €52,000 – €52,000
Sly Bailey (Senior Independent Director and Chair of Nomination
and Governance Committee)
FY22 €78,000 €16,500 €94,500
FY21 €78,000 €16,500 €94,500
Paul Drechsler FY22 €78,000 – €78,000
FY21 €78,000 – €78,000
Gordon Hardie
3
FY22 €46,091 – €46,091
FY21 €78,000 – €78,000
Linda Hickey
4
(Chair of the Remuneration Committee) FY22 €78,000 €12,000 €90,000
FY21 €52,000 €8,000 €60,000
Gary Kennedy
5
(Board Chair) FY22 €40,195 €253,892 €294,087
FY21 €78,000 €247,000 €325,000
Anne O’Leary
6
FY22 €78,000 – €78,000
FY21 €52,000 – €52,000
Helen Rose FY22 €78,000 – €78,000
FY21 €78,000 – €78,000
Helen Weir
7
(Chair of the Audit and Risk Committee) FY22 €78,000 €16,500 €94,500
FY21 €78,000 €11,200 €89,200
1. As set out in the 2020 Remuneration Policy and the 2023 Remuneration Policy (which is being put to shareholders for approval), if a Non-Executive Director is Senior
Independent Director and is also Chair of the Nomination and Governance Committee, the additional fee is capped at the additional Senior Independent Director fee.
Therefore, Sly Bailey does not receive a fee for her role as Chair of the Nomination and Governance Committee.
2. John Amaechi was appointed to the Board on 1 February 2021. John’s FY21 fees relate to the period 1 February 2021 to 24 September 2021.
3. Gordon Hardie stepped down from the Board and as Non-Executive Director on 3 May 2022. Gordon’s FY22 fees relate to the period 25 September 2021 to 3 May 2022.
4. Linda Hickey was appointed to the Board and as Chair of the Remuneration Committee on 1 February 2021. Linda’s FY21 fees relate to the period 1 February 2021 to
24 September 2021.
5. The figures report only the fees paid to Gary Kennedy in his capacity as Non-Executive Chair from 25 September 2021 to 30 March 2022 and from 26 September 2022 to
30 September 2022. For the period 1 December 2021 to 30 March 2022, Gary Kennedy received an additional exertion fee of €32,000 per month to reflect his more
active role in the business and the associated additional time commitment, before he assumed the role of Executive Chair. He was appointed to the role of Executive
Chair on 31 March 2022 and the fees paid for this period are shown in the table on page 98. He resumed the role of Non-Executive Chair on 26 September 2022.
6. Anne O’Leary was appointed to the Board on 1 February 2021. Anne’s FY21 fees relate to the period 1 February 2021 to 24 September 2021.
7. Helen Weir became Chair of the Audit and Risk Committee with effect from 26 January 2021.
Notes to the single figure table (audited)
Base salary
The FY22 salaries were €850,705 for Patrick Coveney (unchanged since 1 October 2019), €476,000 for Emma Hynes (as set on appointment
on 19 May 2020) and €700,000 for Dalton Philips (as set on appointment on 26 September 2022).
Pension
Emma Hynes and Dalton Philips receive a pension contribution equivalent to 8% of salary, which remains in line with the contribution to the
wider colleague base.
As disclosed in the FY21 Annual Report on Remuneration, Patrick Coveney’s non-pensionable cash allowance was being reduced by 5%
annually from 35% of pensionable earnings to 15% of pensionable earnings on a phased basis over four years, commencing on 1 April 2020.
Therefore, Patrick Coveney’s non-pensionable cash allowance for the period 1 April 2021 to 30 March 2022 was 25% of pensionable earnings.
Patrick is also a deferred member of the Group’s Irish Defined Benefit Pension Scheme which closed to future accrual with effect from
31 December 2009. The value of the scheme benefits for Patrick was £52,027 as at 30 March 2022. His normal retirement age under the
scheme is 60 and he was not entitled to any augmentation of benefit in the event that he retired early.
FY22 Annual Bonus Plan (‘ABP’)
The maximum bonus opportunity for Emma Hynes in FY22 was 150% of salary. Following his resignation, Patrick Coveney was not eligible to
receive an annual bonus for FY22. The annual bonus is based on the achievement of stretching short term financial targets (75% of maximum
bonus opportunity) as well as personal and strategic objectives (25% of maximum bonus opportunity). The mix of measures reflects the
Committee’s aim of providing an appropriate balance between incentivising the achievement of key financial targets and specific personal and
strategic objectives.
Performance targets and outturns are set out in the tables overleaf. Both Adjusted Operating Profit and Free Cash Flow are Group KPIs referred
100 Greencore Group plc Annual Report and Financial Statements 2022
Report on Directors’ Remuneration continued
Annual Report on Remuneration continued
to as an Alternative Performance Measure (‘APM’). APMs are non-IFRS measures and are used to monitor the performance of the Group’s
operations and of the Group as a whole. Definitions and reconciliations to IFRS measures are provided in the APMs section on pages 179 to
183.
Group financial objectives FY22 (75% weighting)
Performance targets
1
Measure
Threshold
(0% payout)
Target
(50% payout)
Stretch
(100% payout)
Actual outturn/
achievement
% payout of
element
Adjusted Operating Profit (50%) £72.0m £76.0m £84.0m £72.2m 2.5%
Free Cash Flow (25%) £45.9m £48.5m £53.5m £58.7m 100.0%
1. There is a straight-line scale between threshold and target, and between target and stretch.
In keeping with the Committee’s usual practice, the formulaic outcome for the financial element of the FY22 ABP was reviewed in the context
of the stakeholder experience and wider performance context for the Group over the course of the year.
In determining that the formulaic outcome was a fair reflection of underlying business performance, and hence no adjustment was necessary,
the Committee took into consideration the broader context of the outturns. The Committee concluded that the AOP outturn, although only
incrementally ahead of the threshold set at the start of FY22, nevertheless represented a solid performance in the context of the unbudgeted
headwinds faced in the year. These included the impact of inflation, labour availability and supply chain disruption, as well as the operational
disruption arising from the weather conditions experienced this summer. The Committee also reviewed the underlying drivers of the excellent
Free Cash Flow outturn for the year under review and was satisfied that the net effect of unbudgeted headwinds and tailwinds (compared to
the assumptions on which the targets were based at the start of the year) did not merit adjustment. As a result, and to ensure that the bonus
continues to drive and reward the right behaviours as well as performance, the Committee decided not to make any adjustments to the
formulaic outcome of the financial element for the FY22 ABP.
Personal and strategic objectives for the CFO in FY22
Strategic priorities
Growth Relevance Differentiation
The Committee believes in the importance of incorporating robust measures that fall outside the strict financial performance measures, but
nonetheless draw a sharp focus on issues that are demonstrably linked to the protection and creation of value.
The personal and strategic objectives comprised seven categories aligned to short-term priorities and non-financial KPIs for the Group, and
included the following objectives:
Met?
Category Objective(s) set No Partly Fully Commentary
Organisation
Support the leadership transition and collaborate
effectively with other senior leaders to ensure
continuity for stakeholders in FY22
✓
Provided outstanding support
to the Executive Chair during
FY22. Supported continuity of,
and contributed effectively to,
Group leadership; and was a key
stakeholder in the recruitment
of the CEO
Risk
Continue to focus on reset of Risk and Internal
Audit processes
✓
Significant progress made on the
risk agenda, as endorsed by the
Audit and Risk Committee. Agreed
team structure now in place, as
are effective processes to drive
focus within teams
Embed risk management as part of emerging
organisation design, increasing the profile of,
and accountability for, risk management within
functional teams
✓
Embed appropriate team structure
✓
Capital management
Continued focus on deleverage and balance
sheet strengthening
✓
Fully delivered the objectives set,
with particularly strong outcomes
in relation to progress on leverage
reduction for the business and
discipline around cash generation
101Strategic Report | Directors’ Report | Financial Statements
Met?
Category Objective(s) set No Partly Fully Commentary
Sustainability
Ensure carbon data methodology and data collection
process is robust enough to anchor our ESG roadmap.
Address performance issues and capability requirements
to drive forward our Sustainability agenda
✓
Progress was made during the
year in driving forward our agenda
for what is a principal risk for the
Company. However, the
objectives were not met in full,
with this outcome reflected in
the overall assessment
Establish robust Internal Carbon Pricing (“ICP”) model to
underpin ESG cost of future investment decisions
✓
Better Greencore
Take a leading role in the planning and delivery of Better
Greencore:
Sponsored workstreams
exceeded objectives set. Good
progress has been made on the
reset of the finance organisation,
but this is not yet completed
• Ensure sponsored workstreams deliver against project
expectations
✓
• Reset finance organisation in line with agreed
operational targets
✓
External
Effectively build and manage new relationships with
shareholders and other external stakeholders to facilitate
continuity during the leadership transition in FY22
✓
Widely respected by the
investment community, receiving
positive feedback from
stakeholders and exceeding
expectations against these
objectives
Deliver a clear and effective market communication
strategy around financial resilience and Better Greencore
✓
Financial delivery
Hold business to account on key deliverables
including inflation recovery
✓
Held operational and commercial
teams to account in supporting
successful recovery of inflation.
In conjunction with other key
deliverables, this was essential
as part of the restoration of our
economic model
Outcomes and discretion
As described above, the Committee carefully assessed the performance of the CFO against the personal and strategic measures set, in line
with normal practice. As a result of the continued strong and valued contribution of the CFO against these objectives, the Committee
determined that 80% of this element had been achieved (i.e. 20% of the maximum bonus opportunity).
Overall, the formulaic assessment of targets warranted a bonus payout of 46.25% of maximum.
The Committee then reviewed this outcome in the context of the Group’s underlying performance and the stakeholder experience more
generally. In determining that the formulaic outcome was appropriate (and that no exercise of discretion was necessary to adjust the ABP
payout for these broader considerations), the Committee took into account Greencore’s resilient operational and commercial progress against
key elements of its strategy during the year, and the continued focus by management on putting our colleagues first (further details on which
are set out on page85). The Committee concluded that the formulaic outcome appropriately reflected that good performance outcomes had
been delivered and the right behaviours demonstrated in doing so; aligning with our corporate values, and our remuneration principles of
‘pay-for-performance’ and ‘alignment and fairness’.
Long term incentives
FY20 PSP awards
On appointment in May 2020, Emma Hynes received awards under the PSP (‘FY20 PSPs’) as set out in the table below:
Executive Director Date of grant
Number of
awards granted
Share price on
date of grant
Face value on
date of grant
Awards as % of
annualised salary
Vesting
date
Holding period
expiry
Emma Hynes 22 May 2020 150,000 £1.370
1
£205k c.50% 22 May 2023 22 May 2025
1. Average share price for the three days commencing on 19 May 2020.
102 Greencore Group plc Annual Report and Financial Statements 2022
Report on Directors’ Remuneration continued
Annual Report on Remuneration continued
The FY20 PSPs were subject to Adjusted EPS, ROIC and TSR performance targets measured over the period FY20 to FY22, using FY19 as
the base year. Performance targets for the FY20 awards were set taking into account a range of reference points, including the Group’s
strategic plan.
The performance targets were not met, and therefore the awards granted to Emma Hynes will lapse in full. As Dalton Philips joined the Board
during FY22, he did not hold any awards under the FY20 PSP. Patrick Coveney’s FY20 PSP award lapsed on leaving the Company. The targets
and performance outturns are set out in the table below:
Measure Weighting (% of award) Performance targets Actual FY22 outturn Vesting (% of award)
Adjusted EPS growth 1/3rd 5% to 15% p.a. (16.8)% p.a. 0%
FY22 ROIC 1/3rd 13% to 15% 8.4% 0%
Relative TSR vs. bespoke group of sector peers 1/3rd Median to upper quartile Below median 0%
Total
0%
Each of the financial performance measures under the FY22 ABP and the FY20 PSP are Key Performance Indicators (‘KPIs’) as set out
on pages 36 and 37. The KPIs are non-IFRS measures, referred to as APMs, and are used to monitor the performance of the Group’s
operations and the Group as a whole. Definitions of the APMs and reconciliations to IFRS measures are provided in the APMs section
from pages 179 to 183.
FY21 PSP awards
Emma Hynes received awards under the FY21 PSP as set out in the table below. As Dalton Philips joined the Board at the end of FY22, he did
not participate in the FY21 PSP grant. Patrick Coveney’s FY21 PSP award lapsed on his leaving the Company.
Executive Director Date of grant
Number of awards
granted
Share price on
date of grant
1
Face value
on grant
Awards as % of
annualised salary
2
Vesting date
3
Holding period
expiry
Emma Hynes 8 January 2021 523,620 £1.122 £588k c.137% See footnote 8 January 2026
1. Average share price for the three days commencing on 5 January 2021.
2. Calculated based on full eligible FY21 salary and the face value on grant, which has then been converted into euro using the exchange rate for the date of grant of
£1:€1.11. Source: Bloomberg.
3. 15% of the awards were due to vest on 8 January 2022, 25% on 8 January 2023 and 60% on 8 January 2024. Awards may be sold only to cover tax liabilities. Any shares
vesting (net of tax) must be held until the fifth anniversary of grant. Tranche 1 has since lapsed and Tranche 2 is expected to lapse in January 2023 (see next table).
As set out in the FY21 Annual Report on Remuneration, the Committee simplified its approach for the FY21 PSP award, with vesting of 100% of
the award based on absolute TSR targets over a three year period commencing on the date of grant. These targets are set out below:
Tranche
Weighting
(% of award)
Return Index
1
(‘RI’) hurdle Status Measurement basis
2
Year 1 15 165p Lapsed
3
Average RI for the month preceding the first anniversary of grant
Year 2 25 219p Expected to lapse
4
Average RI for the month preceding the second anniversary of grant
Year 3 60 291p Inflight Average RI for the month preceding the third anniversary of grant
1. Share price growth plus dividends (assumed reinvested on the ex-dividend date).
2. Both Absolute TSR and Relative TSR assessments will be based on the average Return Index for the month preceding the end of the relevant performance period.
3. The Year 1 tranche lapsed in full.
4. Based on the share price as at the date of signing this Report, the performance hurdle for the Year 2 tranche is not expected to be achieved.
Vesting of the awards is also subject to two underpins being met. The number of shares vesting under each tranche will be reduced by 50% if
the Group’s Relative TSR performance is below the median of its TSR comparator group over the relevant performance period. In addition, a
discretionary assessment of Greencore’s underlying performance will be undertaken by the Committee. Details of the TSR comparator group
and factors that may be considered when assessing the performance underpin are set out on page 100 of the FY21 Annual Report and
Financial Statements. Any shares that vest will be required to be held until the fifth anniversary of grant, ensuring alignment with long term
shareholders and the delivery of sustainable long term returns.
FY22 PSP awards
Emma Hynes received awards under the FY22 PSP as set out in the table below. As Dalton Philips joined the Board at the end of FY22, he did
not participate in the FY22 PSP grant. Patrick Coveney was not eligible for an award having tendered his resignation prior to the date of grant.
Executive Director Date of grant
Number of
awards granted
Share price on
date of grant
1
Face value
on grant
Awards as %
of salary
2
Vesting date Holding period expiry
Emma Hynes 6 December 2021 470,079 £1.290 £607k 150% 6 December 2024 6 December 2026
1. Average share price for the three days commencing on 30 November 2021.
2. Calculated based on FY22 salary and the face value on grant, which has then been converted into euro using the exchange rate on 2 December 2021 of €1:£0.8495.
Source: Bloomberg.
103Strategic Report | Directors’ Report | Financial Statements
The performance measures are Adjusted EPS, ROIC and Relative TSR. Adjusted EPS targets for this cycle have been set (and performance will
be measured) on a three year cumulative pence basis, to reduce the sensitivity of outcomes to final year (i.e. FY24) performance alone and
better incentivise sustained EPS growth in each year of the performance period. Performance will be assessed over the period FY22 to FY24.
Full details of the performance targets were set out on page 102 of the Annual Report and Financial Statements 2021 and are summarised
below:
Measure
Weighting
(% of award)
Below threshold
(0% vesting)
Threshold
(25% vesting)
Stretch
(100% vesting)
Adjusted EPS (FY22 + FY23 + FY24) 1/3rd Below 33p 33p 41p
FY24 ROIC 1/3rd Below 10.7% 10.7% 13.0%
Relative TSR vs. bespoke group of sector peers
1
1/3rd Below median Median Upper quartile
1. A.G.Barr; Bakkavor; Britvic; Carr’s; Cranswick; Devro; Glanbia; Greggs; Hilton Food; Kerry Group; Premier Foods; and SSP Group.
As in previous years, the Committee will consider the underlying financial performance of the business as well as the value added to
shareholders in adjudicating the final PSP vesting level.
The Committee will review vesting levels at the conclusion of the performance period to ensure they reflect the underlying performance of
the business and to avoid any windfall gains for participants. The award will vest three years from the date of grant, subject to meeting the
performance conditions and continued employment, and a two year holding period will apply post vesting. Malus and clawback provisions
will apply both prior to vesting and for a period of two years post vesting, and vested awards may not be sold during the two year holding
period post vesting except to cover tax liabilities.
Deferred Bonus Plan (‘DBP’) awards granted in FY22
The following deferred bonus shares were awarded to Emma Hynes during FY22. Following his resignation, Patrick Coveney was not granted
an award. The award relates to the bonus awarded for performance during FY21.
Executive Director Date of grant
Number of
awards granted
Share price on
date of grant
1
Face value
on grant
2
Vesting date
Emma Hynes 6 December 2021 225,638 £1.290 £291k 6 December 2024
1. Average share price for the three days commencing on 30 November 2021.
2. Calculated based on FY22 salary and the face value on grant, which has then been converted into euro using the exchange rate for 2 December 2021 of €1:£0.8495.
Source: Bloomberg.
Payments for loss of office
Patrick Coveney resigned as Executive Director and CEO on 30 March 2022. As set out in last year’s Report on Remuneration, he received
salary, benefits and pension up to his date of departure. No payments were made to Patrick Coveney in connection with his resignation, other
than these contractual payments, which are disclosed in full in the single figure of total remuneration table on page 98. The grant of deferred
shares that was expected to be made in relation to the FY21 annual bonus outcome was not made and as a result he received no bonus (either
in cash or shares) in respect of FY21 performance. He was not eligible to participate in the FY22 annual bonus or receive a PSP grant in FY22
and all outstanding DBP and PSP awards lapsed in full on his resignation. There were no payments in lieu of notice, and he remains subject to
the post-employment shareholding guideline.
Payment to past Directors
No payments were made to past Directors during the year under review.
Implementation of the 2023 Remuneration Policy in FY23
Executive Director remuneration in FY23
A summary of how the proposed 2023 Remuneration Policy will be applied to Executive Director remuneration for FY23 is set out below.
Base salary
As set out on page 85, the Committee agreed that it would be appropriate to award a 3% salary increase to Emma Hynes, the first increase
since she joined Greencore in 2020. This compares to the median increase for our professional and managerial colleagues of 4.8%.
The FY23 salaries are as follows:
Executive Director Salary from 1 Oct 2022 Salary from 1 Oct 2021 Percentage increase
Emma Hynes €490,280 €476,000 3%
Dalton Philips
1
€700,000 – –
1. From date of appointment on 26 September 2022.
Pension and benefits
Emma Hynes and Dalton Philips receive a pension contribution of 8% of salary, which is in line with the pension contribution currently
available to the wider colleague base.
104 Greencore Group plc Annual Report and Financial Statements 2022
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Annual Report on Remuneration continued
Annual Bonus Plan (‘ABP’)
The ABP will be based 75% on stretching financial performance targets and 25% on personal and strategic objectives.
The financial performance element will be split between Adjusted Operating Profit (weighted 50%) and Free Cash Flow (25%). The targets for
FY23 have been set based on full year performance and have been set with reference to budget as well as broker forecasts and other external
considerations. The targets for FY23 are considered commercially sensitive but will be disclosed in full on a retrospective basis in next year’s
Annual Report on Remuneration.
The remaining 25% of the bonus is based on personal and strategic objectives to help ensure a continued focus on the short and medium
term objectives that are most critical to the successful delivery of the strategy and long term sustainable performance of the Group. For FY23,
this element will again include objectives specifically linked to the roll-out of the Group’s sustainability strategy.
The outcomes of both the financial and non-financial KPIs will be considered by the Committee when determining the overall level of bonus
payable, and the Committee retains discretion to adjust the outcomes to take into account the wider stakeholder context.
The maximum opportunity for FY23 remains unchanged at 150% of salary. A minimum of half of any bonus will be deferred in shares, vesting
after three years subject to continued employment. Both the cash bonus and deferred share awards are subject to malus and clawback
provisions.
Long term incentive
The vesting of FY23 PSP awards will continue to be based on Greencore’s three-year performance against targets set in relation to three
measures: Adjusted EPS, ROIC and Relative TSR. As in previous years, the Committee will also consider the underlying financial performance
of the business (as well as the value added to shareholders) in adjudicating the final overall PSP vesting level.
At the time of publishing this Report, the performance targets in relation to the EPS and ROIC elements of the FY23 PSP cycle have not been
finalised. In doing so, the Committee will set targets that it considers to be stretching (to reinforce alignment with stakeholder interests and
incentivise outperformance) as well as relevant and motivational in the prevailing external market environment. The targets attaching to these
elements of the PSP award will be disclosed in the RNS announcement at the time of grant (which is anticipated to be in December 2022).
The Relative TSR performance condition is unchanged from the FY22 PSP cycle. Performance will be assessed over the period FY23 to FY25,
relative to the following bespoke group of sector peers: A.G.Barr; Bakkavor; Britvic; Carr’s; Cranswick; Devro; Glanbia; Greggs; Hilton Food;
Kerry Group; Premier Foods; and SSP Group. Performance will need to be median to trigger threshold vesting (25% of that element) and at
least upper quartile to trigger full vesting of that element. For performance outcomes between threshold and maximum, the vesting
percentage will be determined on the basis of a straight line sliding scale.
Dalton Philips will receive an award in FY23 at 175% of salary, in line with the terms of his appointment and within the Policy maximum of 200%
of salary. Emma Hynes will receive an award at 150% of salary. As described on page 96, the Committee remains mindful of the risk that
ongoing market volatility could generate windfall gains for PSP awards over the vesting period. Given the specific circumstances for the Group
(notably the recent leadership transition, this being the first PSP award for the CEO) and the belief that it is in all stakeholders’ interests that all
participants are appropriately incentivised to deliver sustainable value creation in a very challenging operating environment, the Committee
shall assess for windfall gains at vesting rather than make an ex ante reduction to the award opportunity. In doing so, the Committee will
review a range of relevant reference points for Greencore’s share price performance over the vesting period and disclose the basis of its
assessment in the relevant Annual Report on Remuneration.
The award will vest three years from the date of grant, subject to meeting the performance conditions and continued employment, and a two
year holding period will apply post vesting. Malus and clawback provisions will apply both prior to vesting and for a period of two years post
vesting, and vested awards may not be sold during the two year holding period post vesting except to cover tax liabilities.
Non-Executive Director fees in FY23
Non-Executive Director fees are determined by the Board Chair and the Executive Directors, with the exception of the fee for the Board Chair,
which is determined by the Committee. Basic fees shall not exceed the limit as set out in the Articles of Association and approved by
shareholders. The fees for the Chair were reviewed in 2022, during the recruitment process for the new Chair, and the fees for Non-Executive
Directors were last reviewed in November 2021, with no changes made. The full year equivalent fees are set out in the table below:
FY23 FY22
Basic fee
Chair €78,000
€78,000
Non-Executive Director €78,000
€78,000
Additional fees
Chair (Gary Kennedy, for period 1 October 2022 to 26 January 2023) €247,000
€247,000
Chair (Leslie Van de Walle, from 1 December 2022) €172,000
n/a
Senior Independent Director €16,500
€16,500
Audit and Risk Committee Chair €16,500
€16,500
Remuneration Committee Chair €12,000
€12,000
Nomination and Governance Committee Chair €10,000
€10,000
105Strategic Report | Directors’ Report | Financial Statements
Relative importance of spend on pay
The table below illustrates shareholder distributions (i.e. dividends and share buybacks) and total employee pay for FY22 and FY21, and the
year-on-year change.
FY22
(£‘000)
FY21
(‘£000)
Percentage
change
Distribution to shareholders
1
8,800 nil n/a
Total employee pay 380,900 306,400 24%
1. The Group did not pay dividends to shareholders in FY22. On 26 July 2022, the Company announced a share buyback programme of up to a maximum aggregate
consideration of £10m, which completed on 6 October 2022 (the ‘Buyback Programme’). During FY22, the Company purchased a total of 9,728,677 ordinary shares
under the Buyback Programme, returning a total of approximately £8.8m in cash to shareholders.
Historical TSR performance and remuneration outcomes for the CEO
The graph below compares the Company’s TSR against the FTSE All-Share Index and the FTSE 250 Index over a period of ten financial years
up to 30 September 2022. It reflects the change in a hypothetical £100 holding in shares. The FTSE 250 Index has been used to be consistent
with the approach used in previous years and as the Company was a constituent of this index until September 2022. For completeness, the
FTSE All-Share Index has been shown to provide an alternative reference point.
£300
£200
£100
£400
£500
Sep
12
Sep
13
Sep
14
Sep
15
Sep
16
Sep
20
Sep
22
Sep
21
Sep
19
Sep
18
Sep
17
£0
Greencore FTSE 250 Index FTSE All-Share Index
The table below illustrates the CEO’s single figure of total remuneration over the same ten financial year period to 30 September 2022.
Chief Executive Officer FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
4
Single figure (€’000) €2,074 €2,590 €5,038 €3,131 €1,670 €1,414 €2,453 €1,120 €1,166 €935
Annual bonus outcome¹ 89% 98% 73% 83% 22% 18% 35% 0% 0% n/a
PSP vesting
2,3
n/a n/a 92.3% 79% 35% 0% 50% 0% 0% n/a
1. Patrick Coveney, Gary Kennedy and Dalton Philips were not eligible to participate in the FY22 Annual Bonus Plan.
2. No performance-based long term incentive awards were awarded prior to March 2013.
3. Patrick Coveney’s in-flight PSP awards lapsed on his resignation from the Company on 30 March 2022. Gary Kennedy and Dalton Philips did not participate in the FY20
PSP.
4. For FY22 this represents all remuneration paid to Patrick Coveney to 30 March 2022 (the date he resigned from the Company), payments made to Gary Kennedy in
respect of his role as Executive Chair (31 March 2022 to 25 September 2022) and payments to Dalton Philips from 26 September 2022 to 30 September 2022.
External appointments
We recognise the opportunities and benefits both to the Company and to the Executive Directors of their serving as Non-Executive Directors
of other companies. Executive Directors are generally permitted to take on one non-executive directorship with another publicly listed
company or other significant commitment subject to the approval of the Board. Any fees arising from these or other appointments will
generally be retained by the individual.
CEO pay ratio
The table overleaf shows the ratio of CEO pay for FY22 comparing the sum of the single total figures of remuneration for Patrick Coveney,
Gary Kennedy (in relation to that part of the year for which he acted as Executive Chair) and Dalton Philips (converted into GBP using the
average exchange rate for FY22 of €1:£0.8471), to the full-time equivalent total reward of those colleagues whose pay is ranked at the 25th,
50th and 75th percentiles in our UK workforce.
106 Greencore Group plc Annual Report and Financial Statements 2022
Report on Directors’ Remuneration continued
Annual Report on Remuneration continued
The colleagues used to calculate the pay ratios were identified using our 2022 gender pay gap data (Option B). The colleagues at the 25th,
50th and 75th percentiles were identified as at 5 April 2022 and their salary and total remuneration were calculated in respect of the 12 months
ended 30 September 2022. This method is deemed the most appropriate methodology for the Group as it makes use of our gender pay data
which provided a readily available and robust dataset. The Committee is satisfied that these colleagues are representative of the relevant
percentiles across the organisation, as they represent the large majority of our UK workforce receiving basic pay, overtime, holiday pay and
employers’ pension contributions. The resulting pay ratios are set out below:
Year Method 25th percentile 50th percentile 75th percentile
FY22 B 35:1 31:1 27:1
FY21 B 49:1 44:1 35:1
FY20 B 49:1 46:1 40:1
The table below provides the individual remuneration information in relation to our colleagues ranked at the 25th, 50th and 75th percentiles:
Year 25th percentile 50th percentile 75th percentile
FY22 Salary £21,320 £23,130 £26,666
Total pay and benefits £22,491 £25,229 £29,364
The Committee considers colleague pay levels and the resulting pay ratios as one of many reference points when reviewing executive
remuneration, and is pleased to note the year-on-year increase in colleague pay levels at the 25th, 50th and 75th percentiles. While the CEO
pay ratio in FY22 was again lower than the previous year, the Committee is mindful that this reflects the leadership transition during the year
under review and may therefore not be representative of the trend going forward. The Committee expects the pay ratio going forward to be
driven by fluctuations year-on-year in the CEO single figure to reflect the outcomes of variable remuneration components, the value of which
is aligned to the sustainable, long term success of the Company. However, the Committee will keep under review the evolution of the pay ratio
over future years in this context, to ensure it remains appropriate.
Outstanding share awards (audited)
Details of the Executive Directors’ existing share awards as at 30 September 2022 in the Company’s share schemes are set out in the table
below:
Date of grant
Number of
options/
awards at
start of year
Granted
during
the year
Vested/
exercised
in the year
2
Lapsed
during
the year
2
Number of
options/
awards at
year end
Market
price on
date of
grant
Exercise
price
Earliest date
of exercise/
vesting
Expiry date/
Holding
expiry date
Patrick Coveney
1
Deferred Bonus Plan
07/12/2018 54,788 – 57, 263 – – £1.806 – 07.12. 21 07.12.21
03/12/2019 78,193 – – 79,332 – £2.405 – 03.12.22 03.12.22
Performance Share Plan
FY19 08/02/2019 754,430 – – 764,613 – £1.957 – 08.02.22 08.02.24
FY20 03/12/2019 603,210 – – 611,282 – £2.405 – 03.12.22 03.12.24
FY21 Yr1 tranche 08/01/2021 150,869 – – 150,869 – £1.122 – 08.01.22 08.01.26
FY21 Yr2 tranche 08/01/2021 251,449 – – 251,449 – £1.122 – 08.01.23 08.01.26
FY21 Yr3 tranche 08/01/2021 603,478 – – 603,478 – £1.122 – 08.01.24 08.01.26
ShareSave 03/07/2020 15,126 – – 15,126 – £1.422 €1.190 01.09.23 29.02.24
Emma Hynes
Deferred Bonus Plan
06/12/2021 – 225,638 – – 225,638 £1.290 – 06.12.24 06.12.24
Performance Share Plan
FY20 22/05/2020 150,000 – – – 150,000 £1.370 – 22.05.23 22.05.25
FY21 Yr1 tranche 08/01/2021 78,543 – – 78,543 – £1.122 – 08.01.22 08.01.26
FY21 Yr2 tranche 08/01/2021 130,905 – – – 130,905 £1.122 – 08.01.23 08.01.26
FY21 Yr3 tranche 08/01/2021 314,172 – – – 314,172 £1.122 – 08.01.24 08.01.26
FY22 06/12/2021 – 470,079 – – 470,079 £1.290 – 06.12.24 06.12.26
1. All outstanding awards lapsed on leaving the Company.
2. The difference between the number of shares granted and vesting/lapsing under the Deferred Bonus Plan and Performance Share Plan represents dividend equivalents
which accrued on the awards. The share price on 10 December 2021, the date of vesting for the 2018 DBP award, was £1.355.
For the purposes of Section 305 of the Companies Act 2014, the aggregate gain by Executive Directors on the exercise of share options during
the year ended 30 September 2022 was £0 (FY21: £0). The value of conditional shares vesting to Executive Directors in the year was £77,591
(FY21: £135,591).
107Strategic Report | Directors’ Report | Financial Statements
Statement of directors’ shareholding and share interests (audited)
The Company has adopted Executive Director shareholding guidelines whereby all Executive Directors shall acquire a holding of shares in the
Company equal to 200% of base salary, typically over a five year period commencing on the date of their appointment to the Board.
As referred to in the 2020 and 2023 Policies, with effect from January 2020, Executive Directors are also subject to a post-employment
shareholding guideline. Executive Directors will normally be expected to maintain a holding of Greencore shares at a level equal to the lower
of the in-post shareholding guideline or the individual’s actual shareholding for a period of two years from the date the individual ceases to be
a Director. The specific application of this shareholding guideline will be at the Committee’s discretion.
There are currently no shareholding guidelines in place for Non-Executive Directors, however, all Non-Executive Directors are encouraged to
hold shares in the Company.
The table below shows the beneficial interests of Directors on 24 September 2021 and 30 September 2022 (including the beneficial interest of
their spouses, civil partners, children and stepchildren) in the Ordinary Shares of the Company, as well as unvested awards.
24 Sep 2021
(or appointment
if later)
Ordinary Shares
held at 30 Sep
2022 (or date of
departure if
earlier)
Shareholding
requirement
as % of salary
Shareholding
as % of salary
1
Shareholding
requirement
met
Scheme
interests subject
to deferral/
holding period
2
Scheme
interests
unvested and
subject to
performance
conditions
3
Share options
unvested and
not subject to
performance
conditions
Executive Directors
Patrick Coveney
4
2,770,686 2,798,066 200% 505% Yes n/a n/a n/a
Emma Hynes
5
140,357 140,357 200% 57% Building 225,638 1,065,156 Nil
Dalton Philips
6
n/a – 200% 0% Building Nil Nil Nil
Non-Executive Directors
John Amaechi
7
– – n/a n/a n/a n/a n/a n/a
Sly Bailey 64,504 64,504 n/a n/a n/a n/a n/a n/a
Paul Drechsler 43,015 43,015 n/a n/a n/a n/a n/a n/a
Gordon Hardie
8
100,000 100,000 n/a n/a n/a n/a n/a n/a
Linda Hickey
7
– – n/a n/a n/a n/a n/a n/a
Gary Kennedy 377,676 477,676 n/a n/a n/a n/a n/a n/a
Anne O’Leary
7
– – n/a n/a n/a n/a n/a n/a
Helen Rose 98,550 98,550 n/a n/a n/a n/a n/a n/a
Helen Weir 39,000 39,000 n/a n/a n/a n/a n/a n/a
Group Company Secretary
Jolene Gacquin
9
8,066 8,066 n/a n/a n/a n/a n/a n/a
1. Calculated based on FY22 salaries and the average share price between 1 July 2022 and 30 September 2023 of £0.924 (for Patrick Coveney, the average share price
between 31 December 2021 and 30 March 2022 of £1.301) which has then been converted into euro using the average exchange rate for FY22 of €1:£ 0.8471.
2. Includes deferred share awards which are included in the value of the shareholding (on a net of tax basis where these are unvested) and vested shares subject to a holding
period under the PSP where applicable.
3. Includes unvested PSP shares.
4. Patrick Coveney resigned from the Board as Executive Director and CEO on 30 March 2022 and is subject to the post-employment shareholding guideline.
5. Emma Hynes was appointed to the Board on 19 May 2020. Executive Directors have a period of five years from Board appointment to reach the shareholding guidelines.
6. Dalton Philips was appointed to the Board on 26 September 2022. Executive Directors have a period of five years from Board appointment to reach the shareholding
guidelines.
7. John Amaechi, Linda Hickey and Anne O’Leary were appointed to the Board as Non-Executive Directors with effect from 1 February 2021.
8. Gordon Hardie stepped down from the Board and as Non-Executive Director on 3 May 2022.
9. Jolene Gacquin resigned as Company Secretary and left the Company on 9 September 2022.
Between 30 September 2022 and the date of this Report there have been no changes in the Directors’ shareholdings.
None of the Directors had a material interest in any contract of significance, other than a service contract in the case of Executive Directors,
with the Company or any of its subsidiaries at any time during the period.
Share-based payments
The Group operates a ShareSave Scheme in both Ireland and in the UK, which encourages eligible employees to save in order to buy shares in
the Company. The ShareSave Schemes provide a means of saving and give employees the opportunity to become shareholders. Currently,
there are approximately 2,000 participants in the schemes. The Group’s Financial Statements recognise an Income Statement charge in
accordance with IFRS 2 Share-based Payment in respect of options issued under the ShareSave Scheme, and awards granted under the DBP
and the PSP. The related charge in respect of share-based payments issued to Executive Directors totaled £nil (FY21: £0.4m). Further detail in
respect of the DBP and PSP awards is outlined in Note 30 to the Group Financial Statements.
108 Greencore Group plc Annual Report and Financial Statements 2022
Report on Directors’ Remuneration continued
Annual Report on Remuneration continued
Share-based payments continued
Share awards and share options outstanding under the Company’s DBP, PSP and all employee plans at 30 September 2022 amounted to
22,907,111 Ordinary Shares (FY21: 23,050,850), made up as follows:
Number of
Ordinary Shares Price range
Normal vesting/
exercise dates
Deferred Bonus Plan 1,319,090 – 2022-2025
Performance Share Plan 6,089,094 – 2022-2025
ShareSave Scheme: UK 13,506,159 £0.91-£1.67 2022-2025
ShareSave Scheme: Ireland 81,376 €1.19-€1.75 2022-2024
Share Incentive Scheme 1,911,392 – 2025-2027
Funding of equity awards
Executive incentive arrangements are funded by a mix of newly issued shares and shares purchased in the market. Where shares are newly
issued, the Company complies with the Investment Association guidelines in relation to issuing a maximum of 5% of share capital in respect of
discretionary schemes and a maximum of 10% in respect of all share schemes in a rolling ten-year period. At 30 September 2022, there were
2,877,009 shares in the Company’s share ownership trust (as at 24 September 2021: 986,837). Current shareholder dilution is c.0.56%.
109Strategic Report | Directors’ Report | Financial Statements
Other statutory disclosures
Principal activities, results and review of business
Greencore is a leading manufacturer of convenience food in the UK and our purpose is to make every day taste better. We supply all of the
major supermarkets in the UK. We also supply convenience and travel retail outlets, discounters, coffee shops, foodservice and other retailers.
We have strong market positions in a range of categories including sandwiches, salads, sushi, chilled snacking, chilled ready meals, chilled
soups and sauces, chilled quiche, ambient sauces and pickles, and frozen Yorkshire Puddings.
In FY22 we manufactured 795m sandwiches and other food to go products, 127m chilled prepared meals, 249m jars of cooking sauces,
pickles and condiments, and 47m chilled soups and sauces. We carry out more than 10,600 direct to store deliveries each day. We have 23
manufacturing units across 16 locations in the UK, with industry-leading technology and supply chain capabilities. The Group also operates an
ingredient trading business in Ireland. The Group employs c. 14,000 people and is headquartered in Dublin, Ireland. Greencore’s shares are
listed on the London Stock Exchange and are included in the FTSE All Share Index Exchange.
The Group’s performance and development activity is summarised in the Operating and Financial Review set out on pages 38 to 41.
The Group Income Statement, which is set out on page 125, details the Group’s results for FY22. The Group reported Adjusted Operating
Profit for the year of £72.2m (FY21: £39.0m). Profit for the financial year was £32.3m (FY21: Profit £25.7m).
Dividends
The Group did not pay dividends to shareholders in FY22 and there is no proposed final dividend for the year (FY21: £nil).
Future developments
Revenue performance in the early weeks of FY23 has broadly held up however, the Group do note some mix effect between categories.
The Group remains cautious about the potential impact of the recessionary environment and cost-of-living factors on consumer spending
through the year ahead.
The Group expects that FY23 will be a year of further substantial inflation and the Group is working with its customers on recovery and
mitigation. The Group remains focused on the execution of the Better Greencore programme and continues to plan for the second phase
which will focus on operational and technological excellence.
The Group continues to make decisions on customer contracts which are no longer economic, with a heightened focus on the ability to
recover inflation.
The Group is confident that continued focus on the strengths of the business, underpinned by the Group’s resilient balance sheet and the
efficiency and productivity gains related to the Better Greencore programme will support further successful progress of the Group in the
years ahead.
Principal risks and uncertainties
Pursuant to Section 327(1)(b) of the Companies Act 2014, the 2018 UK Corporate Governance Code (the ‘Code’) and DTR 4.1.8R(2), the
principal risks and uncertainties that could affect the Group’s business are set out on pages 46 to 49 and are deemed to be incorporated in this
part of the Directors’ Report.
Principal subsidiaries
The principal subsidiary undertakings are listed in Note 31 to the Group Financial Statements.
Corporate governance
Statements by the Directors relating to the Group’s application of corporate governance principles, compliance with the principles and
provisions of the Code and the Irish Corporate Governance Annex (the ‘Annex’) are set out on pages 52 and 53. The Group’s system of internal
control and the adoption of the going concern basis in the preparation of the Group Financial Statements are set out on pages 42 to 49.
Greencore Group plc has applied the principles of the Code and complied with the provisions of the Code on a comply or explain basis for the
year ended 30 September 2022.
Greencore Group plc is registered in Ireland and, as an Irish incorporated company, it is not subject to the UK executive remuneration
requirements as set out in the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, as updated.
Greencore Group plc is listed on the main market of the London Stock Exchange, and so it is not a ‘traded PLC’ for the purposes of Section
1110N of the Companies Act 2014. Nonetheless, in order to ensure transparency for all of our stakeholders, we have sought to comply with
these requirements on a voluntary basis in respect of the members of the Board to the extent possible under Irish law. The Report on
Directors’ Remuneration is contained on pages 83 to 108.
TCFD reporting
The Company’s compliance with the TCFD Recommendations and Recommended Disclosures pursuant to UK Listing Rule 9.8.6R is set on
pages 29 to 33.
110 Greencore Group plc Annual Report and Financial Statements 2022
Other statutory disclosures continued
Non-financial information statement
Pursuant to the European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups) Regulations
2017 (‘Regulations’), the Group is required to report on certain non-financial information to provide an understanding of its development,
performance, position and the impact of its activities, relating to, at least, environmental matters, social matters, employee matters, respect for
human rights, and bribery and corruption. The Group’s Code of Ethics and Business Conduct takes into account all relevant laws including the
Regulations. The table below provides additional detail on the information required to be provided by the Regulations and highlights where
the information has been provided in this Annual Report and Financial Statements, where applicable.
Reporting requirement
Relevant policies, codes,
reports and statements* Initiatives/location of information** Page
Environmental
matters
• Code of Ethics and
Business Conduct
• Sustainability 20 to 33
Communities
• Code of Ethics and
Business Conduct
• Directors’ Report
• Sustainability
20 to 33, 65
Social and
employee matters
• Code of Business Practice
• Code of Ethics and
Business Conduct
• Ethical Code and
Employment Standards
Policy
• Directors’ Report
• Sustainability
• Non-financial KPIs
27, 28, 36, 64,
66 and 67
Human rights
• Code of Ethics and
Business Conduct
• Ethical Code and
Employment Standards
Policy
• FY21 Modern Slavery and
Human Trafficking
Transparency Statement
• Sustainability 21, 23, 29
and 63
Anti-bribery and
corruption
• Anti-Bribery and
Corruption Policy
Statement
• Code of Ethics and
Business Conduct
Greencore is committed to the highest standards of honesty
and integrity. The Group has a zero-tolerance approach to any
form of bribery or corruption. We provide annual training on our
Anti-Bribery and Corruption Compliance Manual and our Gifts
and Hospitality Policy which is available internally on our intranet.
Bribery risk assessments are conducted on an annual basis and
reported to the Audit and Risk Committee.
–
Prevention of
modern slavery
• Code of Ethics and
Business Conduct
• FY21 Modern Slavery and
Human Trafficking
Transparency Statement
The Group has a Group Ethics Committee in place whose role
includes driving progress in combatting modern slavery. We also
have a comprehensive education programme which sets out our
procedures for managing incidents of modern slavery, and training
on how to identify potential slavery or worker exploitation. This
training is provided by Stronger Together, a not-for-profit
organisation with specialist expertise in addressing hidden labour
exploitation. We prioritise collaborative programmes to prevent
modern slavery and are active members of the Food Network for
Ethical Trade (providing a broad range of tools and working groups)
and the Modern Slavery Intelligence Network (designed to disrupt
modern slavery through the sharing of intelligence). The Group
regularly reviews our management systems, primarily through
independent third party ethical audits, and resources dedicated
human rights recognised specialists in this space.
This initiative is supported by the UK’s ‘Gangmasters and Labour
Abuse Authority’. The Group regularly reviews eligibility to work
systems and has a number of pre-employment checks in place.
23 and 63
111Strategic Report | Directors’ Report | Financial Statements
Reporting requirement
Relevant policies, codes,
reports and statements* Initiatives/location of information** Page
Diversity
• Board Diversity Policy
• Code of Ethics and Business
Conduct
• Ethical Code and Employment
Standards Policy
• Group Inclusion and Diversity Policy
The Group continues to make progress against its
inclusion and diversity strategy and remains committed
to being an inclusive employer, embracing a diverse
workforce that is representative of all sections of
society. Continued progress has been made in respect
to inclusion and belonging, with increasing colleague
engagement in our inclusion activities, enabling
colleagues to be themselves at work. Our leadership
teams play a vital role in living this commitment, and
through their leadership and role modelling enable us
to make Greencore a great place to work for our
people.
Our Board also plays a vital role in this commitment and
continues to monitor the Group’s progress in this area.
No. of colleagues Ireland UK Total
Female 21 5,558 5,579
Male 10 8,505 8,515
Other n/a 4 4
Prefer not to say n/a 10 10
Total no. of
colleagues 31 14,077 14,108
At the end of the financial year, 39% of all colleagues
were female. Females made up 68% of our workforce in
Ireland and 39% in the UK. At Board level, 60% of our
Directors were female. Average female representation
on our subsidiary company boards was 42%. 29% of the
Group Executive Team (13% at the date of this Annual
Report) were female and 44% of the Group Executive
Team’s direct reports were female.
During the financial year we have delivered a
restructure of our organisation, in particular delivering
change at our executive level. As a founding member of
the 30% Club – which strives for 30% of leadership
positions to be held by women, we commit to keep
driving progress in this area paying particular attention
to understanding and tackling unconscious biases.
27,28, 71 and 75
Whistleblowing
• Code of Ethics and Business
Conduct
• Ethical Code and Employment
Standards Policy
• Whistleblowing and
Speak Up Policy
The Group ensures that details of the Group’s
Whistleblowing and Speak Up Policy and the associated
externally facilitated anonymous and independent
hotline (the ‘Hotline’) and web portal are available on
the Group website and are made visible by the presence
of posters at all sites and available to all colleagues and
third parties. In addition, details of the Hotline are
included in the Group Code of Business Conduct and
Ethics, which is also available on the Group website.
The Hotline number is toll free and issues can be raised
in multiple languages. All concerns raised through the
Hotline are managed through an approved, confidential
third-party provider. Any concerns raised are
appropriately investigated by the relevant business with
a target of 28 days to investigate and take action. The
Director of Internal Audit and Risk provides independent
oversight and supervision on all investigations, including
the reporting on whistleblowing activity to the Audit
and Risk Committee including providing assurance that
appropriate actions have been taken where required.
Further details are set out in page 81 of the Report of
the Audit and Risk Committee.
81
112 Greencore Group plc Annual Report and Financial Statements 2022
Other statutory disclosures continued
Reporting requirement
Relevant policies, codes,
reports and statements* Initiatives/location of information** Page
Business model
– Business model 6 and 7
Non-financial KPIs
– Key Performance Indicators 36 and 37
Principal risks
– Risks and risk management report 46 to 49
* Policies, codes, reports and statements are all available on the Group website www.greencore.com.
** The referenced sections of this document are deemed to be incorporated within this Directors’ Report.
Shareholders’ meetings
The Company operates under the Irish Companies Act 2014 (the ‘Act’). The Act provides for two types of shareholder meetings: the Annual
General Meeting (‘AGM’), with all other general meetings being called an Extraordinary General Meeting (‘EGM’).
The Company must hold a general meeting each year as its AGM, in addition to any other general meetings held in that year. Not more than 15
months may elapse between the date of one AGM and the next. EGMs can also be convened at the request of members holding not less than
5% of the voting share capital of the Company. The notice period for an AGM and an EGM to consider any special resolution (a resolution
which requires a 75% majority vote, not a simple majority) is 21 days.
No business shall be transacted at any general meeting unless a quorum is present at the time when the meeting proceeds to business. Two
members present in person or by proxy and entitled to vote shall be a quorum. Only those shareholders registered on the Company’s register
of members at the prescribed record date, being a date not more than 72 hours before the general meeting to which it relates, are entitled to
attend and vote at a general meeting.
Under the Act, ordinary resolutions may be passed by a majority of votes cast in favour, while special resolutions require a 75% majority of
votes cast in favour. Any shareholder who is entitled to attend, speak and vote at a general meeting is entitled to appoint one or more proxies
to attend, speak and vote on his or her behalf. A proxy need not be a member of the Company. Resolutions are voted on by either a show of
hands of those shareholders attending in person or by proxy, or, if validly requested, by way of a poll.
The business of the Company is managed by the Directors who may exercise all the powers of the Company unless they are required to be
exercised by the Company in a general meeting. Matters reserved to shareholders in general meetings include the election of Directors,
the declaration of final dividends on the recommendation of the Directors, the fixing of the remuneration of the external auditor, amendments
to the Articles of Association, measures to increase or reduce the ordinary share capital and the authority to issue shares.
Notice of general meetings and special business
The notice of the 2023 AGM, together with details of special business to be considered at the meeting, will be circulated to shareholders
during December 2022.
Share capital
As at 24 September 2021, there were 526,546,662 Ordinary Shares in issue. In FY22, 18,575 (FY21; 32,264) Ordinary Shares were issued under
the Company’s ShareSave Schemes.
On 26 July 2022, the Company announced a share buyback programme of up to a maximum aggregate consideration of £10m, which
completed on 6 October 2022 (the ‘Buyback Programme’).
During FY22, the Company purchased a total of 9,728,677 ordinary shares under the Buyback Programme, returning a total of £8.8m in cash
to shareholders. All shares purchased under the Buyback Programme were cancelled.
The table below sets out the ordinary shares purchased under the Buyback Programme during FY22. See Note 11 to the Consolidated
Financial Statements for further details.
Month
Total number of
share buyback
purchases
Average price
paid per share
July 428,499 1.0433
August 3,864,484 0.9847
September 5,435,694 0.8324
Total 9,728,677 0.9022
113Strategic Report | Directors’ Report | Financial Statements
As at 30 September 2022, Greencore’s issued ordinary share capital consisted of 516,836,560 Ordinary Shares with voting rights.
Between 1 October 2022 and 6 October 2022 the Company purchased a total 1,666,838 ordinary shares under the Buyback Programme,
returning a total of £1.2m in cash to shareholders.
One Special Share of €1.26 exists in the share capital of the Company. The Articles of Association provide that the Special Share may be held
only by, or transferred only to, the Minister for Agriculture, Food and the Marine or some other person appointed by the Minister. Under the
Articles of Association, the consent of the holder of the Special Share is required in the winding up of the Company. Many of the rights
attached to the Special Share were abolished in 2011.
At the AGM held on 27 January 2022, amongst other resolutions passed:
• Shareholders passed a resolution to give the Company, or any of its subsidiaries, the authority to make market purchases and overseas
market purchases of up to 10% of its own shares;
• Shareholders gave the Directors authority to allot shares up to a maximum nominal amount equal to approximately 33% of the aggregate
nominal value of the issued ordinary share capital of the Company;
• Shareholders gave authority to Directors to disapply pre-emption rights; and
• Shareholders gave authority to Directors to re-allot shares purchased by the Company and not cancelled as treasury shares.
At the forthcoming AGM scheduled to take place on 26 January 2023 (‘2023 AGM’) amongst other resolutions, Directors will seek:
• Authority to make market purchases or overseas market purchases of up to 10% of its own shares. If approved, any purchases will be made
only at price levels which the Directors consider to be in the best interests of the shareholders generally, taking into consideration the
Group’s overall financial position;
• Approval to allot relevant shares up to an amount equal to approximately 33% of the aggregate nominal value of the issued ordinary share
capital of the Company;
• Approval to disapply the strict statutory pre-emption provisions relating to the issue of new equity for cash until the date of the AGM to be
held in 2024, or 26 April 2024, whichever is earlier. If approved, the disapplication will be limited to the allotment of equity securities in
connection with any rights issue or any open offer to shareholders, the allotment of shares in lieu of dividends, and/or the allotment of
shares up to an aggregate nominal value equal to 5% of the nominal value of the Company’s issued share capital; and
• Authority to re-allot shares purchased by the Company and not cancelled as treasury shares. If the resolution is passed, the authority will
expire on the earlier date of the AGM in 2024 or 26 April 2024 and the minimum price at which treasury shares may be re-allotted shall be
set at the nominal value of the share where such a share is required to satisfy an obligation under an employee share scheme or, in all other
cases, an amount equal to 95% of the then market price of such shares and the maximum price at which treasury shares may be re-allotted
shall be set at 120% of the then market price of such shares.
Memorandum and Articles of Association
The Company’s Memorandum and Articles of Association set out the objects and powers of the Company. The Articles of Association detail
the rights attaching to shares, the method by which the Company’s shares can be purchased or re-issued, the provisions which apply to the
holding of and voting at general meetings and the rules relating to the Directors, including their appointment, retirement, re-election, duties
and powers. The Company’s Articles of Association may be amended by a special resolution passed by the shareholders at an AGM or EGM of
the Company. The Company’s Articles of Association were last amended at the 2021 EGM, and a copy can be obtained from the Company’s
website, www.greencore.com.
Directors’ interests in the Ordinary Shares at 30 September 2022
The interests of Directors and Group Company Secretary in the shares of the Company are set out in the Report on Directors’ Remuneration.
The Directors and Group Company Secretary have no beneficial interests in any of the Group’s subsidiary or associated undertakings.
Going concern and viability statement
The going concern and viability statements set out on pages 44 and 45 are deemed to be incorporated in this section of the Directors’ Report.
Directors’ compliance statement
The Directors acknowledge that they are responsible for securing compliance by the Company of its relevant obligations as defined in the
Companies Act 2014 (the ‘Relevant Obligations’). The Directors further confirm that there is a compliance policy statement in place setting out
the Company’s policies which, in the Directors’ opinion, are appropriate to ensure compliance with the Company’s Relevant Obligations.
The Directors also confirm that appropriate arrangements and structures are in place which, in the Directors’ opinion, are designed to secure
material compliance with the Company’s Relevant Obligations. For the year ended 30 September 2022, the Directors, with the assistance of
Internal Audit, conducted a review of the arrangements and structures in place. In discharging their responsibilities under Section 225 of the
Companies Act 2014, the Directors relied on the advice of persons who the Directors believe have the requisite knowledge and experience to
advise the Company on compliance with its Relevant Obligations.
114 Greencore Group plc Annual Report and Financial Statements 2022
Other statutory disclosures continued
Directors for year ended 30 September 2022
The names of each of the current Directors and a short biographical note on each Director appear on pages 54 and 55.
Patrick Coveney resigned as Executive Director and Chief Executive Officer (‘CEO’) on 30 March 2022 and his successor Dalton Philips was
appointed as CEO and Executive Director on 26 September 2022. Gordon Hardie stepped down from his role as a Non-Executive Director on
3 May 2022.
In accordance with the Company’s Articles of Association and Provision 18 of the Code, each of the Directors individually retire at each AGM
of the Company and, where appropriate, submit themselves for re-election. No reappointment is automatic and all Directors who intend to
submit themselves for re-election are subject to a full and rigorous evaluation. One of the main purposes of the evaluation is to assess each
Director’s suitability for re-election. If a Director is not deemed to be effective in carrying out his or her required duties, the Board will not
recommend that Director for re-election.
In line with the Code, in the year under review, each Director, and the Board as a whole, were subject to an internal evaluation. Details of the
Board evaluation can be found on pages 70 and 71.
Following on from the evaluation, the Board Chair and Board are pleased to recommend for re-election each of those Directors who intend
to seek reappointment at the forthcoming AGM as they continue to be effective and remain committed to their role on the Board.
Significant shareholdings
At 30 September 2022, the Company has been advised of the following notifiable interests in its ordinary share capital:
Shareholder
Notified
shareholding as
at 30 September
2022
Percentage of
Total Ordinary
Shares in Issue
Polaris Capital Management, LLC 67,1 19,773 12.94
FMR LLC 35,767,682 6.91
Rubric Capital Management LP 27,415,831 5.20
BlackRock, Inc. 25,300,618 4.84
Goldman Sachs Group, Inc 22,709,865 4.37
BNP Paribas Asset Management Holding S.A 20,970,205 3.98
Brandes Investment Partners, L.P. 16,442,850 3.12
Black Creek Investment Management Inc 15,834,000 3.01
At 25 November 2022, the Company has been advised of the following notifiable interests in its ordinary share capital:
Shareholder
Notified
shareholding as
at 25 November
2022
% of total
Ordinary Shares
in issue
Polaris Capital Management, LLC 67,1 19,773 13.00
Morgan Stanley & Co. International plc 41,964,145 8.15
Rubric Capital Management LP 27,415,831 5.20
FMR LLC 26,679,092 5.18
BlackRock, Inc. 25,300,618 4.84
Brandes Investment Partners, L.P. 20,712,294 4.02
Black Creek Investment Management Inc 15,834,000 3.01
Other than these holdings, the Company has not been notified as at 25 November 2022 of any interest of 3% or more in its ordinary share capital.
Accounting records
The Directors believe that they have complied with the requirements of Sections 281 to 285 of the Companies Act 2014 with regard to
maintaining adequate accounting records by employing accounting personnel with appropriate expertise and by providing adequate
resources to the Finance function. The accounting records of the Company are maintained at the Company’s registered office address at
No. 2 Northwood Avenue, Northwood Business Park, Santry, Dublin 9, D09 X5N9, Ireland.
Research and development
The Group continued its research and development programme in relation to its principal activities during the year under review.
Further information is contained in Note 3 to the Group Financial Statements.
Political contributions
The Company made no political contributions which are required to be disclosed under the Electoral Act, 1997 (as amended).
Audit and Risk Committee
The Company has an Audit and Risk Committee, the members of which are set out on page 76.
115Strategic Report | Directors’ Report | Financial Statements
Auditor
Deloitte Ireland LLP (‘Deloitte’) were appointed as external auditor in January 2019. At the AGM of the Company on 27 January 2022, under an
advisory resolution, the shareholders approved the reappointment of Deloitte as external auditor for its fourth year. Under Irish legislation, the
Company’s external auditor is automatically reappointed each year at the AGM unless the meeting passes a resolution to appoint a different
auditor or provides that the existing external auditor shall not be reappointed or, alternatively, if the auditor expresses its unwillingness to
continue in office. At the 2023 AGM, the Company intends to once again put an advisory resolution before shareholders in respect of the
continuation in office of Deloitte as external auditor.
As required under Section 381(1) (b) of the Companies Act 2014, a resolution authorising the Directors to determine the remuneration of the
external auditor will be proposed at the 2023 AGM.
Disclosure of information to the auditor
Each of the Directors individually confirm that:
• Insofar as they are aware, there is no relevant audit information of which the Company’s auditor is unaware; and
• They have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit
information and to establish that the Company’s auditor is aware of such information.
The referenced sections are deemed to be incorporated within this Directors’ Report.
On behalf of the Board
Gary Kennedy Emma Hynes
Board Chair Director
Dublin
28 November 2022
116 Greencore Group plc Annual Report and Financial Statements 2022
Statement of Directors’ Responsibilities FY22
The Directors are responsible for preparing
the Annual Report and Financial Statements
in accordance with applicable law and
regulations.
Company law requires the Directors to
prepare Financial Statements for each
financial year. Under that law the Directors
are required to prepare the Group Financial
Statements in accordance with International
Financial Reporting Standards (‘IFRS’) as
adopted by the European Union (‘EU’) and
with those parts of the Companies Act 2014
applicable to companies reporting under
IFRS. The Directors have elected to prepare
the Company Financial Statements in
accordance with FRS 101: Reduced
Disclosure Framework issued by the Financial
Reporting Council together with the
Companies Act 2014.
Under company law, Directors shall not
approve the Group and Company Financial
Statements unless they are satisfied that they
give a true and fair view of the assets,
liabilities and financial position of the Group
and Company respectively and of the
Group’s profit or loss for that financial year.
In preparing these Group and Company
Financial Statements, the Directors are
required to:
• Select suitable accounting policies and
apply them consistently;
• Make judgements and estimates that are
reasonable and prudent;
• State that the Group Financial Statements
have been prepared in accordance with
IFRS as adopted by the EU and as applied
in accordance with the Companies Act
2014 and the Company Financial
Statements have been prepared in
accordance with FRS 101 together with
the Companies Act 2014;
• Assess the Company and the Group’s
ability to continue as a going concern,
disclosing, as applicable, matters related
to going concern; and
• Prepare the Financial Statements on the
going concern basis, unless it is
inappropriate to presume that the Group
or Company will continue in business.
The Directors are also required by the
Disclosure Guidance and Transparency Rules
of the UK Financial Conduct Authority (the
‘Transparency Rules’) to include a
management report containing a fair review
of the business and a description of the
principal risks and uncertainties facing the
Group.
The Directors are responsible for keeping
adequate accounting records which disclose
with reasonable accuracy at any time the
assets, liabilities, financial position and profit
or loss of the Group and Company and
which enable them to ensure that the
Financial Statements of the Group and
Company comply with the provisions of the
Companies Act 2014. The Directors are also
responsible for taking all reasonable steps to
ensure such records are kept by the Group’s
subsidiaries which enable them to ensure
that the Financial Statements of the Group
comply with the provisions of the
Companies Act 2014. They are responsible
for such internal controls as they determine
is necessary to enable the preparation of
Financial Statements that are free from
material misstatement, whether due to fraud
or error, and have general responsibility for
safeguarding the assets of the Company and
the Group, and hence for taking reasonable
steps for the prevention and detection of
fraud and other irregularities. The Directors
are also responsible for preparing a Directors’
Report that complies with the requirements
of the Companies Act 2014.
Furthermore, the Directors are responsible
for the maintenance and integrity of
corporate and financial information included
on the Group’s website (www.greencore.
com). Legislation in Ireland concerning the
preparation and dissemination of Financial
Statements may differ from legislation in
other jurisdictions.
In accordance with the 2018 UK Corporate
Governance Code, the Directors must
provide an explanation of their responsibility
for preparing the Annual Report and
Financial Statements and state, having taken
all relevant matters into consideration,
whether they consider that the Annual
Report and Financial Statements, taken as a
whole, is fair, balanced and understandable
and provides shareholders with the
information necessary to assess the Group’s
position, performance, business model and
strategy.
The Directors confirm that they have
complied with the above requirements in
preparing the Annual Report and Financial
Statements.
Responsibility statement in regard to
Annual Report
Each of the Directors, whose names and
functions are listed on pages 54 and 55 of
this Annual Report and Financial Statements,
confirm that, to the best of each person’s
knowledge and belief:
As required by the Transparency Rules:
• The Group Financial Statements,
prepared in accordance with IFRS as
adopted by the EU and the Company
Financial Statements prepared in
accordance with FRS 101: Reduced
Disclosure Framework, give a true and fair
view of the assets, liabilities, financial
position of the Group and Company at
30 September 2022 and the profit of the
Group for the year then ended; and
• The Directors’ Report contained in this
Annual Report and Financial Statements
includes a fair review of the development
and performance of the business and the
position of the Group and Company,
together with a description of the
principal risks and uncertainties that
they face.
As required by the 2018 UK Corporate
Governance Code:
• The Annual Report and Financial
Statements, taken as a whole, is fair,
balanced and understandable and
provides the information necessary for
shareholders to assess the Group’s
position, performance, business model
and strategy.
On behalf of the Board
Gary Kennedy Emma Hynes
Board Chair Director
Dublin
28 November 2022
117Strategic Report | Directors’ Report | Financial Statements
Independent Auditor’s Report
to the members of Greencore Group plc
Report on the audit of the financial statements
Opinion on the financial statements of Greencore Group plc (the ‘Company’)
In our opinion the Group and Company financial statements:
• give a true and fair view of the assets, liabilities and financial position of the Group and the Company as at 30 September 2022 and profit of
the Group for the financial year then ended; and
• have been properly prepared in accordance with the relevant financial reporting frameworks and, in particular, with the requirements of the
Companies Act 2014.
The financial statements we have audited comprise:
The Group financial statements:
• the Group Income Statement;
• the Group Statement of Comprehensive Income;
• the Group Statement of Financial Position;
• the Group Statement of Cash Flows;
• the Group Statement of Changes in Equity; and
• the related notes 1 to 33, including a summary of significant accounting policies as set out in note 1.
The Company financial statements:
• the Company Statement of Financial Position;
• the Company Statement of Changes in Equity; and
• the related notes 1 to 10, including a summary of significant accounting policies as set out in note 1.
The relevant financial reporting framework that has been applied in the preparation of the Group financial statements is the Companies Act
2014 and International Financial Reporting Standards (IFRS) as adopted by the European Union (“the relevant financial reporting framework”).
The relevant financial reporting framework that has been applied in the preparation of the Company financial statements is the Companies
Act 2014 and FRS 101 “Reduced Disclosure Framework” issued by the Financial Reporting Council (“the relevant financial reporting
framework”).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) and applicable law. Our
responsibilities under those standards are described below in the “Auditor’s responsibilities for the audit of the financial statements” section of
our report.
We are independent of the Group and Company in accordance with the ethical requirements that are relevant to our audit of the financial
statements in Ireland, including the Ethical Standard issued by the Irish Auditing and Accounting Supervisory Authority, as applied to listed
entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
118 Greencore Group plc Annual Report and Financial Statements 2022
Independent Auditor’s Report continued
to the members of Greencore Group plc
Summary of our audit approach
Key Audit Matters
The Key Audit Matters that we identified in the current year were:
• Going Concern;
• Impairment of Goodwill; and
• Recoverability of Investment in Subsidiary Undertakings (Company only Key Audit Matter)
Within this report, any new Key Audit Matters are identified with
and any Key Audit Matters which are the same as
the prior year identified with .
Materiality
The materiality for the Group that we used in the current year was £3m which was determined on the basis of Net
Assets representing 0.6% of this benchmark (2021: £3m, representing 0.7% of Net Assets).
The materiality for the Company that we used in the current year was £1.65m which was determined on the basis of
Net Assets representing 0.4% of this benchmark (2021: £1.65m, representing 0.4% of Net Assets).
Scoping
We determined the scope of our Group audit by obtaining an understanding of the Group and its environment and
assessing the risks of material misstatement at the Group level.
Our audit scoping provides full scope audit coverage of 100% of revenue, and 99.8% of net assets (2021: 99.7% of
revenue and 99.8% of net assets).
Significant changes
in our approach
There are no significant changes noted in our approach compared to prior year.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of
the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Group and Company’s ability to continue to adopt the going concern basis of accounting is
discussed in the Key Audit Matters section of our report.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Group and Company’s ability to continue as a going concern for a period of at least twelve
months from when the financial statements are authorised for issue.
In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we have nothing material to add or draw
attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it appropriate to
continue to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
119Strategic Report | Directors’ Report | Financial Statements
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the
current financial year and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified,
including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of
the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Going Concern
Key Audit Matter description
As outlined in note 1 to the financial statements, the Group’s performance continued to be impacted by
various macro-economic factors. Uncertainty remained over the duration and ongoing impact of
COVID-19. New risks were identified in relation to potential labour shortages, supply chain disruption, the
rising impact of inflation affecting the Group’s trading environment, including recessionary pressures
potentially affecting future performance.
At the year end date, the Group is in a net current liability position of £128.7m (2021: £135.9m) and the
Group had borrowings of £279.6m (2021: £302.2m) (Note 20). At the year end date, the Company is in a net
current liability position of £402.8m (2021: £389.0m).
The Group is required to meet specific debt covenants (which include EBITDA/net debt ratios). Compliance
with these debt covenants is dependent on the achievement of projected net cash inflows.
There is a risk that the Group may not be able to comply with the debt covenants requirements if sufficient
cashflows are not generated, which may impact the ability of the Group and Company to continue as a
going concern.
Because of the significance of the assumptions and judgements exercised in these cash flow scenarios
prepared by management, we have considered this as a Key Audit Matter.
The Audit and Risk committee discussion of this Key Audit Matter is set out on page 79.
How the scope of our audit
responded to the Key Audit
Matter
In order to address the Key Audit Matter, our procedures included the following:
We evaluated the design and determined the implementation of the relevant controls in place over the
Directors’ review of the going concern cash flow projections and various scenarios.
We read the amendments to the Group’s financing agreements and obtained an understanding of the debt
covenants applicable to the Group and the respective impact going forward in the going concern cash flow
projections.
We challenged the Director’s assumptions used in their going concern assessment, the basis for their
evaluation and inclusion of sensitivities to incorporate the risks and uncertainties related to macro-
economic factors such as any potential continued impact of COVID-19, supply chain disruption, labour
challenges, inflationary pressures, and climate risk on future trading.
We have evaluated the Director’s assessment of the risks and uncertainties related to macro-economic
factors and the adequacy of disclosures in relation to the specific risks these pose.
We performed sensitivity analysis using alternative reasonably possible assumptions, including potential for
renewed COVID-19 restrictions and other market trading challenges such as inflation and recessionary
pressure. We compared outputs from the Group’s cash flow projections and from our sensitivity analysis to
the Directors’ proforma covenant compliance calculations.
We evaluated the completeness and accuracy of the disclosures made in the Basis of Preparation in Note 1
by reference to the understanding we had obtained of the Group’s financial performance during 2022, our
assessment of Directors’ cash flow projections and our reading of the Group’s financing agreements.
Key observations
We have concluded that the adoption of the going concern basis and the related disclosures are
appropriate. We have no observations that impact our audit in respect of the adoption of the going concern
basis or the related disclosures. Please refer to our conclusions in the Going Concern section of our report.
120 Greencore Group plc Annual Report and Financial Statements 2022
Impairment of Goodwill
Key Audit Matter description
As stated in Note 12 (Goodwill and Intangible Assets), the Group held £449.4m (2021: £449.4m) of goodwill
as at 30 September 2022 which represents 33.6% of the Group’s total assets. The accounting policies in
relation to Goodwill are described in Note 1 (Significant Sources of Accounting Estimates) to the financial
statements.
Directors’ judgement is required in identifying indicators of impairment, and estimation is required in
determining the recoverable amount of the Group’s cash generating units (“CGU’s”). There is a risk that an
impairment of goodwill has arisen which has not been appropriately identified. As a result, the balances
could be overstated on the Statement of Financial Position at year end due to the use of inappropriate
inputs and assumptions within the impairment model, in particular the discount rate and long- term growth
rate. This risk mainly relates to one of the Groups two CGU’s, Convenience Foods UK as it accounts for 99%
of the Group’s goodwill balance.
When a review for impairment is carried out, the recoverable amount of the CGU is compared to its
carrying value. The recoverable amount is determined based on value in use calculations which rely on
Directors’ assumptions and estimates of future trading performance. These assumptions and estimates may
be impacted by new risks and uncertainties arising from the Russia- Ukraine Conflict, and other macro-
economic factors such as supply chain disruption, labour challenges, inflationary and recessionary
pressures, resulting in reduced headroom and potentially impairment in the carrying value of goodwill.
The key assumptions utilised by the Directors in the impairment reviews are discount rates and long term
growth rate. A small change in these specific assumptions could have a significant impact on the value in
use calculation, therefore this is considered a Key Audit Matter.
The Audit and Risk committee’s discussion of this Key Audit Matter is set out on page 79.
How the scope of our audit
responded to the Key Audit
Matter
In order to address the Key Audit Matter, our procedures included the following:
We evaluated the design and determined the implementation of the relevant controls in place over the
Directors’ impairment review process.
We, in conjunction with our valuation specialists, evaluated the methodology applied by the Directors in
preparing the value in use calculations and the judgements applied in determining the CGU.
We challenged the underlying key assumptions within the Group’s impairment model, focusing on the
implicit discount rates and profitability growth rates. We challenged the Group’s scenarios with reference to
recent performance, economic and industry forecasts and trend analysis including historic growth rates
and market available information.
We also challenged the cash flow projections by comparing them to historic rates and Group strategic
plans.
We assessed the reasonableness of related assumptions used in determining terminal values.
We developed an independent view of the key assumptions used in the model, in particular, the Group
discount rate and long term growth rate, and benchmarked the rates used by Directors against market data
and comparable organisations. We also assessed any changes made to the impairment model when
calculating the headroom available.
We evaluated the Directors’ sensitivity analysis and performed our own sensitivity analysis on the key
assumptions used.
We evaluated the completeness and accuracy of the disclosures in relation to goodwill and whether they
meet the requirements of the relevant accounting standards.
Key observations
We have no observations that impact our audit in respect of the amounts and disclosures related to the
carrying value of goodwill.
Independent Auditor’s Report continued
to the members of Greencore Group plc
121Strategic Report | Directors’ Report | Financial Statements
Recoverability of Investment in Subsidiary Undertakings (Company only Key Audit Matter)
Key Audit Matter description
As outlined in Note 1 (Significant Accounting Judgements) to the Company financial statements,
investments in subsidiary undertakings are carried at cost less impairment. Investment in subsidiary
undertakings is significant and represents 99% of total assets recorded on the Company Statement of
Financial Position.
Impairments in subsidiary undertakings are determined with reference to the individual subsidiary
undertakings’ recoverable value, which could have been adversely effected by the current environment.
Directors’ judgements around valuation of investments in subsidiaries are considered significant
judgements given the magnitude of the investments on the Company Statement of Financial Position.
With limited headroom, changes in judgements resulting in reduced recoverable value, could result
in material impairment in the Company income statement.
Given the significant judgement involved in assessing the recoverable value of the investments held in
subsidiary undertakings, we have considered this to be a Key Audit Matter at the Company level.
The Audit and Risk committee’s discussion of this Key Audit Matter is set out on page 79.
How the scope of our audit
responded to the Key Audit
Matter
In order to address the Key Audit Matter, our procedures included the following:
We evaluated the design and determined the implementation of the relevant controls in place over the
Directors’ impairment review process.
We assessed the recoverable value of subsidiary undertakings for any objective indicators of impairment
and tested the accuracy of Directors’ calculations.
We confirmed that the Directors used the most up to date financial information in their valuation models
and assessed the reasonableness of the assumptions made in determining the recoverable amount of their
investment in subsidiaries.
Key observations
We have no observations that impact our audit in respect of the recoverability of investment in subsidiary
undertakings.
Our audit procedures relating to these matters were designed in the context of our audit of the financial statements as a whole, and not to
express an opinion on individual accounts or disclosures. Our opinion on the financial statements is not modified with respect to any of the
risks described above, and we do not express an opinion on these individual matters.
Our application of materiality
We define materiality as the magnitude of misstatement that makes it probable that the economic decisions of a reasonably knowledgeable
person, relying on the financial statements, would be changed or influenced. We use materiality both in planning the scope of our audit work
and in evaluating the results of our work.
We determined materiality for the Group to be £3.0m (2021: £3.0m) which is approximately 0.6% of Net Assets (2021: 0.7% of Net Assets). We
considered Net Assets to be the critical component for determining materiality because it represents the cumulative undistributed gains and
capital and reserves of the Group. In determining materiality, we considered the improvements in profitability, and the increase in the net asset
position of the Group since last year. However, given the additional uncertainties relating to potential impacts of the Russia – Ukraine conflict,
supply chain issues and inflationary pressures, we have considered that remaining at a stable level of Group materiality was most appropriate.
We determined materiality for the Company to be £1.65m (2021: £1.65m) which is approximately 0.4% of Net Assets (2021: 0.4% of Net Assets).
We considered Net Assets to be the critical component for determining materiality because the Company is a non-trading company, itdoes
not generate revenues but incurs costs. Net Assets are of most relevance to the users of the financial statements. Given the additional
uncertainties relating to potential impacts of the Russia – Ukraine conflict, supply chain issues and inflationary pressures, we considered that
remaining at a stable level of the Company materiality was most appropriate.
Net Assets
Materiality
Materiality
£3m
Audit Committee
reporting threshol
d
£0.15m
Ne
t Assets
£465.6m
122 Greencore Group plc Annual Report and Financial Statements 2022
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected
misstatements exceed the materiality for the financial statements as a whole. Performance materiality was set at 80% of materiality for the
Group and Company for the 2022 audit. In determining performance materiality, we considered the following factors:
a. our understanding of the entity and its environment and the impact of various macro-economic factors arising from the Russia – Ukraine conflict;
b. the improvements in financial performance of the Group and Company since last year;
c. uncertainty of the duration and ongoing impact of COVID-19 as well as new risks identified in relation to potential labour shortages, supply
chain disruption and the rising impact of inflation affecting the trading environment;
d. the nature, volume, and size of misstatements (corrected and uncorrected) in the previous audit; and
e. the likelihood of the prior year misstatements to reoccur in current year audit.
We agreed with the Audit Committee that we would report to them any audit differences in excess of £0.15m, as well as differences below
that threshold which, in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure matters
that we identified when assessing the overall presentation of the financial statements.
An overview of the scope of our audit
We determined the scope of our Group audit by obtaining an understanding of the Group and its environment, including Group-wide
controls, and assessing the risks of material misstatement at the Group level. We also considered the impact of the IT security incident (as
disclosed in Note 3 to the financial statements) on our scope and audit approach. Based on that assessment, we focused our Group audit
scope primarily on the audit of 9 trading components which were subject to a full scope audit and 16 non-trading, investment holding or
financing components which were subject to specified audit procedures where the extent of our testing was based on our assessment of the
associated risks of material misstatement and of the materiality of the component operations to the Group. The remaining components of the
Group were subject to analytical procedures.
These components were selected based on the level of coverage achieved and to provide an appropriate basis for undertaking audit work to
address the risks of material misstatement identified above. Our audit work for all components was executed at levels of materiality applicable
to each individual component which were lower than Group materiality and ranged from £0.9m to £2.1m.
At the Group level, we also tested the consolidation process and carried out analytical procedures to confirm our conclusion that there were
no significant risks of material misstatement of the aggregated financial information of the remaining components not subject to a full audit.
100%
22%
0.2%
77.8%
Net Assets
Full Scope Audits
Specified Audit
Procedures
Analytical Procedures
Full Scope Audits
Specified Audit
Procedures
Analytical Procedures
Revenue
Revenue Net Assets
Full Scope Audits 100% 77.8%
Specified Audit Procedures – 22.0%
Analytical Procedures – 0.2%
During the year, the Group audit team, while adopting a hybrid approach of in-person and virtual meetings, attended planning meetings
at a number of significant and non-significant component locations in all key locations. In addition to attending planning meetings, we sent
detailed instructions to our component audit teams, included them in our team briefings, discussed their risk assessment, attended client
planning and closing meetings, and reviewed their audit working papers.
Other information
The other information comprises the information included in the Annual Report and Financial Statements, other than the financial statements and
our auditor’s report thereon. The Directors are responsible for the other information contained within the Annual Report and Financial Statements.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial
statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Independent Auditor’s Report continued
to the members of Greencore Group plc
123Strategic Report | Directors’ Report | Financial Statements
Responsibilities of Directors
As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view and otherwise comply with the Companies Act 2014, and for such internal
control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group and Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors
either intend to liquidate the Group or Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on IAASA’s website at:
http://www.iaasa.ie/getmedia/b2389013-1cf6-458b-9b8f-a98202dc9c3a/Description_of_auditors_responsibilities_for_audit.pdfr.
This description forms part of our auditor’s report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud is detailed below.
Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and
regulations, we considered the following:
• the nature of the industry and sector, control environment and business performance including the design of the Group and Company’s
remuneration policies, key drivers for Directors’ remuneration, bonus levels and performance targets;
• results of our enquiries of management including legal department, Corporate secretary and the Audit and Risk Committee about their
own identification and assessment of the risks of irregularities;
• any matters we identified having obtained and reviewed the Group and Company’s documentation of their policies and procedures
relating to:
– identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
– detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
– the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
• the matters discussed among the audit engagement team, component audit teams and relevant internal specialists, including tax,
valuations, pensions and IT regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified
the greatest potential for fraud in the area of revenue recognition (rebates and discounts). In common with all audits under ISAs (Ireland), we
are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory framework that the Group and Company operates in, focusing on provisions
of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements.
The key laws and regulations we considered in this context included the Companies Act 2014, UK Corporate Governance Code 2018, Listing
Rules, Irish tax laws and UK tax laws.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance
with which may be fundamental to the Group and Company’s ability to operate or to avoid a material penalty. These included the Group and
the Company’s operating license and environmental regulations.
Audit response to risks identified
As a result of performing the above, we did not identify any Key Audit Matters related to the potential risk of fraud or non-compliance with
laws and regulations.
Our procedures to respond to risks identified included the following:
• reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with provisions of relevant
laws and regulations described as having a direct effect on the financial statements;
• enquiring of management, the Audit and Risk Committee and in-house and external legal counsel concerning actual and potential litigation
and claims;
• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due
to fraud;
• reading minutes of meetings of those charged with governance and reviewing internal audit reports;
124 Greencore Group plc Annual Report and Financial Statements 2022
• in addressing the presumed risk of fraud in revenue recognition (rebates and discounts), our procedures included:
– we obtained an understanding of and assessed the relevant controls in place over the various selling and rebate arrangements within
the Group;
– we obtained reconciliations showing movements on rebates and discounts during the year. On a sample basis, we agreed a number
of rebates and discounts for the year to customer agreements and assessed whether there were any material one off or unusual
transactions during the year;
– we considered material adjustments and negotiations which occurred during the year and reviewed the accounting treatment to ensure
compliance with the requirements of IFRS 15.
• in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other
adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating
the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including internal
specialists and component audit teams, and remained alert to any indications of fraud or non-compliance with laws and regulations
throughout the audit.
Report on other legal and regulatory requirements
Opinion on other matters prescribed by the Companies Act 2014
Based solely on the work undertaken in the course of the audit, we report that:
• We have obtained all the information and explanations which we consider necessary for the purposes of our audit.
• In our opinion the accounting records of the Company were sufficient to permit the financial statements to be readily and properly audited.
• The Company Statement of Financial Position is in agreement with the accounting records.
• In our opinion the information given in the Directors’ Report is consistent with the financial statements and the Directors’ Report, and has
been prepared in accordance with the Companies Act 2014.
Corporate Governance Statement
The Listing Rules and ISAs (Ireland) require us to review the Directors’ statement in relation to going concern, longer-term viability and the part
of the Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate Governance Code and
Irish Corporate Governance Annex specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance
Statement is materially consistent with the financial statements and our knowledge obtained during the audit:
• the Directors’ statement with regards the appropriateness of adopting the going concern basis of accounting and any material
uncertainties identified set out on page 113;
• the Directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why the period is
appropriate set out on page 113;
• the Directors’ statement on fair, balanced and understandable set out on page 116;
• the board’s confirmation that it has carried out a robust assessment of the emerging and principal risks and the disclosures in the annual
report that describe the principal risks and the procedures in place to identify emerging risks and an explanation of how they are being
managed or mitigated set out on page 109;
• the section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on
page 77; and
• the section describing the work of the Audit and Risk Committee set out on page 76 to 82.
Matters on which we are required to report by exception
Based on the knowledge and understanding of the Group and the Company and its environment obtained in the course of the audit,
we have not identified material misstatements in the Directors’ Report.
We have nothing to report in respect of the provisions in the Companies Act 2014 which require us to report to you if, in our opinion,
the disclosures of Directors’ remuneration and transactions specified by law are not made.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Section 391 of the Companies Act 2014. Our audit
work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Kevin Sheehan
For and on behalf of Deloitte Ireland LLP
Chartered Accountants and Statutory Audit Firm
Deloitte & Touche House, Earlsfort Terrace, Dublin 2
28 November 2022
Independent Auditor’s Report continued
to the members of Greencore Group plc
Notes: An audit does not provide assurance on the maintenance and integrity of the website, including controls used to achieve this, and in
particular on whether any changes may have occurred to the financial statements since first published. These matters are the responsibility
of the directors but no control procedures can provide absolute assurance in this area.
Legislation in Ireland governing the preparation and dissemination of financial statements differs from legislation in other jurisdictions.
125Strategic Report | Directors’ Report | Financial Statements
Group Income Statement
year ended 30 September 2022
2022* 2021
Notes
Pre-exceptional
£m
Exceptional
(Note 7)
£m
Total
£m
Pre-exceptional
£m
Exceptional
(Note 7)
£m
Total
£m
Revenue 2 1 ,7 39.6 – 1 ,739. 6 1 , 324 . 8 – 1 , 3 24 . 8
Cost of sales (1 , 216.6) – (1 , 216.6) (90 1 .9) – (90 1 .9)
Gross profit 523.0 – 52 3.0 422.9 – 42 2.9
Operating costs before acquisition
related amortisation 3 (4 49.6) (16 .5) (46 6 . 1) (383. 3) 7. 7 (375 .6)
Impairment of trade receivables 22 (1. 2) – (1 . 2) (0.6) – (0.6)
Group operating profit before
acquisition related amortisation 72.2 (16 .5) 55.7 39.0 7. 7 46.7
Amortisation of acquisition related
intangibles (3.6) – (3.6) (3 .9) – (3.9)
Group operating profit 68.6 (16. 5) 52 .1 35 .1 7. 7 42.8
Finance income 8 0.2 – 0.2 0. 1 – 0.1
Finance costs 8 (12 .5) – (1 2 .5) (19. 1) – (1 9. 1)
Profit on disposal of associates 28 – – – – 4.0 4.0
Profit/(loss) before taxation 56. 3 (16. 5) 39.8 16. 1 11 .7 2 7. 8
Taxation 9 (10. 5) 3.0 (7. 5) (2 .5) 0.4 (2 .1)
Profit/(loss) for the financial year 45. 8 (13 .5) 32. 3 1 3.6 12. 1 2 5.7
Attributable to:
Equity shareholders 45 .8 (1 3. 5) 32. 3 13.3 12.1 25.4
Non-controlling interests 28 – – – 0. 3 – 0. 3
45. 8 (13 .5) 32. 3 13 .6 12.1 25.7
Earnings per share (pence)
Basic earnings per share 10 6.2 5.0
Diluted earnings per share 10 6.1 5.0
* The financial year is the 53 week period ended 30 September 2022 with comparatives for the 52 week period ended 24 September 2021
126 Greencore Group plc Annual Report and Financial Statements 2022
Notes
2022*
£m
2021
£m
Items of comprehensive income taken directly to equity
Items that will not be reclassified to profit or loss:
Actuarial gain on Group legacy defined benefit pension schemes 5 14.4 36.3
Tax charge on Group legacy defined benefit pension schemes 9 (4. 1) (1 .1)
10. 3 35. 2
Items that may subsequently be reclassified to profit or loss:
Currency translation adjustment 1 .8 (3. 2)
Translation reserve transferred to income statement on disposal of subsidiary – (1 .0)
Non-controlling interest transferred to Income Statement on disposal of subsidiary – (5.8)
Cash flow hedges:
fair value movement taken to equity 8.5 (0. 5)
transferred to Income Statement (1 .6) 1.2
8.7 (9. 3)
Other comprehensive income for the financial year 19.0 25 .9
Profit for the financial year 32 .3 25 .7
Total comprehensive income for the financial year 51 . 3 51 . 6
Attributable to:
Equity shareholders 51 . 3 5 7. 3
Non-controlling interests – (5 .7)
Total comprehensive income for the financial year 51 . 3 51 . 6
* The financial year is the 53 week period ended 30 September 2022 with comparatives for the 52 week period ended 24 September 2021
Group Statement of Comprehensive Income
year ended 30 September 2022
127Strategic Report | Directors’ Report | Financial Statements
Group Statement of Financial Position
at 30 September 2022
Notes
2022
£m
2021
£m
ASSETS
Non-current assets
Goodwill and intangible assets 12 468.1 47 3 . 3
Property, plant and equipment 13 319. 4 3 0 7. 4
Right-of-use assets 14 44.4 54. 1
Investment property 15 3.1 3.0
Retirement benefit assets 24 3 9.8 42. 1
Derivative financial instruments 21 12 .4 –
Deferred tax assets 9 3 7. 1 48. 1
Trade and other receivables 0.3 0.4
Total non-current assets 924. 6 928 .4
Current assets
Inventories 16 63. 3 4 7. 7
Trade and other receivables 17 248 .7 196. 3
Cash and cash equivalents 19 99. 6 1 19. 1
Derivative financial instruments 21 2 .5 –
Total current assets 414 . 1 363 .1
Total assets 1 ,33 8.7 1 , 291 .5
EQUITY
Capital and reserves attributable to equity holders of the Company
Share capital 25 5. 2 5.3
Share premium 89. 7 89. 7
Reserves 370.7 328. 2
Total equity 465.6 423 . 2
LIABILITIES
Non-current liabilities
Borrowings 20 20 9.8 20 9.1
Lease liabilities 14 33. 6 42 .0
Other payables 18 2 .7 3.7
Derivative financial instruments 21 – 2.7
Provisions 23 5.2 5.5
Retirement benefit obligations 24 60. 1 88 .1
Deferred tax liabilities 9 18.9 18 .2
Total non-current liabilities 330. 3 3 69. 3
Current liabilities
Borrowings 20 69. 8 93 . 1
Trade and other payables 18 445. 1 375. 8
Lease liabilities 14 14.4 1 7. 6
Derivative financial instruments 21 0. 1 2.9
Provisions 23 4.7 2.1
Current tax payable 8.7 7. 5
Total current liabilities 542 .8 499. 0
Total liabilities 873. 1 868. 3
Total equity and liabilities 1 , 338. 7 1 ,291 . 5
On behalf of the Board
Gary Kennedy Emma Hynes
Director Director
128 Greencore Group plc Annual Report and Financial Statements 2022
Notes
2022*
£m
2021
£m
Profit before taxation 39. 8 2 7. 8
Finance income 8 (0. 2) (0.1)
Finance costs 8 12. 5 19. 1
Exceptional items 7 16 .5 (1 1.7)
Group operating profit before exceptional items 68.6 35 .1
Depreciation and impairment of property, plant and equipment and right-of-use assets 13, 14 52 .5 54.6
Amortisation of intangible assets 12 6 .7 7. 0
Employee share-based payment expense 2 .7 2.1
Contributions to Group legacy defined benefit pension scheme 24 (1 1 . 5) (7 .0)
Working capital movement 26 2 .0 33. 2
Net cash inflow from operating activities before exceptional items 121 .0 1 25.0
Cash outflow related to exceptional items 7 (13.6) (3. 3)
Interest paid (including lease liability interest) (16.7) (18.8)
Tax received/(paid) 2.2 (0. 2)
Net cash inflow from operating activities 92.9 102 .7
Cash flow from investing activities
Purchase of property, plant and equipment (48 .6) (3 7. 1)
Purchase of intangible assets (1 .4) (3.1)
Disposal of undertakings 28 – 16. 3
Disposal of investment property 15 – 6. 3
Net cash outflow from investing activities (50.0) (1 7. 6)
Cash flow from financing activities
Proceeds from issue of shares (net of transaction costs) – 8 7. 1
Ordinary Shares purchased – own shares (3.0) –
Capital return via share buyback (8. 8) –
Drawdown/(repayment) of bank borrowings 22 9.6 (1 3 0.9)
Repayment of Private Placement Notes 22 (4 7. 3) –
Settlement of swaps on maturity of Private Placement Notes (2 .6) –
Repayment of lease liabilities 14 (1 7. 3) (1 4.3)
Net cash outflow from financing activities (69. 4) (58. 1)
Net (decrease)/increase in cash and cash equivalents and bank overdrafts (26. 5) 2 7. 0
Reconciliation of opening to closing cash and cash equivalents and bank overdrafts
Cash and cash equivalents and bank overdrafts at beginning of year 19 73.6 4 7. 0
Translation adjustment (0.4) (0.4)
Net (decrease)/increase in cash and cash equivalents and bank overdrafts (26. 5) 2 7. 0
Cash and cash equivalents and bank overdrafts at end of year 19 46.7 73 .6
* The financial year is the 53 week period ended 30 September 2022 with comparatives for the 52 week period ended 24 September 2021
Group Statement of Cash Flows
year ended 30 September 2022
129Strategic Report | Directors’ Report | Financial Statements
Group Statement of Changes in Equity
year ended 30 September 2022
Share
capital
£m
Share
premium
£m
Other
reserves
£m
Retained
earnings
£m
Total
equity
£m
At 24 September 2021 5.3 89. 7 1 21 .4 206.8 423. 2
Items of income and expense taken directly to equity
Actuarial gain on Group legacy defined benefit pension schemes – – – 14 .4 14.4
Tax credit on Group legacy defined benefit pension schemes – – – (4. 1) (4. 1)
Currency translation adjustment – – 1.8 – 1. 8
Cash flow hedge fair value movement taken to equity – – 8. 5 – 8.5
Cash flow hedge transferred to income statement – – (1 .6) – (1 .6)
Profit for the financial year – – – 32 . 3 32 . 3
Total comprehensive income for the financial year – – 8.7 42 .6 51 . 3
Transactions with equity holders of the Company
Employee share-based payments expense – – 3.0 – 3.0
Tax on share-based payments – – – (0.1) (0. 1)
Exercise, lapse or forfeit of share-based payments – – (2 .8) 2 .8 –
Shares acquired by Employee Benefit Trust
(A)
– – (3 .0) – (3.0)
Transfer to retained earnings on grant of shares to beneficiaries of the
Employee Benefit Trust
(B)
– – 0.4 (0.4) –
Capital return via share buyback
(C)
(0. 1) – 0. 1 (8 .8) (8.8)
At 30 September 2022 5.2 89.7 1 2 7. 8 242 .9 465 .6
Share
capital
£m
Share
premium
£m
Other
reserves
£m
Retained
earnings
£m
Total
£m
Non-
controlling
interests
£m
Total
equity
£m
At 25 September 2020 4. 5 0.4 1 2 3.9 1 4 7. 7 276 . 5 5.7 282. 2
Items of income and expense taken directly to equity
Actuarial gain on Group legacy defined benefit pension
schemes – – – 36 .3 36. 3 – 36. 3
Tax credit on Group legacy defined benefit pension
schemes – – – (1 .1) (1 .1) – (1 . 1)
Currency translation adjustment – – (3.0) – (3.0) (0.2) (3. 2)
Translation reserve transferred to Income Statement on
disposal of subsidiary – – (1.0) – (1 .0) – (1 .0)
Non-controlling interest transferred to Income Statement
on disposal of subsidiary – – – – – (5. 8) (5.8)
Cash flow hedge fair value movement taken to equity – – (0.5) – (0. 5) – (0.5)
Cash flow hedge transferred to income statement – – 1.2 – 1.2 – 1.2
Profit for the financial year – – – 25 .4 25.4 0. 3 25 .7
Total comprehensive income for the financial year – – (3.3) 60.6 5 7. 3 (5.7) 51 .6
Transactions with equity holders of the Company
Employee share-based payments expense – – 2.1 – 2.1 – 2. 1
Tax on share-based payments – – – 0. 2 0. 2 – 0.2
Exercise, lapse or forfeit of share-based payments – 0. 1 (2.4) 2.4 0.1 – 0.1
Transfer to retained earnings on grant of shares to
beneficiaries of the Employee Benefit Trust
(B)
– – 1.1 (1 .1) – – –
Shares issued in the year 0.8 8 9. 2 – – 90.0 – 90.0
Transaction costs of share issue – – – (3.0) (3.0) – (3.0)
At 24 September 2021 5.3 8 9.7 1 21.4 2 06.8 42 3. 2 – 423 . 2
130 Greencore Group plc Annual Report and Financial Statements 2022
Other reserves
Share-
based
payment
reserve
(D)
£m
Own
shares
(E)
£m
Undenominated
capital reserve
(F)
£m
Hedging
reserve
(G)
£m
Foreign
currency
translation
reserve
(H)
£m
Total
£m
At 24 September 2021 3.6 (1 .8) 120.4 1. 2 (2 .0) 121 .4
Items of income and expense taken directly to equity
Currency translation adjustment – – – – 1 .8 1.8
Cash flow hedge fair value movement taken to equity – – – 8.5 – 8.5
Cash flow hedge transferred to Income Statement – – – (1 .6) – (1 .6)
Total recognised income and expense for the financial year – – – 6.9 1. 8 8.7
Transactions with equity holders of the Company
Employee share-based payments expense 3 .0 – – – – 3 .0
Exercise, lapse or forfeit of share options (2 .8) – – – – (2 .8)
Shares acquired by Employee Benefit Trust
(A)
– (3.0) – – – (3.0)
Transfer to retained earnings on grant of shares to beneficiaries
of the Employee Benefit Trust
(B)
– 0.4 – – – 0. 4
Capital return via share buyback
(C)
– – 0.1 – – 0.1
At 30 September 2022 3.8 (4 .4) 120. 5 8. 1 (0. 2) 1 2 7. 8
Share-
based
payment
reserve
(D)
£m
Own
shares
(E)
£m
Undenominated
capital reserve
(F)
£m
Hedging
reserve
(G)
£m
Foreign
currency
translation
reserve
(H)
£m
Total
£m
At 25 September 2020 3.9 (2.9) 120.4 0.5 2.0 12 3 .9
Items of income and expense taken directly to equity
Currency translation adjustment – – – – (3.0) (3 .0)
Translation reserve transferred to Income Statement on disposal
of subsidiary – – – – (1 .0) (1 .0)
Cash flow hedge fair value movement taken to equity – – – (0. 5) – (0. 5)
Cash flow hedge transferred to Income Statement – – – 1.2 – 1.2
Total recognised income and expense for the financial year – – – 0.7 (4.0) (3. 3)
Transactions with equity holders of the Company
Employee share-based payments expense 2.1 – – – – 2.1
Exercise, lapse or forfeit of share options (2.4) – – – – (2. 4)
Transfer to retained earnings on grant of shares to beneficiaries
of the Employee Benefit Trust
(B)
– 1 .1 – – – 1.1
At 24 September 2021 3 .6 (1 .8) 120.4 1.2 (2.0) 1 21 .4
(A) Pursuant to the terms of the Employee Benefit Trust 2,180,216 shares (2021: Nil) were purchased during the financial year ended 30 September 2022 for a cash cost of £3 .0m
(2021: £Nil).
(B) During the year, 290,044 (2021: 688,851) shares with a nominal value at the date of transfer of £0.0 029m (2021: £0.0 069m) at a cost of £0.4m (2021: £1 .1m) were
transferred to beneficiaries of the Annual Bonus Plan.
(C) During the year, the Company, Greencore Group plc purchased and subsequently cancelled 9,728,677 Ordinary Shares for a total cash cost of £8.8m as part of the share
buyback programme.
(D) The share-based payment reserve relates to equity settled share-based payments made to employees through the Performance Share Plan, the Annual Bonus Plan, the
ShareSave Scheme and Employee Incentive Scheme. Further information in relation to these share-based payment schemes is set out in Note 6.
(E) The amount included as own shares relates to Ordinary Shares in Greencore Group plc which are held in trust. The shares held in trust are granted to beneficiaries of the
Group’s employee share based payment scheme when the relevant conditions of the scheme are satisfied.
(F) The undenominated capital reserve represents the nominal cost of cancelled shares and the amount transferred to reserves as a result of renominalising the share capital
of Greencore Group plc on conversion to the euro.
(G) The hedging reserve represents the effective portion of gains or losses on hedging instruments from the application of cash flow hedge accounting for which the
underlying hedged transaction is not impacting profit or loss. The cumulative deferred gain or loss on the hedging instrument is reclassified to profit or loss only when
the hedged transaction is no longer expected to occur.
(H) The foreign currency translation reserve reflects the exchange difference arising from the translation of the net investments in foreign operations and on borrowings and
other currency instruments designated as hedges of such investments which are taken to equity. When a foreign operation is sold, exchange differences that are
recorded in equity are recognised in the Group Income Statement as part of the gain or loss on sale.
Group Statement of Changes in Equity continued
year ended 30 September 2022
131Strategic Report | Directors’ Report | Financial Statements
1. Group Statement of accounting policies
General information
Greencore Group plc (‘the Company’), registered number 170116, together with its subsidiaries (‘the Group’) is a manufacturer of convenience
foods in the U.K. The Company is a public limited company incorporated and domiciled in the Republic of Ireland and the Company’s shares
are publicly traded on the London Stock Exchange. The address of its registered office is 2 Northwood Avenue, Northwood Business Park,
Santry, Dublin 9, Ireland, D09 X5N9.
Statement of compliance
The Group Financial Statements of Greencore Group plc have been prepared in accordance with International Financial Reporting Standards
(‘IFRS’) and their interpretations approved by the International Accounting Standards Board (‘IASB’) as adopted by the European Union (‘EU’)
and those parts of the Companies Act 2014, applicable to companies reporting under IFRS.
Basis of preparation
The Group Financial Statements, which are presented in sterling and rounded to the nearest million (unless otherwise stated), have been
prepared on a going concern basis under the historical cost convention, except where assets and liabilities are stated at fair value in
accordance with relevant accounting policies.
The accounting policies applied in the preparation of the Group Financial Statements for the year ended 30 September 2022 have been
applied consistently by the Group and have been consistently applied to all years presented, unless otherwise stated.
The Group Financial Statements are prepared to the Friday nearest to 30 September. Accordingly, these Financial Statements are prepared for
the 53 week period ended 30 September 2022 (‘financial year’). Comparatives are for the 52 week period ended 24 September 2021. The
Statement of Financial Positions for 2022 and 2021 have been prepared as at 30 September 2022 and 24 September 2021 respectively.
The loss attributable to equity shareholders dealt with in the Financial Statements of the Parent Company was £4.8m (2021: loss of £25.3m).
In accordance with Section 304 of the Companies Act 2014, the Company is availing of the exemption from presenting its individual profit
and loss account, which forms part of the approved Financial Statements, to the Annual General Meeting and from filing it with the Registrar
of Companies.
Going concern
The Directors, after making enquiries, have a reasonable expectation that the Group has adequate resources to continue operating as a going
concern for the foreseeable future.
In the current period, the UK trading environment, especially in food to go categories, was resilient notwithstanding some demand volatility
caused by COVID-19 related mobility restrictions in H1 22 and the increasing impact of inflation on the UK consumer during H2 22.
Notwithstanding the inflationary challenges impacting the broader UK food industry at present, there has been limited demand impact to date
in the Group’s categories. The Group also continues to monitor the potential impact of a recessionary environment and cost of living factors
on consumer spending through the year end.
Accordingly, the Directors have considered a number of scenarios for the next 18 months from the year end date. These scenarios consider
the potential impact of a recessionary environment including the impact of inflation and interest rates on consumer spending, along with
consideration of under recovery of inflation, supply chain disruption issues and further one off future events linked to a reduction in consumer
footfall during the winter months. The Group is satisfied that there is sufficient headroom in the financial covenants under current facilities
under each scenario.
The Group’s scenarios assume:
• A base case projection using internally approved forecast and strategic plans, which reflect the external economic environment. These
plans incorporate the potential impact of climate change on the Group’s capital investment process;
• A downside scenario which assesses the potential impact of a recessionary environment including the impact of inflation and interest rates
on consumer spending, along with consideration of under recovery of inflation and further one off future events linked to a reduction in
consumer footfall during the winter months; and
• A severe downside scenario which assesses the further impact of inflation under recovery, along with a further reduction in sales to reflect
the impact of changes in consumer spending through any recessionary period. In this scenario, mitigating actions are assumed including
a reduction in non-business critical capital expenditure and reductions in the amount of the share buyback plan.
While the Group is in a net current liability position of £128.7m (2021: £135.9m) at the 30 September 2022, the Group retained financial
strength and flexibility as at the end of FY22. The Group had cash and undrawn committed bank facilities of £398.0m at 30 September 2022
(September 2021: £433.6m).
Based on these scenarios and the resources available to the Group, the Directors believe the Group has sufficient liquidity to manage through
a range of different cashflow scenarios for the next 18 months from the year end date. Accordingly, the Directors adopt the going concern
basis in preparing these Group Financial Statements.
Notes to the Group Financial Statements
year ended 30 September 2022
132 Greencore Group plc Annual Report and Financial Statements 2022
Notes to the Group Financial Statements continued
year ended 30 September 2022
1. Group Statement of accounting policies continued
Significant accounting judgements and significant sources of estimation uncertainty
The preparation of the Group Financial Statements in accordance with IFRS requires management to make certain estimates, assumptions and
judgements that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Estimates
and underlying assumptions are reviewed on an ongoing basis. Changes in accounting estimates may be necessary if there are changes in the
circumstances on which the estimate was based or as a result of new information or more experience. Therefore, although these estimates
are based on management’s best estimate of the amount, event or actions, actual results ultimately may differ from those estimates. Such
changes are recognised in the year in which the estimate is revised. The Group has considered the impact of climate change on the financial
statements in the going concern assessments, impairment of non-financial assets and as part of the assumptions underpining the retirement
benefit obligations.
Significant accounting judgements
The following are the significant accounting judgements, apart from those involving estimations (which are dealt with separately below) that
are exercised in applying the Group accounting policies:
Going Concern
The Directors have a reasonable expectation that the Group has adequate resources to continue operating as a going concern for the foreseeable
future. This is based on cashflow projections and downside scenario modelling incorporating a recessionary environment in the UK which
includes customer spending constraints and inflation under recovery and potential supply side disruptions for the next 18 months from the
year end date, which is a significant judgement.
The details of the going concern scenarios, key assumptions and mitigating actions are outlined in the going concern statement on page 131.
Based on these scenarios and the resources available to the Group, the Directors believe the Group has sufficient liquidity to manage through
a range of different cashflow scenarios over the next 18 months from the 30 September 2022.
Accounting for exceptional items (Note 7)
The Group consider that items of income or expense which by virtue of their quantitative scale and/or qualitative nature should be disclosed
separately if the Group Financial Statements are to fairly present the financial position and financial performance of the Group. The Group
label these items collectively as ‘exceptional items’.
Determining which transactions are to be considered exceptional in nature is often a subjective matter. However, circumstances that the
Group believe would give rise to exceptional items for separate disclosure are outlined in the exceptional accounting policy on page 140.
All exceptional items are included on the appropriate income statement line item to which they relate. In addition, for clarity, separate
disclosure is made of all items in one column on the face of the Group Income Statement.
Taxation (Note 9)
Provisions for current and deferred taxes require judgement in areas where the treatment of certain items may be the subject of debate with tax
authorities. The Group provide for current and deferred taxes using the method that best predicts the resolution of the uncertainty. The Group
is required to consider the range of possible outcomes for a number of transactions and/or calculations across all the jurisdictions where the
Group is subject to income taxes and to provide for current and deferred taxes accordingly, applying either the ‘expected value method’ or the
‘most likely method’ for each uncertainty dependent on the method that we expect to better predict the resolution of the uncertainty in each
case. The Group consider this to be a judgemental area, due to the increasing complexity and a period of significant change in tax legislation
worldwide.
Recognition of deferred tax assets requires consideration of the value of those assets and the likelihood that those assets will be utilised in the
foreseeable future. The recognition relies on the availability of sound and relatively detailed forecast information regarding the future performance
of the business which has the legal right to utilise the deferred tax assets. The Group performed its assessment of the recovery of deferred tax
assets at 30 September 2022, taking into account the Group’s actual and historic performance, the impact of tax legislation enacted at the reporting
date and the detailed financial forecasts and budgets for the business covering the periods over which the assets are expected to be utilised.
Provisions (Note 23)
The recognition of provisions is a key judgement area in the preparation of the Group Financial Statements due to the uncertainty around the
timing or amount for which the provision will be settled. The Group recognises provisions for property dilapidation, remediation or closure
costs and other items such as restructuring or legal provisions. Provisions are recognised when the Group has a legal or constructive obligation
and judgement is required relating to the level of provision required at the reporting date to satisfy the obligation. These liabilities recognised
in the Group Financial Statements require judgement, as to the level of provision to be recognised, based on the information available to
management at the time of determination of the liability. Provisions are reassessed at each reporting date. The Group holds £9.9m of
provisions at 30 September 2022 (2021: £7.6m).
133Strategic Report | Directors’ Report | Financial Statements
Significant sources of estimation uncertainty
The Group’s significant estimates are those with a significant risk of resulting in a material adjustment to the carrying amounts of assets and
liabilities within the next financial year.
Impairment of goodwill (Note 12)
The Group has capitalised goodwill of £449.4m at 30 September 2022 (2021: £449.4m). Goodwill is required to be tested for impairment at
least annually or more frequently if changes in circumstances or the occurrence of events indicating potential impairment exist. As a result of
the UK external economic environment, the Group has identified the impairment of goodwill as a significant source of estimation uncertainty.
The Group uses the present value of future cash flows to determine the recoverable amount. In calculating the value in use, management
judgement and estimation is required in forecasting cash flows of Cash Generating Units (‘CGUs’), in determining terminal growth values and
in setting an appropriate discount rate. Sensitivities to changes in assumptions are detailed in Note 12.
Post-retirement benefits (Note 24)
The Group has identified post-retirement benefits as a significant source of estimation uncertainty in the preparation of the Group Financial
Statements. The estimation of, and accounting for, retirement benefit obligations involves assessments made in conjunction with independent
actuaries. These involve estimating the actuarial assumptions including mortality rates of members, increase in pension payments and inflation
linked increases to certain obligations and discount rates used in estimating the present value of the schemes assets and liabilities. In FY22,
there was a significant change in the Group’s retirement benefit obligations as a result of changes to the external economic environment.
Details of the financial position of the post-retirement benefit schemes and the sensitivity of assumptions are set out in Note 24.
New standards and interpretations
The following changes to IFRS became effective for the Group during the year but did not result in material changes to the Group’s
consolidated financial statements:
• Interest Rate Benchmark Reform – Phase 2 (amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IAS 16)
• Extension of the Temporary Exemption from Applying IFRS 9 (amendments to IFRS 4)
• COVID-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16)
New and amended standards and interpretations not yet mandatorily effective
The Group has not applied certain new standards, amendments and interpretations to existing standards which are not yet mandatorily effective:
• IFRS 17 Insurance Contracts
• Amendments to IAS 37 Onerous Contracts – Costs of fulfilling a contract
• Annual improvements to IFRS standards 2018 – 2020
• Amendments to IAS 16 Property, Plant and Equipment – Proceeds before intended use
• Amendments to IFRS 3 Reference to the Conceptual Framework
• Amendments to IAS 1 and IFRS Practice Statement 2 Disclosure of Accounting Policies
• Amendments to IAS 8 Definition of Accounting Estimate
• Amendments to IAS 1 Classification of liabilities as current or non-current*
• Amendments to IAS 12 Income Taxes – Deferred tax related to assets and liabilities arising from a single transaction*
• Initial application of IFRS 17 and IFRS 9 – Comparative information (amendments to IFRS 17)*
• Sale or contribution of assets between an investor and its associate or joint venture (amendments to IFRS 10 and IAS 28)*
• Amendments to IAS 1 Non current liabilities with covenants*
• Amendments to IFRS 16 Lease liability in sale and leaseback arrangement*
* The above standards/amendments have not yet been endorsed by the EU
The Company provides guarantees to subsidiaries in respect of bank borrowings which it accounts for as insurance contracts and therefore
further consideration is being provided to the potential impact of IFRS 17. The Group has reviewed the potential impact of other amendments
which are not expected to have a material impact on the Group when adopted.
Basis of consolidation
The Group Financial Statements comprise the Financial Statements of the parent undertaking and its subsidiary undertakings.
Subsidiaries
Subsidiary undertakings are included in the Group Financial Statements from the date on which control over the operating and financial
policies is obtained and cease to be consolidated from the date on which control is transferred out of the Group. The Group controls an
entity when it has power over the entity, or has the rights to, variable returns from its involvement with the entity and has the ability to affect
those returns through its power over the entity. The Group reassess whether or not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the elements of control. All intra-Group transactions, balances and unrealised gains on transactions
between Group undertakings are eliminated on consolidation. Unrealised losses are also eliminated, except where they provide evidence
ofimpairment.
134 Greencore Group plc Annual Report and Financial Statements 2022
Notes to the Group Financial Statements continued
year ended 30 September 2022
1. Group Statement of accounting policies continued
Revenue recognition
The Group’s revenue is primarily derived from the manufacture of convenience food products and all revenue relates to revenue from
contracts with customers. The Group’s customer contracts typically include one performance obligation, with revenue recognised when
the performance obligation is satisfied.
Revenue is measured based on the consideration specified in a contract with a customer and represents the fair value of the sale of goods
and rendering of services to external customers, net of value added tax and rebates in the ordinary course of the Group’s activities. Many of the
Group’s revenue contracts include an element of variable consideration, such as trade discounts, namely in the form of rebate arrangements
or other incentives to customers. The arrangements can take the form of volume and fixed rebates, marketing fund contributions, promotional
fund contributions or lump sum incentives. The Group recognises revenue net of such incentives in the period in which the arrangement
applies, only when it is highly probable a significant reversal in the cumulative amount of revenue will not occur. Volume based rebates are
calculated on the Group’s estimate of rebates expected to be paid to customers using the ‘most likely amount’ in line with IFRS 15 Revenue from
Contracts with Customers requirements, whereas fixed rebates are accounted for as a reduction in revenue over the life of the contract.
Revenue is recognised at a point in time, when control of the goods or services are transferred to the customer, which is deemed to be either
when the goods are dispatched or received by the customer, depending on individual contracts.
Supplier rebates
The Group enters into rebate arrangements with its suppliers, which are volume related. These supplier rebates received are recognised as a
deduction from cost of sales, based on the entitlement that has been earned up to the reporting date, for each relevant supplier arrangement.
Property, plant and equipment
Property, plant and equipment is shown at cost less depreciation and any impairments. The cost of property, plant and equipment comprises
its purchase price and any directly attributable costs.
Depreciation is provided so as to write off the cost less residual value of each item of property, plant and equipment during its expected useful
life using the straight-line method over the following periods:
Freehold and long leasehold buildings 25–50 years
Plant and machinery 3–25 years
Fixtures and fittings 3–25 years
Freehold land and capital work in progress is not depreciated
Useful lives and residual values are reassessed annually.
Subsequent costs incurred relating to specific assets are included in an asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. All other costs are charged to the profit or loss during the financial period in which they are incurred.
The carrying amounts of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that
the carrying amounts may not be recoverable. When the carrying amount exceeds the estimated recoverable amount, the assets are written
down to their recoverable amount.
The recoverable amount of property, plant and equipment is the greater of fair value less costs of disposal and value in use. In assessing value
in use, estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset. Impairment losses are recognised in profit or loss.
An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no
longer exist or may have decreased. If such an indication exists, the recoverable amount is estimated. A previously recognised impairment loss
is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss
was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot
exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in
prior years. Such reversal is recognised in profit or loss. Following the recognition or reversal of an impairment loss, the depreciation charge
applicable to the asset is adjusted prospectively in order to systematically allocate the revised carrying amount, net of any residual value, over
the remaining useful life.
Gains or losses on the disposal of property, plant and equipment represent the difference between the net proceeds and the carrying value at
the date of sale.
Leases
The Group leases various properties, motor vehicles and equipment. Rental contracts are typically made for fixed periods but may have
extension options. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.
135Strategic Report | Directors’ Report | Financial Statements
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A right-of-use asset and lease liability are recognised
at commencement for contracts containing a lease, with the exception of leases with a term of 12 months or less or leases where the
underlying asset is of low value. For those leases, the Group recognises the lease payments as an operating expense on a straight line basis
over the term of the lease unless another more systematic basis is more representative of the time pattern in which the economic benefits
from the leased assets are consumed by the Group.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by
using the interest rate implicit in the lease or if this rate cannot be readily determined, the incremental borrowing rate. Lease payments include
fixed payments, payments for an optional renewal period and termination option payments. The lease term is the non-cancellable period for
which the Group have the right to use an underlying asset, together with (i) periods covered by an option to extend the lease if the Group is
reasonably certain to exercise that option; and (ii) periods covered by an option to terminate the lease if the Group is reasonably certain not
to exercise that option. The Group has applied judgement to determine the lease term for lease contracts that include renewal options and
break clauses.
Following initial recognition, the lease liability is measured at amortised cost using the effective interest method. It is remeasured when there
is a change in future minimum lease payments or when the Group changes its assessment of whether it is reasonably certain to exercise an
option within a contract.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments
made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the asset
less any lease incentives received. After lease commencement, the Group measures right-of-use assets using a cost model, reflecting cost less
accumulated depreciation and impairment. The right-of-use asset is depreciated using the straight-line method from the commencement
date to the earlier of the end of the useful life of the right-of-use asset or the end of lease term.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
• The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise
of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate;
• The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in
which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate unless the lease
payments change is due to a change in a floating interest rate, in which case a revised discount rate is used; or
• A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is
remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the
effective date of the modification.
Goodwill
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree,
and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the
identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets
acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree
and the fair value of the acquirer’s previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a
bargain purchase gain.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. On acquisition, goodwill is allocated to
CGUs expected to benefit from the combination’s synergies. Goodwill is tested annually for impairment or more frequently if events or
changes in circumstances indicate that the carrying value may be impaired. Any impairment is recognised immediately in profit or loss.
Acquisition related intangibles
An intangible asset, which is an identifiable non-monetary asset without physical substance, is capitalised separately from goodwill as part of
a business combination to the extent that it is probable that the expected future economic benefits attributable to the asset will accrue to the
Group and that its fair value can be measured reliably. The asset is deemed to be identifiable when it is separable (i.e. capable of being divided
from the entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, asset or liability) or
when it arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from the Group or from
other rights and obligations.
Subsequent to initial recognition, the acquisition related intangible assets acquired as part of a business combination, are carried at cost less
any accumulated amortisation and any accumulated impairment losses. The carrying amounts of intangible assets with finite lives are
reviewed for indicators of impairment at each reporting date and are subject to impairment testing when events or changes in circumstances
indicate that the carrying values may not be recoverable. Any impairment charge is taken to profit or loss.
The amortisation of intangible assets is calculated to write off the carrying amount of intangible assets with finite lives over their useful lives
on a straight-line basis on the assumption of zero residual value. Customer related intangible assets are amortised over periods ranging from
one to seven years.
136 Greencore Group plc Annual Report and Financial Statements 2022
Notes to the Group Financial Statements continued
year ended 30 September 2022
1. Group Statement of accounting policies continued
Acquisition related intangibles (continued)
The useful life used to amortise intangible assets relates to the future performance of the assets acquired and management’s estimate of the
period over which economic benefit will be derived from the asset. The remaining useful life of intangible assets with finite lives are reviewed
at the end of each reporting period and revised where appropriate to reflect the period over which the Group will receive the economic
benefit from use.
Computer software
Costs incurred on the acquisition of computer software and software licences are capitalised. Other costs directly associated with developing
and upgrading computer software programs are capitalised once the recognition criteria set out in IAS 38 Intangible Assets are met. There is a
full assessment carried out to ensure the computer software does not qualify as software as a service and should be expensed to the profit or
loss in the year.
Following initial recognition, computer software is carried at cost less accumulated amortisation and any accumulated impairment losses.
Amortisation is charged to profit or loss during its expected useful life using the straight-line method over the following periods:
Computer software 3–7 years
The carrying amount of computer software assets are reviewed for indicators of impairment at each reporting date and are subject to
impairment testing when events or changes in circumstances indicate the carrying value may not be recoverable.
Investment property
Investment property is shown at cost less depreciation and any impairment. The cost of investment property comprises its purchase price and
any costs directly attributable to bringing it into working condition for its intended use. Investment property is depreciated so as to write off
the cost, less residual value, on a straight-line basis over the expected life of each property. Freehold buildings held as investment property are
depreciated over their expected useful life, normally assumed to be 40-50 years. Freehold land is not depreciated.
An impairment to investment property is recognised when the carrying value of the asset exceeds the recoverable value. The recoverable value is
determined as the higher of the fair value less costs of disposal and the assets value in use. Fair value is determined by external property valuers.
Rental income arising on investment property is accounted for as an operating lease in line with the requirements of IFRS 16 Leases and is
recognised within other operating income.
In relation to the recognition of income on the disposal of property, income is recognised when there is an unconditional exchange of contracts,
or when all necessary terms and conditions have been fulfilled.
Inventories
Inventories are valued at the lower of cost and net realisable value. Cost is calculated based on first-in, first-out or weighted average as
appropriate. Cost includes raw materials, direct labour expenses and related production and other overheads net of supplier rebates.
Net realisable value is the estimated selling price, in the ordinary course of business, less all costs necessary to make the sale.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an
outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the
amount of the obligation.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the
class of obligation as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same
class of obligation may be small.
Where the Group expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset, but only when the
reimbursement is virtually certain. The expense relating to any provision is recognised in the Group Income Statement net of any reimbursement.
A contingent liability is disclosed where the existence of an obligation will only be confirmed by future events, or where the amount of the
obligation cannot be measured with reasonable reliability. Contingent assets are not recognised but are disclosed where an inflow of
economic benefits is probable.
137Strategic Report | Directors’ Report | Financial Statements
Finance income and finance costs
Finance income comprises interest income on funds invested and the unwind of discount on assets. Interest income is recognised in profit or
loss as it accrues, using the effective interest method.
Finance costs comprises interest expense on borrowings, negative interest, if any, on bank deposits, unwind of discount on liabilities, interest
on lease obligations, interest on the net defined benefit pension scheme liabilities, changes in fair value of hedging instruments and other
derivatives that are recognised in profit or loss. All borrowing costs are recognised in profit or loss using the effective interest method.
Financial instruments
On initial recognition, a financial asset is classified as measured at amortised cost, or fair value through other comprehensive income (‘FVOCI’)
or fair value through profit or loss (‘FVPL’). The classification is based on the business model for managing the financial asset and the contractual
terms of the cashflows. Reclassification of financial assets is required only when the business model for managing those assets changes.
Financial assets are derecognised when the Group’s contractual rights to the cashflows from the financial assets expire, are extinguished or
are transferred to a third party.
Financial liabilities are classified as measured at amortised cost or FVPL. Financial Liabilities are derecognised when the Group’s obligations
specified in the contracts expire, are discharged or cancelled. When an existing financial liability is replaced by another from the same lender
on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as
a derecognition of the original liability, the recognition of a new liability which has the result that the difference in the respective carrying
amounts is recognised, together with any resulting costs.
Cash and cash equivalents and bank overdrafts
Cash and cash equivalents are initially recognised at fair value and subsequently carried at amortised cost. Cash and cash equivalents include
cash in hand, deposits held on call with banks and other short term highly liquid investments that are readily convertible to known amounts
of cash. These are subject to insignificant risk of changes in value and have an original maturity of three months or less.
The Group operates a cash pooling facility which allows subsidiaries of the Group to drawdown on cash from the pool, where the Group has
sufficient cash balances. The cash pooling arrangement operated by the Group includes a legal right of offset however does not meet the
requirements for offsetting in accordance with IAS 32 Financial Instruments: Presentation and as such bank overdrafts are presented separately
to cash on the Group Statement of Financial Position.
Trade and other receivables
Trade and other receivables are initially recognised at transaction price and subsequently carried at amortised cost, net of allowance for
expected credit loss.
The Group applies the simplified approach to providing for expected credit losses (‘ECL’) required by IFRS 9 Financial Instruments, which requires
expected lifetime losses to be recognised from initial recognition of the trade receivables. The Group uses an allowance matrix to measure
the ECL of trade receivables based on its expected loss rates. Expected loss rates are based on historical payment profiles of sales and the
corresponding historical credit loss experience. The historical loss rates are adjusted to reflect current and forward economic factors if there
is evidence to suggest these factors will affect the ability of the customer to settle receivables. The Group has determined the ECL default rate
using market default risk probabilities with regard to its key customers. Balances are written off when the probability of recovery is assessed
as being remote.
Trade receivables are derecognised when the Group no longer controls the contractual rights that to the receivables. This is normally the case
when the asset is sold or the rights to receive cash flows from the asset have expired, and the Group has not retained substantially all the credit
risks and control of the receivable has transferred.
Trade and other payables
Trade and other payables are initially recorded at fair value and subsequently at amortised cost.
Borrowings
All loans and borrowings are initially recognised at fair value less any directly attributable transaction costs. After initial recognition, loans and
borrowings are subsequently measured at amortised cost using the effective interest method.
Borrowings are derecognised when the Group’s obligations specified in the contracts expire, are discharged or cancelled.
When the Group modifies the terms of its debt facilities, it determines if the modification is a substantial or non-substantial modification.
A substantial change is attributable to a change in contractual cashflows of more than 10%, resulting in a derecognition of the existing facilities
and recognition of a new facility. A non-substantial modification to facilities results in the recognition of a modification gain or loss in the
income statement. A modification gain or loss is determined by recalculating the gross carrying value of the borrowings by discounting the
new contractual cash flows using the original effective interest rate. The transaction cost associated with modifying the terms of the
borrowings are spread forward by the adjusted effective interest rate. Borrowings are classified as current liabilities unless the Group has an
unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Accrued interest is recorded in accruals
within current liabilities.
138 Greencore Group plc Annual Report and Financial Statements 2022
Notes to the Group Financial Statements continued
year ended 30 September 2022
1. Group Statement of accounting policies continued
Financial instruments continued
Derivative financial instruments
The activities of the Group expose it to the financial risks of changes in foreign exchange rates and interest rates. The Group uses derivative
financial instruments, such as forward foreign exchange contracts, cross-currency swaps and interest rate swap agreements, to hedge
these exposures.
Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
remeasured at fair value.
Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative. Derivative instruments which are
held for trading and are not designated as effective hedging instruments are classified as a current asset or liability (as appropriate) regardless
of maturity if the Group expects that they may be settled within 12 months of the reporting date. All other derivative instruments that are not
designated as effective hedging instruments are classified by reference to their maturity date. The full fair value of a hedging derivative is
classified as a non-current asset or liability if the remaining maturity of the hedged item is more than 12 months and as a current asset or
liability if the maturity of the hedged item is less than 12 months.
The fair value of derivative instruments is determined by using valuation techniques. The Group uses its judgement to select the most
appropriate valuation methods and makes assumptions that are mainly based on observable market conditions existing at the reporting date.
For those derivatives designated as hedges and for which hedge accounting is sought, the hedging relationship is documented at its inception.
This documentation identifies the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how hedge
effectiveness will be measured throughout its duration. Such hedges are expected at inception to be highly effective in offsetting changes in
fair values or cash flows of hedged items.
For the purposes of hedge accounting, derivatives are classified as:
• Fair value hedges, when hedging the exposure of changes in the fair value of a recognised asset or liability; or
• Cash flow hedges, when hedging the exposure to variability in cash flows that are either attributable to a particular risk associated with
a recognised asset or liability, or a highly probable forecast transaction; or
• Net investment hedges, when hedging the exposure to foreign currency differences between the functional currency of a foreign
operation and the functional currency of the parent.
Any gains or losses arising from changes in the fair value of all other derivatives which are classified as held for trading are taken to the income
statement and charged to finance income or expense. These may arise from derivatives for which hedge accounting is not applied because
they are not designated as hedging instruments. The Group does not use derivatives for trading or speculative purposes.
The hedges that the Group has in place are cash flow hedges and the treatment is set out below:
Cash flow hedge
Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised asset or liability, or a highly
probable forecast transaction, the effective part of any gain or loss on the derivative financial instrument is recognised within equity in the
hedging reserve, with the ineffective portion being reported in the income statement as finance income or finance costs. When a highly
probable forecast transaction results in the recognition of a non-financial asset or liability, the cumulative gain or loss is removed from the
hedging reserve in equity and included in the initial measurement of the non-financial asset or liability. Otherwise, the associated gains and
losses that had previously been recognised within equity in the hedging reserve are transferred to the income statement as the cash flows of
the hedged item impact profit or loss.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, exercised or no longer qualifies for hedge
accounting. At that point in time, any cumulative gain or loss on the hedging instrument recognised within equity in the hedging reserve is
kept in the hedging reserve until the forecast transaction occurs. If a hedged transaction is no longer anticipated to occur, the net cumulative
gain or loss recognised within equity in the hedging reserve is transferred immediately to the income statement as finance costs.
Taxation
The charge/credit for the year comprises current and deferred tax. Tax is recognised in profit or loss except to the extent that it relates to items
recognised in the Group Statement of Comprehensive Income or directly in equity, in which case the tax is also recognised in the Group
Statement of Comprehensive Income or directly in equity, respectively.
Current tax payable represents the expected tax payable on the taxable income for the year, using tax rates and tax laws enacted or
substantively enacted at the reporting date, along with any adjustment to tax payable in respect of previous years.
139Strategic Report | Directors’ Report | Financial Statements
The Group provides in full for deferred tax assets and liabilities (using the liability method), arising from temporary differences between the tax
base of assets and liabilities and their carrying amounts in the Group Financial Statements except where they arise from the initial recognition
of goodwill or from the initial recognition of an asset or liability that at the date of initial recognition does not affect accounting or taxable
profit or loss on a transaction that is not a business combination. Such differences result in an obligation to pay more tax or a right to pay less
tax in future periods. A deferred tax asset is only recognised where it is probable that future taxable profits will be available against which the
temporary differences giving rise to the asset can be utilised.
Deferred tax assets and liabilities are not subject to discounting and are measured at the tax rates that are enacted or substantively enacted at
the reporting date.
Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal
of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
The Group is subject to income taxes in a number of jurisdictions. Judgement is required in determining the Group’s provision for income taxes.
There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business.
The Group recognises liabilities for tax uncertainties based on estimates of whether additional taxes will be due. Where the final tax outcome
of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax
provisions in the period in which such determination is made. Once it has been concluded that a liability needs to be recognised, the liability is
measured based on either (i) the most likely amount or (ii) the expected value depending on which method the Group expects to better predict
the resolution of the uncertainty. The assessment is based on the judgement of tax professionals within the Group supported by previous
experience in respect of such activities and in certain cases based on specialist independent advice.
Employee benefits
Defined contribution pension plans
A defined contribution pension plan is a plan under which the Group pays fixed contributions into a separate defined contribution scheme.
Obligations for contributions to defined contribution pension plans are recognised as an expense within profit or loss as employee service
is received.
Defined benefit pension plans
All of the legacy defined benefit pension schemes have been closed to future accrual since 31 December 2009. The cost of providing
benefits under the Group’s defined benefit pension plans is determined separately for each plan, using the projected unit credit method,
by professionally qualified actuaries and arrived at using actuarial assumptions based on market expectations at the reporting date. These
valuations attribute entitlement benefits to the current and prior periods to determine current service costs and the present value of defined
benefit pension obligations.
Re-measurements, comprising of actuarial gains and losses and the return on plan assets (excluding net interest), are recognised immediately
in the Group Statement of Financial Position with a corresponding debit or credit to retained earnings through the Group Statement of
Comprehensive Income in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.
Past service costs are recognised in profit or loss on the earlier of:
• The date of the plan amendment or curtailment; and
• The date that the Group recognises restructuring-related costs.
Net interest is calculated by applying the discount rate to the net defined benefit pension liability or asset.
When a settlement (eliminating all obligations for defined benefits already accrued) or a curtailment (reducing future obligations as a result
of a material reduction in the scheme membership or a reduction in future entitlement) occurs, the obligation and related plan assets are
remeasured using current actuarial assumptions and the resultant gain or loss is recognised in profit or loss during the period in which the
settlement or curtailment occurs.
The Group seeks ways to reduce its liabilities through various restructuring activities. When a qualifying insurance policy is purchased for
the scheme liabilities, this is treated as a plan asset and the fair value of the insurance policy is deemed to be the present value of the related
obligations. A settlement will only arise in winding up a scheme, when the Group enters into a transaction that eliminates all further legal or
constructive obligations for part or all the benefits provided under a defined benefit plan.
The defined benefit pension asset or liability in the Group Statement of Financial Position comprises the total, for each plan, of the present
value of the defined benefit pension obligation (using a discount rate based on high quality corporate bonds) less the fair value of plan assets
out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is
the published bid price. For unquoted securities, the most recent publicly available information is used to calculate the fair value, which may
differ from the year end date. The value of a net pension benefit asset is the present value of any economic benefit the Group reasonably
expects to recover by way of refund of surplus from the plan at the end of the plan’s life or reduction in future contributions to the plan.
140 Greencore Group plc Annual Report and Financial Statements 2022
Notes to the Group Financial Statements continued
year ended 30 September 2022
1. Group Statement of accounting policies continued
Employee share-based payments
The Group grants equity settled share-based payments to employees (through the Performance Share Plan, the Annual Bonus Plan, Employee
Sharesave Scheme and Employee Share Incentive Plan). The fair value of these is determined at the date of grant and is expensed to profit or
loss with a corresponding increase in equity on a straight-line basis over the vesting period. The fair value is determined using an appropriate
valuation model, as measured at the date of grant, excluding the impact of any non-market conditions. Non-market vesting conditions are
included in assumptions about the number of options that are expected to vest. At each reporting date, the Group revises its estimates of the
number of options or awards that are expected to vest, recognising any adjustment in profit or loss, with a corresponding adjustment to equity.
To the extent that the Group receives a tax deduction relating to services paid for by means of share awards or options, deferred tax is provided
on the basis of the difference between the market price of the underlying equity as at the date of grant and the exercise price of the option.
As a result, the deferred tax impact of share options will not directly correlate with the expense reported in profit or loss.
To the extent that the deductible difference exceeds the cumulative charge to the Group Income Statement, it is recorded in equity. When the
exercise of share options results in the issuance of shares, the proceeds received are credited to the share capital and share premium accounts.
Foreign currency
Functional and presentational currency
The individual financial statements of each Group entity are measured in the currency of the primary economic environment in which the
entity operates (the functional currency). The Group Financial Statements are presented in sterling, which is also the Company’s functional
and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation at year-end exchange rates of
monetary assets and liabilities denominated in foreign currencies, are recognised in the Group Income Statement, except when deferred in
equity as qualifying cash flow hedges.
Foreign operations
The income statement and statement of financial position of Group entities that have a functional currency different from the presentation
currency of the Company are translated into the presentation currency as follows:
• Assets and liabilities are translated at the closing rate at the reporting date;
• Income and expense items are translated at the average exchange rates for the year, unless exchange rates fluctuate significantly during
that period, in which case the exchange rates at the date of transactions are used; and
• All resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of the net investment in foreign operations and on long term borrowings
and other currency instruments designated as hedges of such investments, are taken to equity. When a foreign operation is sold, exchange
differences that were recorded in equity are recognised in the Group Income Statement as part of the gain or loss on sale.
Research and development
Expenditure on research and development is recognised as an expense in the period in which it is incurred. An asset is recognised only when
all the conditions set out in IAS 38 Intangible Assets are met.
Segmental reporting
The operating segment, Convenience Foods UK and Ireland, is reported in a manner consistent with the internal management structure of the
Group and the internal financial information provided to the Group’s Chief Operating Decision Maker who is responsible for making strategic
decisions, allocating resources, monitoring and assessing the performance of the segment. The Group reports segmental information by
product category and geographical area. Note 2 sets out the operating and reportable segment of the Group.
Exceptional items
The Group has adopted an income statement format that seeks to highlight exceptional items within the Group’s results for the year.
Judgement is used by the Group in assessing the particular items which by virtue of their quantitative scale and/or qualitative nature should
be disclosed as exceptional items. Such items may include, but are not limited to, significant reorganisation programmes, profits or losses
on termination of operations, significant impairments of assets, transaction and integration costs related to acquisition activity, transaction
costs related to disposal activity and litigation costs and settlement. Exceptional items are included in a separate column within the income
statement caption to which they relate and are separately disclosed in the notes to the Group Financial Statements. Where an item that has
been classified as exceptional spans more than one reporting period such as a multi-year restructuring programme, it will also be presented
as exceptional in the following period for consistency of presentation. The Group separately presents the cash paid for exceptional items
in the Group Statement of Cash Flows and the tax impact in the exceptional note disclosure.
141Strategic Report | Directors’ Report | Financial Statements
Share capital
Ordinary Shares
Ordinary Shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are taken as a deduction
from equity, net of tax, from the proceeds.
Own Share Reserve
The Own Share Reserve relates to Ordinary Shares in the Company, which are held in trust. The shares held in trust are granted
to the beneficiaries of the Group’s employee share award scheme when the relevant conditions of the scheme are satisfied, with a transfer
between the own share reserve and retained earnings when the transfer occurs.
2. Segment information
Convenience Foods UK and Ireland is the Group’s operating segment, which represents its reporting segment. This reflects the Group’s
organisational structure and the nature of the financial information reported to and assessed by the Chief Operating Decision Maker (‘CODM’)
as defined by IFRS 8 Operating Segments. In November 2021, the Group’s then Chief Executive Officer (‘CEO’) informed the Board of Directors
he was stepping down from his position as Executive Director and CEO with effect from 30 March 2022. From the date of his departure, the
CODM moved to being the Board of Directors and continues to be the Board of Directors.
This segment incorporates UK convenience food categories including sandwiches, salads, sushi, chilled snacking, chilled ready meals, chilled
soups and sauces, chilled quiche, ambient sauces and pickles and frozen Yorkshire Puddings as well as the Irish ingredients trading business.
Convenience Foods
UK & Ireland
2022
£m
2021
£m
Revenue 1,739.6 1,324.8
Group operating profit before exceptional items and amortisation of acquisition related intangible assets 72.2 39.0
Amortisation of acquisition related intangible assets (3.6) (3.9)
Group operating profit before exceptional items 68.6 35.1
Finance income 0.2 0.1
Finance costs (12.5) (19.1)
Exceptional items (16.5) 11.7
Taxation (7.5) (2.1)
Profit for the year 32.3 25.7
The following table disaggregates revenue by product categories in the Convenience Foods UK and Ireland reporting segment. The Group’s
revenue by geography is included on page 142.
2022
£m
2021
£m
Revenue
Food to go categories 1,161.3 842.1
Other convenience categories 578.3 482.7
Total revenue for Convenience Foods UK and Ireland 1,739.6 1,324.8
Food to go categories include sandwiches, salads, sushi and chilled snacking while the other convenience categories include chilled ready
meals, chilled soups and sauces, chilled quiche, ambient sauces and pickles, and frozen Yorkshire Puddings as well as an Irish ingredients
trading business.
Revenue earned individually from three customers in Convenience Foods UK and Ireland of £316.0m, £261.0m and £196.3m each respectively
represents more than 10% of the Group’s revenue (2021: Revenue earned individually from four customers in Convenience Foods UK and
Ireland of £278.1m, £168.1m, £145.0m and £133.9m each respectively represents more than 10% of the Group’s revenue).
Segment assets and liabilities
All assets and liabilities are allocated to the Convenience Foods UK and Ireland segment. As such, an analysis of assets and liabilities has not
been included in this disclosure.
142 Greencore Group plc Annual Report and Financial Statements 2022
Notes to the Group Financial Statements continued
year ended 30 September 2022
2. Segment information continued
Other segment information
Convenience Foods
UK & Ireland
2022
£m
2021
£m
Capital additions* 50.4 35.9
Depreciation 51.6 50.2
Amortisation of computer software and other intangibles 3.1 3.1
Amortisation of acquisition related intangible assets – Customer related 3.6 3.9
Non-current assets (excluding derivative financial instruments, retirement benefit assets and deferred tax assets) 835.3 838.2
Geographic analysis
Ireland UK
Convenience Foods
UK & Ireland
2022
£m
2021
£m
2022
£m
2021
£m
2022
£m
2021
£m
Revenue 92.0 58.8 1,647.6 1,266.0 1,739.6 1,324.8
Capital additions* – – 50.4 35.9 50.4 35.9
Non-current assets (excluding derivative
financial instruments, retirement benefit
assets and deferred tax assets) 6.6 7.3 828.7 830.9 835.3 838.2
* This denotes capital additions for property, plant and equipment and software and other intangibles
3. Operating costs before acquisition related amortisation
2022
£m
2021
£m
Administrative expenses 367.5 321.6
Distribution costs 70.9 53.8
Research and development 8.9 7. 2
Other operating costs 4.1 6.5
Other operating income (1.8) (5.8)
Total operating costs before acquisition related amortisation 449.6 383.3
Exceptional items (Note 7) 16.5 (7.7)
Total operating costs before acquisition related amortisation 466.1 375.6
Additional analysis of the key costs for administrative expenses have been included below:
2022
£m
2021
£m
Employee related costs 209.4 185.6
Depreciation/Amortisation 54.7 53.3
Factory utility and overhead costs 63.2 45.8
Professional fees and other administrative costs 40.2 36.9
Total administrative expenses 367.5 321.6
IT security incident
In December 2021, the Group experienced an IT security incident that resulted in temporary unauthorised access to part of the Group’s IT
systems. The Group recognised gross costs of £10.5m relating to the disruption to operations and professional fees incurred and £8.6m of
insurance income as a result of insurance claims arising from the IT security incident resulting in a net expense recognised in profit or loss
of£1.9m.
143Strategic Report | Directors’ Report | Financial Statements
4. Result for the financial year
The result for the Group for the financial year has been arrived at after charging/(crediting) the following amounts:
2022
£m
2021
£m
Depreciation:
Property, plant and equipment 36.0 35.3
Right-of-use assets 15.6 14.9
51.6 50.2
Amortisation of intangible assets 6.7 7.0
Lease rentals charge for low value and short term leases 5.6 1.0
Rental income from investment properties (0.1) (0.1)
2022
£m
2021
£m
Directors’ remuneration
Emoluments and fees 1.9 2.1
Pension costs – defined contribution plans 0.1 0.2
Gain on exercise of share-based payment options 0.1 0.1
Total 2.1 2.4
During the current financial year, there were amounts accruing for four of the Directors under pension schemes (2021: two).
2022
£000
2021
£000
Auditor’s remuneration
Fees charged by the statutory audit firm:
Audit of the Group and subsidiaries financial statements* 797 605
Audit of the Company financial statements 42 –
Audit related assurance services – –
Other assurance services 25 25
Total 864 630
* Included within the £605k shown in the prior year is £35k relating to the audit of the Company financial statements. In the current year, the amount for the audit of the
Company financial statements has been presented separately.
5. Employment
The average monthly number of persons (including Executive Directors) employed by the Group during the year was:
2022
Number
2021
Number
Production 9,615 8,614
Distribution 1,544 1,341
Administration 2,732 2,525
13,891 12,480
The staff costs for the year for the above employees were:
2022
£m
2021
£m
Wages and salaries 380.9 306.4
Social insurance costs 35.9 28.2
Employee share-based payment expense (Note 6) 3.0 2.1
Termination costs 4.8 –
Pension costs – defined contribution plans (Note 24) 14.1 12.8
438.7 349.5
Legacy defined benefit interest cost (Note 24) 1.1 1.7
439.8 351.2
144 Greencore Group plc Annual Report and Financial Statements 2022
Notes to the Group Financial Statements continued
year ended 30 September 2022
5. Employment continued
During the prior year, the Group furloughed a number of employees across its sites for varying periods of time, availing of the Coronavirus
Job Retention Scheme. All conditions had been met under the terms of the grant and the Group recognised income amounts of £8.7m with
respect to the scheme. The grant was netted against the associated employee related costs. There were no claims made under the scheme in
the current year.
Total staff costs recognised in the Group profit or loss were £437.5m (2021: £348.8m) while £2.3m of staff costs were capitalised during the
year (2021: £2.4m).
Actuarial gain on Group legacy defined benefit schemes recognised in the Group Statement of Other Comprehensive Income:
2022
£m
2021
£m
Return on plan assets (Note 24) (141.9) 31.1
Actuarial gain arising on scheme liabilities (Note 24) 156.3 5.2
Total gain taken directly to equity 14.4 36.3
6. Share-based payments
The Group operates a number of employee share award schemes which are equity settled share-based payments as defined in IFRS 2
Share-based payments. A recognised valuation methodology is employed to determine the fair value of awards granted as set out in the
standard. The charge incurred relating to these awards is recognised within operating costs. Detail of each of the employee share schemes
operated by the Group are set out below.
Annual Bonus Plan
Senior Executives participate in the Annual Bonus Plan as outlined in the Report on Directors’ Remuneration. In accordance with this plan,
a deferred share award equal to a proportion of the cash bonus is awarded to the participating executives. The number of shares is calculated
at market value on the date of allocation, to be held by a trustee for the benefit of individual participants without any additional performance
conditions other than three years of service. The shares vest after three years but are forfeit should an executive voluntarily leave the Group
within the three year time period, subject to normal ‘good leaver’ provisions. The charge recognised in the Group Income Statement was
£0.5m (2021: £0.9m) with £0.2m (2021: £0.9m) being recognised within operating costs and £0.3m (2021: £Nil) being recognised within
exceptional items.
The share price on the grant date, for awards granted in December 2021 was £1.29 (December 2020: £1.18).
On 1 December 2021 and 1 December 2020, 862,426 and 563,239 respectively, awards were granted to Senior Executives of the Group under
the Annual Bonus Plan.
The following table illustrates the number of, and movements in, share awards during the year under the plan:
2022
Number
outstanding
2021
Number
outstanding
At beginning of year 942,200 801,226
Granted 862,426 563,239
Vested (264,968) (378,078)
Forfeit (220,568) (44,187)
At end of year 1,319,090 942,200
Exercisable at end of year 426,857 –
Awards will be granted to Senior Executives of the Group under the Annual Bonus Plan in respect of the year ended 30 September 2022.
A charge amounting to £0.05m (2021: £0.2m) relating to awards to Executive Directors and £0.1m (2021: £0.2m) relating to awards to other
senior executives has been included in the Group Income Statement in respect of the estimated 2022 charge. The total fair value of the
awards will be taken as a charge to the Group Income Statement over the vesting period of the awards.
Performance Share Plan
Certain employees participate in a long term incentive scheme, the Performance Share Plan. In accordance with the scheme rules,
participants are awarded an allotment of shares which will vest over three years subject to vesting conditions based on growth in Adjusted
Earnings per Share, Return on Invested Capital and relative Total Shareholder Return (TSR). An additional two year future service period will
apply to Executive Directors’ vested shares before they are released.
In January 2021, the Group introduced different vesting conditions for awards granted which included an absolute TSR and a relative TSR
component. In addition, the awards granted have graded vesting periods of one, two and three years with a two year and one year holding
period for awards vesting within three years.
145Strategic Report | Directors’ Report | Financial Statements
The number of shares granted is calculated based on the market value on the date of allocation. Share awards are forfeit should an executive
voluntarily leave the Group prior to the vesting date, subject to normal ‘good leaver’ provisions. The fair value of the award has attributed
a value to each vesting condition. The relative TSR is fair valued using a Monte Carlo simulation as described further in this note.
A charge amounting to £0.9m (2021: £0.3m) was included in the Group Income Statement in the year ended 30 September 2022 relating
to these awards for all Performance Share Plan awards granted from December 2018 onwards.
The following table illustrates the number of, and movements in, share awards during the year under the plan:
2022
Number
outstanding
2021
Number
outstanding
At beginning of year 7,707,473 5,580,887
Granted 3,048,764 4,110,686
Vested – (286,887)
Expired (2,575,145) (1,250,252)
Forfeit (2,091,998) (446,961)
At end of year 6,089,094 7,707,473
Exercisable at end of year – –
Sharesave Schemes
The Group operates savings-related share option schemes in both the UK and Ireland. Options are granted at a discount of between 20% and
25% of the market price at the date of invitation over three year savings contracts and options are exercisable during the six month period
following completion of the savings contract. The charge recognised in the Group Income Statement in respect of these options was £1.2m
(2021: £0.9m). Grant date fair value was arrived at by applying a trinomial model, which is a lattice option-pricing model.
During the year ended 30 September 2022, 6,231,802 Sharesave Scheme options were granted in the UK only, which will ordinarily be
exercisable at an exercise price of £0.91 per share, during the period 1 September 2025 to 28 February 2026. The weighted average fair value
of share options granted during the year ended 30 September 2022 was £0.11.
During the prior year ended 24 September 2021, 5,860,829 Sharesave Scheme options were granted in the UK only, which will ordinarily be
exercisable at an exercise price of £1.06 per share, during the period 1 September 2024 to 28 February 2025. The weighted average fair value
of share options granted during the year ended 24 September 2021 was £0.46.
Number and weighted average exercise price for the UK Sharesave Scheme (expressed in sterling)
The following table sets out the number and weighted average exercise prices (expressed in sterling) of, and movements in, share options
during the year under the UK ShareSave Scheme:
2022 2021
Number
outstanding
Weighted
average
exercise price
£
Number
outstanding
Weighted
average
exercise price
£
At beginning of year 14,253,181 1.16 11,932,460 1.28
Granted 6,231,802 0.91 5,860,829 1.06
Exercised (11,853) 1.14 (32,264) 1.52
Expired (1,261,628) 1.42 (743,643) 1.83
Forfeit (5,705,343) 1.12 (2,764,201) 1.26
At end of year 13,506,159 1.04 14,253,181 1.16
Exercisable at end of year 542,545 1.66 1,011,353 1.48
Range of exercise prices for the UK Sharesave scheme (expressed in sterling)
At end of year Exercisable at end of year
Number
outstanding
Weighted
average
contract life
years
Weighted
average
exercise price
£
Number
exercisable
Weighted
average
exercise price
£
At 30 September 2022
£0.01-£1.00 5,926,561 3.27 0.91 – –
£1.01-£2.00 7,579,598 1.63 1.14 542,545 1.66
13,506,159 3.25 1.04 542,545 1.66
At 24 September 2021
£1.01-£2.00 14,253,181 2.48 1.16 1,011,353 1.48
14,253,181 2.48 1.16 1,011,353 1.48
146 Greencore Group plc Annual Report and Financial Statements 2022
Notes to the Group Financial Statements continued
year ended 30 September 2022
6. Share-based payments continued
Sharesave Schemes continued
Number and weighted average exercise prices for the Irish Sharesave Scheme (expressed in euro)
The following table sets out the number and weighted average exercise prices (expressed in euro) of, and movements in, share options during
the year under the Irish ShareSave Scheme:
2022 2021
Number
outstanding
Weighted
average
exercise price
€
Number
outstanding
Weighted
average
exercise price
€
At beginning of year 147,996 1.30 168,575 1.31
Exercised (6,722) 1.19 – –
Expired (28,805) 1.57 (2,228) 2.11
Forfeit (31,093) 1.19 (18,351) 1.26
At end of year 81,376 1.26 147,996 1.30
Exercisable at end of year 10,285 1.75 28,805 1.57
Range of exercise prices for the Irish Sharesave Scheme (expressed in euro)
At end of year Exercisable at end of year
Number
outstanding
Weighted
average
contract life
years
Weighted
average
exercise price
€
Number
exercisable
Weighted
average
exercise price
€
At 30 September 2022
€1.01-€2.00 81,376 1.13 1.26 10,285 1.75
81,376 1.13 1.26 10,285 1.75
At 24 September 2021
€1.01-€2.00 147,996 1.82 1.30 28,805 1.57
147,996 1.82 1.30 28,805 1.57
Employee Share Incentive Plan
In January 2022, the Group launched a new share scheme for all UK employees. The number of shares is calculated at market value on the
date of allocation, to be held by a Trustee for the benefit of individual participants without any additional performance conditions other than
three years of service. The shares vest after three years but are forfeit should an employee voluntarily leave the Group within the three year
time period, subject to normal ‘good leaver’ provisions. The charge recognised in the Group Income Statement was £0.4m.
The share price on the grant date, for awards granted in January 2022 was £1.35.
The following table illustrates the number of, and movements in, share awards during the year under the plan:
2022
Number
outstanding
At beginning of year –
Granted 2,180,216
Exercised (18,768)
Forfeit (250,056)
At end of year 1,911,392
Exercisable at end of year –
147Strategic Report | Directors’ Report | Financial Statements
Weighted average assumptions used to value the share schemes
Annual Bonus Plan and Employee Share Incentive Plan
The fair value of awards granted under the Annual Bonus Plan and the Employee Share Incentive Plan are equal to the share price on the
grant date.
Performance Share Plan
All vesting conditions relating to the awards will be equally weighted when assessing the fair value at grant date. In the current year, this was
December 2021. The TSR component has been valued using a Monte Carlo simulation model which also incorporates the relative volatility of
the identified peer group with whom the Group are compared to assess the TSR vesting condition. The following table shows the weighted
average assumptions used to fair value the equity settled awards granted.
FY22
PSP TSR
FY21
PSP TSR
one year
vesting
FY21
PSP TSR
two year
vesting
FY21
PSP TSR
three year
vesting
Dividend yield (%) 2.39% 0% 0.54% 1.47%
Expected volatility (%) 40.63% 52.46% 42.66% 44.71%
Risk-free interest rate (%) 0.52% (0.13%) (0.13%) (0.03%)
Expected life of option (years) 3 1 2 3
Holding period (years) 0 2 1 0
Share price at grant (£) £1.33 £1.10 £1.10 £1.10
Fair value (£) £0.59 £0.32 £0.21 £0.17
Sharesave Schemes
The Sharesave Schemes equity settled options are also valued at the fair value on grant date, which was in July 2022 in the current year, and
are calculated by applying a trinomial model. The following table shows the weighted average assumptions used to fair value the equity
settled options granted.
2022
UK Sharesave
2021
UK Sharesave
Dividend yield (%) 4.31% 1.24%
Expected volatility (%) 39.70% 45.72%
Risk-free interest rate (%) 1.75% 0.13%
Employee failure-to-save rate (p.a.) (%) 20.63% 20.63%
Expected life of option (years) 3 3
Share price at grant (£) £0.96 £1.30
Exercise price (£) £0.91 £1.06
Fair value (£) £0.11 £0.46
The expected volatility is estimated based on the historic volatility of the Company’s share price over a period equivalent to the life of the
relevant option. The risk-free rate of return is the yield on a government bond of a term consistent with the life of the option.
The range of the Company’s share price during the year was £0.71 – £1.47 (2021: £0.89 – £1.71). The average share price during the 2022
financial year was £1.17 (2021: £1.31).
7. Exceptional items
Exceptional items are those which, as set out in our accounting policy, are disclosed separately by virtue of their nature or amount. Such items
are included within the Group Income Statement caption to which they relate.
The Group reports the following exceptional items:
2022
£m
2021
£m
Reorganisation costs (A) (16.1) –
Restructuring costs for legacy defined benefit pension schemes (B) (0.4) (4.0)
Profit on disposal of Molasses trading businesses (C) – 11.3
Non-core property related income (D) – 3.3
Legacy business provisions (E) – 1.1
Total exceptional items before taxation (16.5) 11.7
Tax credit on exceptional items 3.0 0.4
Total exceptional items (13.5) 12.1
148 Greencore Group plc Annual Report and Financial Statements 2022
Notes to the Group Financial Statements continued
year ended 30 September 2022
7. Exceptional items continued
(A) Reorganisation costs
In the current year, the Group commenced a change programme “Better Greencore”, which is to support revitalisation of its excellence cost
efficiency programmes and unlock cost efficiencies by reducing organisational complexity. The Group recognised a charge of £8.5m in
respect of consultancy fees and £7.6m in respect of personnel exit costs. Better Greencore is expected to continue in FY23 with a focus on
operational and technological excellence as part of the next phase of the programme.
(B) Restructuring costs for legacy defined benefit pension schemes
The Group incurred a charge of £0.4m in the current year and £4.0m in the prior year in relation to restructuring costs associated with its
legacy defined benefit pension schemes in Ireland.
(C) Profit on disposal of Molasses trading businesses
In the prior year, the Group completed the disposal of its interest in the Molasses trading businesses recognising a profit on disposal of £11.3m.
(D) Non-core property related income
In the prior year, the Group recognised a reversal of an impairment of £3.3m prior to the disposal of an investment property in the UK.
(E) Legacy business provisions
During the prior year, the Group recognised a net credit of £1.1m relating to legacy provisions on discontinued operations.
Cash flow on exceptional items
The total net cash outflow during the year in respect of exceptional charges was £13.6m (2021: £3.3m), of which £0.8m was in respect of prior
year exceptional charges.
8. Finance costs and finance income
2022
£m
2021
£m
Finance income
Interest on bank deposits 0.2 –
Foreign exchange on inter-company and external balances where hedge accounting is not applied – 0.1
Total finance income 0.2 0.1
Finance costs
Finance costs on interest bearing cash and cash equivalents, borrowings and other financing costs (11.3) (15.0)
Interest on lease obligations (Note 14) (1.2) (1.3)
Net pension financing charge (Note 24) (1.1) (1.7)
Unwind of discount on liabilities (0.1) (0.1)
Change in fair value of derivatives and related debt adjustment 1.9 (1.0)
Foreign exchange on inter-company and external balances where hedge accounting is not applied (0.7) –
Total finance costs (12.5) (19.1)
Recognised directly in equity
Currency translation adjustment 1.8 (3.0)
Effective portion of changes in fair value of cash flow hedges 8.5 (0.5)
10.3 (3.5)
There were £0.4m of interest costs capitalised in the year (2021: £Nil)
149Strategic Report | Directors’ Report | Financial Statements
9. Taxation
2022
£m
2021
£m
Current tax
Corporation tax charge – 0.4
Overseas tax charge 6.6 2.7
Adjustment in respect of prior years (3.8) (4.7)
Total current tax charge/(credit) (pre-exceptional) 2.8 (1.6)
Deferred tax
Origination and reversal of temporary differences 2.9 2.4
Legacy defined benefit pension obligations 2.6 0.9
Effect of tax rate change 1.5 (2.5)
Employee share-based payments (0.1) (0.1)
Adjustment in respect of prior years 0.8 3.4
Total deferred tax charge (pre-exceptional) 7.7 4.1
Income tax expense (pre-exceptional) 10.5 2.5
Tax on exceptional items
Current tax credit (2.9) –
Deferred tax credit (0.1) (0.4)
Tax credit on exceptional items (3.0) (0.4)
Total tax charge for the year 7.5 2.1
Tax relating to items taken directly to equity
Deferred tax relating to items taken directly to equity
Effect of tax rate change – (5.5)
Actuarial gain on Group legacy defined benefit pension schemes 4.1 6.6
Employee share-based payments 0.1 (0.2)
Total deferred tax charge in equity for the year 4.2 0.9
Reconciliation of total tax charge
The tax charge for the year can be reconciled to the profit per the Group Income Statement as follows:
2022
£m
2021
£m
Profit for the financial year 32.3 25.7
Adjusted For:
Tax charge for the year 7.5 2.1
Profit before tax 39.8 27.8
Tax charge at Irish corporation tax rate of 12.5% (2021:12.5%) 5.0 3.5
Effects of:
Expenses not deductible for tax purposes 0.7 3.1
Differences in effective tax rates on overseas earnings 2.9 1.6
Effect of current year losses not recognised 0.4 –
Utilisation of losses not previously recognised – (0.5)
Effect of rate change in the UK 1.5 (2.5)
Non-taxable exceptional items – (1.8)
Adjustment in respect of prior years (3.0) (1.3)
Total tax charge for the year 7.5 2.1
150 Greencore Group plc Annual Report and Financial Statements 2022
Notes to the Group Financial Statements continued
year ended 30 September 2022
9. Taxation continued
Deferred taxation
The Group’s deferred tax assets and liabilities are analysed as follows:
Property,
plant and
equipment
£m
Acquisition
related
intangibles
£m
Retirement
benefit
obligations
£m
Tax
losses
£m
Employee
share-
based
payment
£m
Other
£m
Total
£m
Year ended 30 September 2022
At 24 September 2021 (9.5) (3.6) 16.7 23.2 0.5 2.6 29.9
Income Statement (charge)/credit (1.8) 0.9 (2.6) (4.5) 0.1 0.2 (7.7)
Tax recorded in equity – – (4.1) – (0.1) – (4.2)
Exceptional items (Note 7) – – – 0.1 – – 0.1
Currency translation adjustment and other – – (0.1) 0.1 – 0.1 0.1
At 30 September 2022 (11.3) (2.7) 9.9 18.9 0.5 2.9 18.2
Deferred tax assets (deductible temporary differences) – – 14.8 18.9 0.5 2.9 37. 1
Deferred tax liabilities (taxable temporary differences) (11.3) (2.7) (4.9) – – – (18.9)
Net deferred tax asset/(liability) (11.3) (2.7) 9.9 18.9 0.5 2.9 18.2
Property,
plant and
equipment
£m
Acquisition
related
intangibles
£m
Retirement
benefit
obligations
£m
Tax
losses
£m
Employee
share-based
payment
£m
Other
£m
Total
£m
Year ended 24 September 2021
At 25 September 2020 (2.9) (3.5) 18.3 20.2 0.3 1.8 34.2
Income Statement (charge)/credit (7.0) (0.1) (0.9) 3.0 – 0.9 (4.1)
Tax recorded in equity – – (1.1) – 0.2 – (0.9)
Exceptional items – – 0.4 – – – 0.4
Disposals 0.4 – – – – – 0.4
Currency translation adjustment and other – – – – – (0.1) (0.1)
At 24 September 2021 (9.5) (3.6) 16.7 23.2 0.5 2.6 29.9
Deferred tax assets (deductible temporary differences) – – 21.8 23.2 0.5 2.6 48.1
Deferred tax liabilities (taxable temporary differences) (9.5) (3.6) (5.1) – – – (18.2)
Net deferred tax asset/(liability) (9.5) (3.6) 16.7 23.2 0.5 2.6 29.9
The Group has not provided deferred tax in relation to temporary differences of approximately £300m (2021: £300m) applicable to
investments in subsidiaries on the basis that the Group can control the timing and realisation of these temporary differences, and it is probable
that the temporary difference will not reverse in the foreseeable future. No provision has been recognised in respect of deferred tax relating to
unremitted earnings of subsidiaries as there is no commitment to remit earnings.
No deferred tax asset is recognised in respect of certain tax losses and other attributes incurred by the Group on the grounds that there is
insufficient evidence that the assets will be recoverable. In the event that sufficient profits are generated in the relevant jurisdictions in the
future, these assets may be recovered. The unrecognised deferred tax asset at 30 September 2022 was £42.2m (2021: £37.7m) which has been
calculated based on the tax rate applicable to the jurisdiction to which the losses relate and has been translated to the Group presentation
currency at the closing rate on 30 September 2022.
The total gross unrecognised tax losses are £197.3m (2021: £201.4m). There is no expiry date for losses in any jurisdiction. Deferred tax assets,
to the extent that the Directors consider they are recoverable, have been recognised. The unrecognised deferred tax asset at 30 September
2022 in respect of capital losses was £14.3m (2021: £14.5m), which has been translated to the Group’s presentation currency translated at the
closing rate at 30 September 2022 and which corresponds to gross unrecognised tax losses of £54.7m (2021: £55.6m). Recognition of
deferred tax assets is a key judgement in the Group Financial Statements as disclosed in Note 1.
151Strategic Report | Directors’ Report | Financial Statements
Factors that may impact future tax charges and other disclosures
The tax charge in future periods will be impacted by any changes to the corporation tax rates in force in the jurisdictions in which the Group
operates. On 3 March 2021, the UK Government announced an increase in the UK rate of corporation tax from 19% to 25%, to be effective
from 1 April 2023. Following a period of uncertainty where a reversal of the increase was proposed, this rate change was reconfirmed by the
UK Government in October 2022.
This change was enacted in the prior period, such that closing UK-related deferred tax balances have been calculated using the 25% tax rate
where appropriate. Also in the prior period, the UK Government announced the introduction of a new relief for certain capital expenditure.
The new ‘superdeduction’ gives an incremental deduction of an additional 30% of qualifying cost. The superdeduction applies for qualifying
expenditure incurred between 1 April 2021 and 31 March 2023. The Group has made initial claims for qualifying expenditure incurred in FY21
and will make additional claims for FY22 and FY23 in due course. Any claim for the superdeduction will have the effect of reducing the
effective tax rate in periods claimed.
The Organisation for Economic Cooperation & Development (‘OECD’) announced on 8 October 2021 that, effective from 2023, its members
had agreed to set a global corporate minimum tax rate of 15%. The implementation of these rules, referred to as ‘Pillar Two’ is expected to be
effective for accounting periods commencing on or after 31 December 2023 and will therefore impact the Group in the accounting period
ending September 2025. The Group is headquartered and has operations in Ireland, which currently has a corporation tax rate of 12.5%. Whilst
there has been no proposal to raise the Irish rate of corporation tax, it is likely that the implementation of the Pillar Two rules may impact the
Group’s tax charge in future periods. The Group will evaluate the impact as the implementation date approaches.
The Group is subject to income tax in different jurisdictions. Judgement is required in determining the Group’s provision for income taxes and
deferred taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course
of business. The Group recognises liabilities for uncertain tax positions based on estimates of whether additional taxes will be due, using the
method that we expect to better predict the resolution of the uncertainty in each case. Where the final tax outcome of these matters is
different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in
which such determination is made. Adjustments in respect of prior periods arose largely on the closure of open periods.
10. Earnings per Ordinary Share
Basic earnings per Ordinary Share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average
number of Ordinary Shares in issue during the year, excluding Ordinary Shares purchased by the Company and held in trust in respect of the
Annual Bonus Scheme and the Performance Share Plan.
Diluted earnings per Ordinary Share is calculated by adjusting the weighted average number of Ordinary Shares outstanding to assume
conversion of all dilutive potential Ordinary Shares.
The numerator for adjusted basic earnings per share is calculated as profit attributable to equity holders of the Company adjusted to exclude
exceptional items (net of tax), the effect of foreign exchange (‘FX’) on inter-company and certain external balances where hedge accounting is
not applied, the movement in the fair value of all derivative financial instruments and related debt adjustments, the amortisation of acquisition
related intangible assets (net of tax) and the effect of interest expense relating to legacy defined benefit pension liabilities (net of tax).
In the current year, the Group repurchased 9,728,677 Ordinary Shares in the Company, by way of a share buyback, costing £8.8m. These
shares were immediately cancelled. The effect of this on the weighted average number of ordinary shares was a decrease of 774,827 shares.
In the prior year, the Group raised £90.0m by way of an equity placing completed on 26 November 2020. The Group issued 80,357,142
Ordinary Shares in the Company on the London Stock Exchange, at a placing price of 112 pence per Ordinary Share. The effect of this on the
weighted average number of ordinary shares was an increase of 66,707,436 shares.
The total Ordinary Shares in issue at 30 September 2022 was 516,836,560 (2021: 526,546,662).
Numerator for earnings per share and adjusted earnings per share calculations
2022
£m
2021
£m
Profit attributable to equity holders of the Company (numerator for earnings per share calculations) 32.3 25.4
Exceptional items (net of tax) 13.5 (12.1)
Movement in fair value of derivative financial instruments and related debt adjustments (1.9) 1.0
FX effect on inter-company and external balances where hedge accounting is not applied 0.7 (0.1)
Amortisation of acquisition related intangible assets (net of tax) 2.7 3.2
Pension financing (net of tax) 0.8 1.4
Numerator for adjusted earnings per share calculations 48.1 18.8
152 Greencore Group plc Annual Report and Financial Statements 2022
Notes to the Group Financial Statements continued
year ended 30 September 2022
10. Earnings per Ordinary Share continued
Denominator for basic earnings per share and adjusted earnings per share calculations
2022
‘000
2021
‘000
Shares in issue at the beginning of the year 526,547 446,157
Effect of shares held by Employee Benefit Trust (2,403) (1,116)
Effect of shares issued during the year 13 16
Effect of share buyback and cancellation in the year (775) –
Effect of shares issued in equity placing in the year – 66,707
Weighted average number of Ordinary Shares in issue during the year 523,382 511,764
Denominator for diluted earnings per share calculations
Employee Performance Share Plan awards, which are performance based, are treated as contingently issuable shares, because their issue is
contingent upon satisfaction of specified performance conditions in addition to the passage of time. These contingently issuable Ordinary
Shares are excluded from the computation of diluted earnings per Ordinary Share where the conditions governing exercisability have not been
satisfied as at the end of the reporting period.
A total of 17,031,830 (2021: 11,843,501) unvested shares were excluded from the diluted earnings per share calculation as they were either
antidilutive or contingently issuable Ordinary Shares which had not satisfied the performance conditions attaching at the end of the 2022
financial year.
A reconciliation of the weighted average number of Ordinary Shares used for the purpose of calculating the diluted earnings per share
amounts is as follows:
2022
‘000
2021
‘000
Weighted average number of Ordinary Shares in issue during the year 523,382 511,764
Dilutive effect of share options 2,123 660
Weighted average number of Ordinary Shares for diluted earnings per share 525,505 512,424
Earnings per share calculations
2022
Total
pence
2021
Total
pence
Basic earnings per Ordinary Share 6.2 5.0
Adjusted earnings per Ordinary Share 9.2 3.7
Diluted earnings per Ordinary Share 6.1 5.0
11. Dividends paid and proposed
There were no dividends paid in the current or prior year and there are no dividends proposed to be paid.
In the current year, the first phase of the value return to shareholders completed with £8.8m value returned up to 30 September 2022 in the
form of a share buyback, with £10.0m buyback completed on 6 October 2022. As announced in May 2022, it is the Group’s intention to return
£50.0m of value to shareholders over the next two years, with the Group planning to return £15.0m in 2023.
153Strategic Report | Directors’ Report | Financial Statements
12. Goodwill and intangible assets
Goodwill
£m
Acquisition
related
intangible assets
– customer
related
£m
Computer
software and
other
intangibles
£m
Total
£m
Year ended 30 September 2022
At 24 September 2021 449.4 14.7 9.2 473.3
Additions – – 1.5 1.5
Amortisation charge – (3.6) (3.1) (6.7)
Currency translation adjustment – – – –
At 30 September 2022 449.4 11.1 7.6 468.1
Year ended 30 September 2022
Cost 460.0 52.3 20.6 532.9
Accumulated impairment/amortisation (10.6) (41.2) (13.0) (64.8)
At 30 September 2022 449.4 11.1 7.6 468.1
Goodwill
£m
Acquistion
related intangible
assets
- customer
related
£m
Compuer
software and
other
intangibles
£m
Total
£m
Year ended 24 September 2021
At 25 September 2020 449.6 18.6 10.3 478.5
Additions – – 2.0 2.0
Amortisation charge – (3.9) (3.1) (7.0)
Currency translation adjustment (0.2) – – (0.2)
At 24 September 2021 449.4 14.7 9.2 473.3
Year ended 24 September 2021
Cost 460.0 52.3 23.0 535.3
Accumulated impairment/amortisation (10.6) (37.6) (13.8) (62.0)
At 24 September 2021 449.4 14.7 9.2 473.3
Goodwill and impairment testing
Goodwill acquired in business combinations is allocated, at acquisition, to the cash generating units (‘CGU’s) that are expected to benefit from
that business combination. The Group has allocated goodwill to its two CGUs, Convenience Foods UK and Ingredients and Property trading
businesses. The CGUs represent the lowest level within the Group at which the associated goodwill is assessed for internal management
purposes and are not larger than the operating segment determined in accordance with IFRS 8 Operating Segments. A summary of the
allocation of the carrying value of goodwill by CGU is as follows:
2022
£m
2021
£m
Convenience Foods UK 447.4 4 47.4
Ingredients and Property 2.0 2.0
449.4 449.4
The recoverable amount of the Group’s CGUs has been determined based on a value in use calculation. The cash flow forecasts employed for
this calculation are based on the approved FY23 budget and two year strategic plan and specifically excludes incremental profits and other
cash flows stemming from any potential future acquisitions. A long term growth rate of 2% (2021: 2%) is then applied to the year three cash
flows.
A present value of the future cash flows is calculated using a pre-tax discount rate which represents the Group’s pre-tax weighted average
cost of capital calculated using the Capital Asset Pricing Model, adjusted to reflect risks associated with the CGUs. The discount rate applied to
the Convenience Foods UK CGU was 11% (2021: 10%) and to Ingredients and Property CGU was 10% (2021: 9%).
154 Greencore Group plc Annual Report and Financial Statements 2022
Notes to the Group Financial Statements continued
year ended 30 September 2022
12. Goodwill and intangible assets continued
The market capitalisation of the Group at 30 September 2022 was below the Group’s net asset value at that date, which is an indicator of
impairment. This has been considered in the impairment testing performed. Assumptions underpinning the projected cashflows include
management’s estimates of future profitability, long term growth rates and discount rates. The cash flow forecasts and key assumptions are
generally determined based on historical performance together with management’s expectation of future trends consistent with external
sources of information pertaining to estimated growth of the UK convenience food market as well as the Irish Ingredients market. In the
current year, the cash flow forecasts reflect the uncertainty in the external economic environment including the impact of inflation and cost
ofliving.
Applying these techniques, no impairment charge arose in 2022 (2021: £Nil).
The table below sets out the approach used to determine the values assigned to each key assumption for the purpose of impairment testing
for the Convenience Foods UK CGU and the Ingredients and Property CGU:
Key assumptions Basis for determining values assigned to key assumptions
Profitability growth
Future profitability is based on the FY23 budget and FY24 and FY25 strategic plan which have been adjusted to
take into account the potential impact of the recessionary environment and cost of living factors.
Long term growth rate
A long-term growth rate of 2% (FY21: 2%) has been used in extrapolating the cashflows from 2025 to perpetuity.
While there is uncertainty in the short term in the external economic environment, the Group has determined
that 2% is representative of the rate that will apply in the longer term.
Discount rate
The discount rate has increased in the current year for the Convenience Foods UK CGU and Ingredients and
Property CGU, from 10% and 9% at 24 September 2021 to 11% and 10% respectively at 30 September 2022.
This reflects the economic uncertainty in the market place.
Sensitivity analysis
Sensitivity analysis has been carried out on each of the key assumptions used in the value in use calculation for each CGU. Changes in the
assumptions would lead to an impairment where there is a decline of 30% in projected cash flows, a reduction in the inflationary linked long
term growth rate by 344 bps or an increase in the discount rate by 397 bps. Notwithstanding this analysis the Group believes that any
reasonable change in the assumptions applied would not give rise to the carrying value of goodwill exceeding the recoverable amount of
each CGU.
13. Property, plant and equipment
Land and
buildings
£m
Plant and
machinery
£m
Fixtures and
fittings
£m
Capital work
in progress
£m
Total
£m
Year ended 30 September 2022
At 24 September 2021 154.6 119.1 16.3 17.4 307.4
Additions 0.2 1.7 0.8 46.2 48.9
Depreciation charge (10.9) (19.8) (5.3) – (36.0)
Impairments (0.2) (0.6) (0.1) – (0.9)
Reclassifications 14.8 34.1 1.0 (49.9) –
At 30 September 2022 158.5 134.5 12.7 13.7 319.4
Year ended 30 September 2022
Cost 256.5 315.2 46.7 13.7 632.1
Accumulated depreciation (98.0) (180.7) (34.0) – (312.7)
At 30 September 2022 158.5 134.5 12.7 13.7 319.4
155Strategic Report | Directors’ Report | Financial Statements
Land and
buildings
£m
Plant and
machinery
£m
Fixtures and
fittings
£m
Capital work
in progress
£m
Total
£m
Year ended 24 September 2021
At 25 September 2020 161.6 122.3 19.9 9.4 313.2
Additions – 1.9 0.7 31.3 33.9
Depreciation charge (10.7) (18.9) (5.7) – (35.3)
Impairments (0.7) (3.6) (0.1) – (4.4)
Reclassifications 4.4 17.4 1.5 (23.3) –
At 24 September 2021 154.6 119.1 16.3 17.4 307.4
Year ended 24 September 2021
Cost 241.5 279.4 44.9 17.4 583.2
Accumulated depreciation (86.9) (160.3) (28.6) – (275.8)
At 24 September 2021 154.6 119.1 16.3 17.4 307.4
At 30 September 2022, the Group’s market capitalisation was lower than the Group’s net assets which is an indicator of impairment and
therefore an impairment review was performed. The Group recognised an impairment charge of £0.9m (2021: £4.4m) following review.
Thiswas charged to operating costs in the Group Income Statement in both the current and the prior year.
14. Leases
The movement in the Group’s right-of-use assets during the year is as follows:
Land and
buildings
£m
Plant and
machinery
£m
Motor
vehicles
£m
Total
£m
Year ended 30 September 2022
At 24 September 2021 34.5 8.6 11.0 54.1
Additions 0.4 2.6 3.8 6.8
Disposals – (0.3) (0.6) (0.9)
Depreciation charge for the year (5.6) (3.3) (6.7) (15.6)
Right-of-use assets at 30 September 2022 29.3 7.6 7.5 44.4
Land and
buildings
£m
Plant and
machinery
£m
Motor
vehicles
£m
Total
£m
Year ended 24 September 2021
At 25 September 2020 36.4 5.1 14.1 55.6
Additions 4.5 6.3 4.2 15.0
Disposals (0.8) (0.1) (0.7) (1.6)
Depreciation charge for the year (5.6) (2.7) (6.6) (14.9)
Right-of-use assets at 24 September 2021 34.5 8.6 11.0 54.1
The movement in the Group’s lease liabilities during the year is as follows:
2022
£m
2021
£m
At beginning of year 59.6 60.7
Additions 6.6 14.6
Disposals (0.9) (1.4)
Payments for lease liabilities (17.3) (14.3)
Payments for lease interest (1.2) (1.3)
Lease interest charge 1.2 1.3
At end of year 48.0 59.6
156 Greencore Group plc Annual Report and Financial Statements 2022
Notes to the Group Financial Statements continued
year ended 30 September 2022
14. Leases continued
An analysis of the maturity profile of the discounted lease liabilities arising from the Group’s leasing activities is as follows:
2022
£m
2021
£m
Within one year 14.4 17.6
Between one and five years 26.3 31.5
Over 5 years 7.3 10.5
Total 48.0 59.6
Analysed as:
Current liabilities 14.4 17.6
Non-current liabilities 33.6 42.0
Total 48.0 59.6
The Group avails of the exemption from capitalising lease costs for short-term leases and low-value assets where the relevant criteria are met.
The following lease costs have been charged to the Group Income Statement as incurred:
2022
£m
2021
£m
Short-term leases 5.4 0.9
Leases of low-value assets 0.2 0.1
Total 5.6 1.0
The total cash outflow for lease payments during the year was as follows:
2022
£m
2021
£m
Cash outflow for short-term leases and leases of low value 5.6 1.0
Lease payments relating to capitalised right-of-use leased assets 17.3 14.3
Interest payments relating to lease obligations 1.2 1.3
Total 24.1 16.6
15. Investment property
2022
£m
2021
£m
At beginning of the year 3.0 6.1
Reversal of impairment – 3.3
Disposal – (6.3)
Currency translation adjustment 0.1 (0.1)
At end of year* 3.1 3.0
Analysed as:
Cost 3.1 3.0
Accumulated depreciation – –
At end of year* 3.1 3.0
* The majority of the Group’s investment property is land and therefore not depreciated.
The carrying value of the Group’s investment properties at 30 September 2022 was £3.1m (2021: £3.0m) which reflects its fair value. The
valuations were carried out by the Group using external independent valuers and property brokers and was arrived at by reference to location,
market conditions and status of planning applications. The fair values of investment properties are considered a Level 3 fair value disclosure.
In the prior year, £3.3m of impairment was reversed following a review of the recoverable value of an investment property at Corby,
Northamptonshire, UK. The property was sold for £6.3m in September 2021.
An increase or decrease in the price per hectare of 5% would result in a 5% or £0.2m increase or decrease in the fair value of the land.
157Strategic Report | Directors’ Report | Financial Statements
16. Inventories
2022
£m
2021
£m
Raw materials and consumables 38.2 27.3
Work in progress 0.4 0.3
Finished goods and goods for resale 24.7 20.1
63.3 47.7
None of the above carrying amounts have been pledged as security for liabilities entered into by the Group.
Inventory recognised within cost of sales 847.4 628.1
The amount recognised as an expense for inventory write-downs for the year, was £4.5m (2021: £4.3m).
17. Trade and other receivables
2022
£m
2021
£m
Current
Trade receivables 179.5 145.6
Other receivables 42.5 31.5
Prepayments 14.5 12.2
VAT 12.1 6.8
Contract costs 0.1 0.2
Total 248.7 196.3
The fair value of current receivables approximates book value due to their size and short-term nature.
Approximately £36.0m (2021: £36.0m) of the Group’s trade receivables are secured against pension liabilities. See Note 24 for further details.
The Group’s exposure to credit and currency risk and impairment losses related to trade receivables and other receivables is set out in Note 22.
18. Trade and other payables
2022
£m
2021
£m
Current
Trade payables 295.8 238.1
Employment related taxes 11.7 8.6
Other payables and accrued expenses 137.6 129.1
Subtotal – current 445.1 375.8
Non-current
Other payables 2.7 3.7
Total 447.8 379.5
The Group’s exposure to liquidity and currency risk is disclosed in Note 22.
19. Cash and cash equivalents and bank overdrafts
2022
£m
2021
£m
Cash at bank and in hand 99.6 119.1
Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods, between one
day and one month, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit
rates. The fair value of cash and cash equivalents equals the carrying amount.
For the purposes of the Group Statement of Cash Flows, cash and cash equivalents and bank overdrafts are presented net as follows:
2022
£m
2021
£m
Cash at bank and in hand 99.6 119.1
Bank overdraft (Note 20) (52.9) (45.5)
Total cash and cash equivalents and bank overdrafts 46.7 73.6
158 Greencore Group plc Annual Report and Financial Statements 2022
Notes to the Group Financial Statements continued
year ended 30 September 2022
20. Borrowings
2022
£m
2021
£m
Current
Bank overdrafts 52.9 45.5
Private placement notes 16.9 47.6
Total current borrowings 69.8 93.1
Non-current
Bank borrowings 158.8 150.1
Private placement notes 51.0 59.0
Total non-current borrowings 209.8 209.1
Total borrowings 279.6 302.2
The maturity of borrowings is as follows:
2022
£m
2021
£m
Less than 1 year 69.8 93.1
Between 1 and 2 years 111.9 64.6
Between 2 and 5 years 97.9 144.5
279.6 302.2
The exposure of the Group’s borrowings to interest rate changes and the contractual repricing dates at the statement of financial position date
are as follows:
2022
£m
2021
£m
6 months or less 158.8 150.1
1 – 5 years 67.9 106.6
226.7 256.7
The average spread that the Group paid on its financing facilities in the year ended 30 September 2022 was 2.16% (2021: 3.41%).
Bank overdrafts are part of the Group cash pooling arrangement and therefore are not exposed to interest rate changes.
Bank borrowings
The Group’s bank borrowings are denominated in sterling. At 30 September 2022 interest is set at commercial rates based on a spread above
SONIA.
The Group’s bank borrowings, net of finance fees comprised of £158.8m at 30 September 2022 (September 2021: £150.1m) with maturities
ranging from March 2023 to January 2026, the earliest of which is the Group’s £75.0m revolving credit bank facility which matures in March
2023 and has not been drawn to date. The Group had £350.0m (September 2021: £360.0m) of undrawn committed bank facilities in respect
of which all conditions precedent had been met. Uncommitted facilities undrawn at 30 September 2022 amounted to £9.5m (September
2021: £6.7m).
Private Placement Notes
The Group’s outstanding Private Placement Notes net of finance fees comprised of £67.9m (denominated as $55.9m and £18m) at
30 September 2022 (2021: £106.6m, denominated as $120.9m and £18m). These were issued as fixed rate debt in June 2016 ($55.9m and
£18m) with maturities ranging between June 2023 and June 2026. The Group repaid the $65m Private Placement Note in full in October 2021.
The Group has swapped the $55.9m Private Placement Notes from fixed rate US Dollar to fixed rate sterling using cross–currency interest rate
swaps. The fixed rate US dollar to fixed rate sterling swaps are designated as cash flow hedges.
Guarantees
The Group’s financing facilities are secured by guarantees from Greencore Group plc and cross-guarantees from various companies within
the Group. The Group treats these guarantees as insurance contracts and accounts for them as such.
159Strategic Report | Directors’ Report | Financial Statements
Interest rate profile
The interest rate profile of cash and cash equivalents and borrowings at 30 September 2022 was as follows:
Australian dollar
£m
US dollar
£m
Euro
£m
Sterling
£m
Total
£m
Floating rate net debt 0.1 (1.4) 5.8 (26.5) (22.0)
Fixed rate net debt – (50.0) – (108.0) (158.0)
Total 0.1 (51.4) 5.8 (134.5) (180.0)
The interest rate profile of cash and cash equivalents and borrowings at 24 September 2021 was as follows:
Australian dollar
£m
US dollar
£m
Euro
£m
Sterling
£m
Total
£m
Floating rate net debt 0.2 – 4.9 18.9 24.0
Fixed rate net debt – (88.6) – (118.5) (207.1)
Total 0.2 (88.6) 4.9 (99.6) (183.1)
21. Derivative financial instruments
Derivative financial instruments recognised as assets and liabilities in the Statement of Financial Position are analysed as follows:
2022
Assets
£m
Liabilities
£m
Net
£m
Current
Cross-currency interest rate swaps – cash flow hedges 1.5 – 1.5
Forward foreign exchange contracts – not designated as hedges 1.0 (0.1) 0.9
2.5 (0.1) 2.4
Non-current
Cross-currency interest rate swaps – cash flow hedges 5.9 – 5.9
Interest rate swaps – cash flow hedges 6.4 – 6.4
Forward foreign exchange contracts – not designated as hedges 0.1 – 0.1
12.4 – 12.4
Total 14.9 (0.1) 14.8
2021
Assets
£m
Liabilities
£m
Net
£m
Current
Cross-currency interest rate swaps – cash flow hedges – (2.1) (2.1)
Interest rate swaps – cash flow hedges – (0.5) (0.5)
Forward foreign exchange contracts – not designated as hedges – (0.3) (0.3)
– (2.9) (2.9)
Non-current
Cross-currency interest rate swaps – cash flow hedges – (2.6) (2.6)
Interest rate swaps – cash flow hedges – (0.1) (0.1)
– (2.7) (2.7)
Total – (5.6) (5.6)
160 Greencore Group plc Annual Report and Financial Statements 2022
Notes to the Group Financial Statements continued
year ended 30 September 2022
21. Derivative financial instruments continued
Derivative instruments which are held for trading and are not designated as effective hedging instruments are classified as a current asset or
liability (as appropriate) regardless of maturity if the Group expects that they may be settled within 12 months of the date. Derivative
instruments that are designated as effective hedging instruments are classified as a current or non-current asset or liability by reference to the
maturity of the hedged item. All other derivative instruments are classified by reference to their maturity date.
Cross-currency interest rate swaps
The Group utilises cross currency interest rate swaps to convert fixed rate US dollar Private Placement Notes into fixed rate sterling liabilities.
Interest rate swaps
The Group utilises interest rate swaps to convert floating rate sterling into fixed rate debt liabilities.
The principal amount of the Group’s borrowings which are swapped at 30 September 2022 total £90.0m (2021: £100.0m). At 30 September
2022, the fixed interest rates varied from 0.504% to 0.660% (2021: 0.504% to 2.095%) which mature in October 2023 and October 2024.
Forward foreign exchange contracts
The notional principal amounts of outstanding forward foreign exchange contracts at 30 September 2022 total £47.4m (2021: £32.2m). No
outstanding forward foreign exchange contracts are designated as cash flow hedges as at 30 September 2022 (2021: £Nil).
22. Financial risk management and financial instruments
Financial risk management objectives and policies
The Group’s activities expose it to a variety of financial risks that include interest rate risk, foreign currency risk, liquidity risk, credit risk and
price risk. These financial risks are actively managed by the Group’s treasury and purchasing departments under strict policies and guidelines
approved by the Board of Directors. The Group’s treasury department actively monitors market conditions with a view to minimising the
exposure of the Group to changing market factors while at the same time minimising the volatility of the funding costs of the Group. The
Group uses derivative financial instruments such as foreign currency contracts, cross-currency swaps and interest rate swaps to manage the
financial risks associated with the underlying business activities of the Group.
Financial instruments that are carried at fair value, use different valuation methods. The different levels have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
Level 3: Inputs for the asset or liability that are not observable market data (un-oberservable inputs).
The fair value of the financial liabilities held at amortised cost and the financial liabilities in fair value hedges are within Level 2 of the fair value
hierarchy and have been calculated by discounting the expected future cash flows at prevailing interest rates and by applying period end
exchange rates.
2022
Loans and
receivables
£m
FV through
profit or loss
£m
Cash flow
hedges
£m
Financial
liabilities at
amortised cost
£m
Carrying
value
£m
Fair
value
£m
Cash and cash equivalents* 99.6 – – – 99.6 99.6
Bank overdrafts* – – – (52.9) (52.9) (52.9)
Derivative financial instruments** – 1.0 13.8 – 14.8 14.8
Bank borrowings** – – – (158.8) (158.8) (151.1)
Private Placement Notes** – – – (67.9) (67.9) (65.3)
* Level 1
** Level 2
2021
Loans and
receivables
£m
FV through
profit or loss
£m
Cash flow
hedges
£m
Financial
liabilities at
amortised cost
£m
Carrying
value
£m
Fair
value
£m
Cash and cash equivalents* 119.1 – – – 119.1 119.1
Bank overdrafts* – – – (45.5) (45.5) (45.5)
Derivative financial instruments** – (0.3) (5.3) – (5.6) (5.6)
Bank borrowings** – – – (150.1) (150.1) (146.6)
Private Placement Notes** – – – (106.6) (106.6) (107.7 )
* Level 1
** Level 2
161Strategic Report | Directors’ Report | Financial Statements
The carrying value of trade and other receivables and trade and other payables are considered a reasonable approximation of fair value and
therefore have not been included in the tables above.
During the year and prior year, there were no transfers between the different levels identified above.
Interest rate risk
The Group’s exposure to market risk for changes in interest rates arises from its floating rate borrowings, cash and cash equivalents and derivatives.
The Group’s policy is to optimise interest cost and reduce volatility in reported earnings. This is managed by reviewing the debt profile of the
Group regularly on a currency by currency basis and by selectively using interest rate swaps to manage the level of floating interest rate exposure.
The Group holds private placement in US dollars which have been swapped to sterling using cross currency interest rate swaps.
Sensitivity analysis for floating rate debt
The full year impact of both an upward and downward movement in each applicable interest rate and interest rate curve by 100 basis points
(assuming all the other variables remain constant) is shown below.
On profit after tax On equity
2022
£m
2021
£m
2022
£m
2021
£m
Effect of a downward movement of 100 basis points 0.7 – (0.6) (2.2)
Effect of an upward movement of 100 basis points (0.7) (0.5) 0.5 1.7
negative = cost, positive = gain
Foreign currency risk
The Group is exposed to currency risk on sales and purchases in certain businesses that are denominated in currencies other than the
functional currency of the entity concerned. The Group utilises foreign currency contracts to economically hedge foreign exchange
exposures arising from these transactions.
The Group’s trading entity exposures to foreign currency risk for amounts not denominated in the functional currency of the relevant entity at
the year end date were as follows (excluding derivative financial instruments):
2022 2021
Denominated in:
Euro
£m
US dollars
£m
Sterling
£m
Euro
£m
US dollars
£m
Sterling
£m
Trade receivables and other receivables 1.8 6.6 2.5 – 6.3 0.4
Trade payables and other payables (7.0) (1.0) (1.8) (6.9) (2.0) (0.3)
Cash and cash equivalents and bank overdrafts (4.9) (1.4) (0.5) 0.5 – 0.3
Gross balance sheet exposure (10.1) 4.2 0.2 (6.4) 4.3 0.4
Sensitivity analysis for primary foreign currency risk
A 10% strengthening of the sterling exchange rate against the euro exchange rates in respect of the translation of amounts not denominated in
the functional currency of relevant entities into the functional currency would impact profit after tax and equity by the amount shown below.
This assumes that all other variables remain constant. A 10% weakening of the sterling exchange rate against the euro exchange rates would
have an equal and opposite effect.
On profit after tax On equity
2022
£m
2021
£m
2022
£m
2021
£m
Impact of 10% strengthening of sterling vs euro (loss)/gain (0.2) (0.3) 5.1 4.7
Currency profile
The currency profile of cash and cash equivalents and bank overdrafts, borrowings and derivative financial instruments at 30 September 2022
was as follows:
Australian dollar
£m
US dollar
£m
Euro
£m
Sterling
£m
Total
£m
Cash and cash equivalents and bank overdrafts 0.1 (1.4) 5.8 42.2 46.7
Current borrowings – (12.5) – (4.4) (16.9)
Non-current borrowings – (37.5) – (172.3) (209.8)
Other derivative financial instruments – – – 14.8 14.8
Total 0.1 (51.4) 5.8 (119.7) (165.2)
162 Greencore Group plc Annual Report and Financial Statements 2022
Notes to the Group Financial Statements continued
year ended 30 September 2022
22. Financial risk management and financial instruments continued
Currency profile continued
The currency profile of cash and cash equivalents and bank overdrafts, borrowings and derivative financial instruments at 24 September 2021
was as follows:
Australian dollar
£m
US dollar
£m
Euro
£m
Sterling
£m
Total
£m
Cash and cash equivalents and bank overdrafts 0.2 – 4.9 68.5 73.6
Current borrowings – (47.6) – – (47.6)
Non-current borrowings – (41.0) – (168.1) (209.1)
Other derivative financial instruments – – – (5.6) (5.6)
Total 0.2 (88.6) 4.9 (105.2) (188.7)
Liquidity risk
The Group’s policy on funding capacity is to ensure that it always has sufficient long-term funding and committed bank facilities in place to
meet foreseeable peak borrowing requirements with an appropriate level of additional headroom. A prudent approach to liquidity risk
management is taken by the Group by spreading the maturities of its debt using long-term financing. The Group’s treasury department
actively monitors the current and future funding requirements of the business on a daily basis. Excess funds are placed on short-term deposit
for up to one month whilst ensuring that sufficient cash is available on demand to meet expected operational requirements.
The following are the carrying amounts and contractual liabilities of financial instruments (including interest payments):
30 September 2022
Carrying
amount
£m
Contractual
amount
£m
Period
1-6 months
£m
Period
6-12 months
£m
Period
1-5 years
£m
Period
> 5 years
£m
Non-derivative financial instruments
Bank overdrafts (52.9) (52.9) (52.9) – – –
Bank borrowings (158.8) (185.3) (4.9) (5.6) (174.8) –
Private Placement Notes (67.9) (70.8) (0.5) (17.6) (52.7) –
Lease liabilities (48.0) (51.1) (8.2) (7.2) (28.2) (7.5)
Trade and other payables (436.1) (436.1) (433.4) – (2.7) –
Derivative financial instruments
Interest rate swaps – cash flow hedges 6.4
Inflow/(outflow) 7.5 1.6 2.0 3.9 –
Cross-currency interest rate swaps – cash flow hedges 7.4
Inflow 55.3 1.2 13.5 40.6 –
(Outflow) (48.2) (0.8) (11.8) (35.6) –
Forward foreign exchange contracts 1.0
Inflow 47.4 27. 1 14.9 5.4 –
(Outflow) (46.8) (26.9) (14.6) (5.3) –
24 September 2021
Carrying
amount
£m
Contractual
amount
£m
Period
1-6 months
£m
Period
6-12 months
£m
Period
1-5 years
£m
Period
> 5 years
£m
Non-derivative financial instruments
Bank overdrafts (45.5) (45.5) (45.5) – – –
Bank borrowings (150.1) (163.1) (2.7) (2.8) (157.6) –
Private Placement Notes (106.6) (115.5) (49.3) (1.3) (64.9) –
Lease liabilities (59.6) (62.4) (8.9) (7.8) (33.8) (11.9)
Trade and other payables (370.9) (370.9) (367.2) – (3.7) –
Derivative financial instruments
Interest rate swaps – cash flow hedges (0.6)
Inflow/(outflow) (0.1) (0.6) – 0.5 –
Cross-currency interest rate swaps – cash flow hedges (4.7)
Inflow 96.1 50.0 1.0 45.1 –
(Outflow) (100.7) (51.9) (0.8) (48.0) –
Forward foreign exchange contracts (0.3)
Inflow 32.2 19.6 12.6 – –
(Outflow) (32.6) (19.9) (12.7) – –
163Strategic Report | Directors’ Report | Financial Statements
Credit risk
Credit risk refers to the risk of financial loss to the Group if a counterparty defaults on its contractual obligations on financial assets held on the
Statement of Financial Position. Risk is monitored both centrally and locally.
The Group derives a significant proportion of its revenue from sales to a limited number of major customers. Sales to individual customers can
be of significant value and the failure of any such customer to honour its debts could materially impact the Group’s results. The Group derives
significant benefit from trading with its large customers and manages the risk by regularly reviewing the credit history and rating of all
significant customers and reviewing outstanding balances for indicators of impairment. There have been no significant changes to the Group’s
credit risk parameters or to the composition of the Group’s trade receivables during the financial year.
The Group also manages credit risk in the UK through the use of a receivables purchase arrangement. Under the terms of this agreement the
Group has transferred substantially all of the credit risk and control of the receivables, which are subject to this agreement, and accordingly,
£54.0m (2021: £45.5m) has been derecognised at year end. The impact on the Group’s Statement of Cash Flows is recognised in working
capital movements within operating activities.
In addition, the Group operates trade receivable factoring arrangements with two of its larger customers. These arrangements allow the
Group to choose to factor the receivable before the sales are contractually due from the customer. These are non-recourse arrangements
and therefore amounts are de-recognised from trade receivables. At 30 September 2022 £39.9m (2021: £33.2m) was drawn under these
factoring facilities. The Group presents the factoring arrangements as part of the movement in working capital in the Group Statement of
Cash Flows.
The aged analysis of trade receivables for the year ended 30 September 2022 and 24 September 2021 is summarised in the table below.
2022
£m
2021
£m
Receivable within 1 months of the balance sheet date 172.2 140.1
Receivable between 1 and 3 months of the balance sheet date 5.5 5.2
Receivable greater than 3 months of the balance sheet date 1.8 0.3
Total trade receivables 179.5 145.6
Trade receivables are in general receivable within 90 days of the invoice date, are unsecured and are not interest bearing. The figures disclosed
above are stated net of allowances for impairment.
The Group applies the simplified approach to providing for expected credit losses (‘ECL’) permitted by IFRS 9 Financial Instruments, which
requires expected lifetime losses to be recognised from initial recognition of the trade receivables. The Group uses an allowance matrix to
measure the ECLs of trade receivables based on its credit loss rates. Expected loss rates are based on historical payment profiles of sales and
the corresponding historical credit loss experience. The historical loss rates are adjusted to reflect current and forward economic factors if
there is evidence to suggest these factors will affect the ability of the customer to settle receivables. The Group has determined the ECL
default rate using market default risk probabilities with regard to its key customers.
The movements in the provision for impairment of trade receivables are as follows:
2022
£m
2021
£m
At the beginning of the year (2.3) (2.1)
Provided during year (1.2) (0.6)
Written off during the year 0.1 0.4
At end of year (3.4) (2.3)
The Group has calculated ECL on other receivables balances using market default risk probabilities for key customers and has assessed that a
provision would be immaterial and therefore has not been provided for at 30 September 2022 (2021: £Nil).
Cash and cash equivalents and bank overdrafts
Exposure to credit risk on cash and derivative financial instruments is actively monitored by the Group’s treasury department. Risk of
counterparty default arising on cash and cash equivalents and bank overdrafts is controlled by dealing with high quality institutions and by
policy, limiting the amount of credit exposure to any one bank or institution. The Group transacts with a variety of high credit quality financial
institutions for the purpose of placing deposit. The Group actively monitors its credit exposure to each counterparty to ensure compliance
with the counterparty risk limits of the Board approved treasury policy.
Of the total cash and cash equivalents and bank overdrafts at 30 September 2022 and 24 September 2021, the cash was predominantly held
by financial institutions with minimum short term ratings of A-2 (Standard and Poor’s) or P-2 (Moody’s). The Group accordingly does not
expect any loss in relation to its cash and cash equivalents and bank overdrafts at 30 September 2022 (2021: £Nil).
164 Greencore Group plc Annual Report and Financial Statements 2022
Notes to the Group Financial Statements continued
year ended 30 September 2022
22. Financial risk management and financial instruments continued
Price risk
The Group purchases a variety of commodities which can be subject to significant price volatility. The price risk on these commodities is
managed by the Group’s purchasing function by closely monitoring markets. The Group’s policy is to minimise its exposure to volatility by
adopting an appropriate forward purchase strategy by providing forward price forecasts to the business. This forecast enables the Group to
manage inflation.
Reconciliation of movements of liabilities to cash flows arising from financing activities
The reconciliation from opening to closing for the year ended 30 September 2022 is as follows:
At
24 September
2021
£m
Financing
cash flows
£m
Foreign
currency
translation
£m
Other and
non-cash
movements
£m
Other
operating cash
movements
£m
At
30 September
2022
£m
Bank borrowings (150.1) (9.6) – 0.9 – (158.8)
Private Placement Notes (106.6) 47. 3 (8.9) 0.3 – (67.9)
Lease liabilities (59.6) 17.3 – (6.9) 1.2 (48.0)
Total changes in liabilities arising from financing activities (316.3) 55.0 (8.9) (5.7) 1.2 (274.7)
Issue of Share Capital decreased by £0.1m in the year due to the share buyback during the year. £8.8m of the cash outflow has been
recognised within retained earnings. In the year £3.0m of own shares were purchased and put into trust. These have been recognised within
the own share reserve.
The reconciliation of opening to closing for the prior year ended 24 September 2021 is as follows:
At
25 September
2020
£m
Financing
cash flows
£m
Foreign
currency
translation
£m
Other and
non-cash
movements
£m
Other
operating cash
movements
£m
At
24 September
2021
£m
Bank borrowings (283.5) 130.9 – 2.5 – (150.1)
Private Placement Notes (114.0) – 6.4 1.0 – (106.6)
Lease liabilities (60.7) 14.3 – (14.5) 1.3 (59.6)
Total changes in liabilities arising from financing activities (458.2) 145.2 6.4 (11.0) 1.3 (316.3)
Issue of Share Capital * (4.9) (90.1) – – – (95.0)
Total changes in equity arising from financing activities (4.9) (90.1) – – – (95.0)
* £3m of fees have been recognised within retained earnings
Capital management
The Group manages its capital to ensure that entities in the Group will be able to trade on a going concern basis while maximising the return
to stakeholders through the optimisation of the debt and equity balance. The change in debt capital structure in the year is set out in the
Alternative Performance Measures and the change in equity is set out in Note 25. Invested capital is defined as the sum of all current and
non-current assets (including intangibles), less current and non-current liabilities with the exception of debt items, derivatives and retirement
benefit obligations (net of tax). The invested capital of the Group at 30 September 2022 is £689.2m (2021: £700.8m). The Group monitors the
return on invested capital of the Group as a key performance indicator; the calculation is set out in the Alternative Performance Measures on
page 183.
23. Provisions
Leases
£m
Remediation
and closure
£m
Reorganisation
£m
Other
£m
Total
£m
Year ended 30 September 2022
At 24 September 2021 4.6 1.8 – 1.2 7.6
Provided in year 0.2 – 7.6 0.3 8.1
Utilised in year (0.1) (0.4) (5.1) – (5.6)
Released in year – – – (0.3) (0.3)
Unwind of discount to present value in the year 0.1 – – – 0.1
At 30 September 2022 4.8 1.4 2.5 1.2 9.9
Analysed as:
2022
£m
2021
£m
Non-current liabilities 5.2 5.5
Current liabilities 4.7 2.1
9.9 7.6
165Strategic Report | Directors’ Report | Financial Statements
Leases
Lease provisions consist of provisions for leasehold dilapidations in respect of certain leases, relating to the estimated cost of reinstating
leasehold premises to their original condition at the time of the inception of the lease as provided for in the lease agreement. It is anticipated
that these will be payable within ten years.
Remediation and closure
Remediation and closure obligations were established to cover either a statutory, contractual or constructive obligation of the Group.
The majority of the obligation will unwind in one to three years.
Reorganisation
Reorganisation provisions consist of provisions for personnel exit costs arising from the Group’s Better Greencore programme. The provision
is expected to unwind within one year.
Other
Other provisions consist of potential litigation and warranty claims. It is anticipated that these provision will unwind in one to five years.
24. Retirement benefit obligations
The Group operates defined contribution pension schemes in all of its main operating locations. The Group also has legacy defined benefit
pension schemes, which were closed to future accrual on 31 December 2009.
Defined contribution pension schemes
The total cost charged to income of £14.1m (2021: £12.8m) represents employer contributions payable to the defined contribution pension
schemes at rates specified in the rules of the schemes. At year end, £2.2m (2021: £1.7m) was included in other accruals in respect of defined
contribution pension accruals.
Legacy defined benefit pension schemes
The Group operates one legacy defined benefit pension scheme and one legacy defined benefit commitment in Ireland (the ‘Irish schemes’)
and one legacy defined benefit pension scheme and one legacy defined benefit commitment in the UK (the ‘UK schemes’). The Projected Unit
Credit actuarial cost method has been employed in determining the present value of the defined benefit pension obligation, the related
current service cost and, where applicable, past service cost.
All of the legacy defined benefit pension schemes are closed to future accrual and there is an assumption applied in the valuation of the
schemes that there will be no discretionary increases in pension payments. Scheme assets are held in separate trustee administered funds.
These plans have broadly similar regulatory frameworks. Responsibility for governance of the plans, including investment decisions and
contribution schedules, lies with the Company and the respective boards of Trustees.
The Group’s cash contributions to its pension schemes are generally determined by reference to actuarial valuations undertaken by the
schemes’ actuaries at intervals not exceeding three years and not by the provisions of IAS 19 Employee Benefits. These funding valuations can
differ materially from the requirements of IAS 19. In particular the discount rate used to determine the value of liabilities under IAS 19 Employee
Benefits is determined by reference to the yield at the year end date on high grade corporate bonds of comparable duration to the liabilities.
In contrast the discount rate used in the ongoing valuation is generally determined by reference to the yield on the scheme’s current and
projected future investment portfolio.
Where a funding valuation reveals a deficit in a scheme, the Group will generally agree a schedule of contributions with the Trustees designed
to address the deficit over an agreed future time horizon. Full actuarial valuations were carried out between 31 March 2019 and 31 March
2020. In general, acturial valuations are not available for public inspection, however, the results of valuations are advised to members of the
various schemes. All of the schemes are operating under the terms of current funding proposals agreed with the relevant pension authorities.
Based on current discussions with the Trustees of the scheme cash contributions are expected to be modestly below £15m in FY23.
166 Greencore Group plc Annual Report and Financial Statements 2022
Notes to the Group Financial Statements continued
year ended 30 September 2022
24. Retirement benefit obligations continued
Legacy defined benefit assets and liabilities
2022 2021
UK schemes
£m
Irish schemes
£m
Total
£m
UK schemes
£m
Irish schemes
£m
Total
£m
Fair value of plan assets 168.7 170.3 339.0 260.6 220.7 481.3
Present value of scheme liabilities (228.0) (131.3) (359.3) (347.7) (179.6) (527.3)
(Deficit)/surplus in schemes (59.3) 39.0 (20.3) (87.1) 41.1 (46.0)
Deferred tax asset (Note 9) 14.8 (4.9) 9.9 21.8 (5.1) 16.7
Net (liability)/asset at end of year (44.5) 34.1 (10.4) (65.3) 36.0 (29.3)
Presented as:
Retirement benefit asset* 39.8 42.1
Retirement benefit obligation (60.1) (88.1)
* The value of a net pension benefit asset is the value of any amount the Group reasonably expects to recover by way of refund of surplus from the remaining assets of a
plan at the end of the plan’s life.
The International Financial Reporting Standards Interpretations Committee (‘IFRIC 14’) clarifies how the asset ceiling should be applied,
particularly how it interacts with local minimum funding rules. The Group has determined that it has an unconditional right to a refund of
surplus assets if the schemes are run off until the last member dies.
Movement in the fair value of plan assets
2022
£m
2021
£m
Change in plan assets
Fair value of plan assets at beginning of year 481.3 502.8
Interest income on plan assets 7.3 6.3
Actuarial (loss)/gain (141.9) 31.1
Administrative expenses paid from plan assets (1.3) (1.0)
Employer contributions 12.6 8.0
Benefit payments (22.3) (26.7)
Settlement payments from plan assets – (23.4)
Effect of exchange rate changes 3.3 (15.8)
Fair value of plan assets at end of year 339.0 481.3
Movement in the present value of scheme liabilities
2022
£m
2021
£m
Change in present value of scheme liabilities
Present value of scheme liabilities at beginning of year 527.3 584.9
Interest expense 8.4 8.0
Past service cost – 0.2
Actuarial (gain)/loss on financial assumptions (177.8) 11.1
Actuarial loss/(gain) on experience 21.5 (0.7)
Actuarial loss/(gain) on demographic assumptions – (15.6)
Loss on settlements – 2.8
Plan settlements from plan assets – (23.4)
Administration costs included in Defined Benefit Obligation for schemes in wind up (0.2) –
Benefit payments (22.3) (26.7)
Effect of exchange rate changes 2.4 (13.3)
Present value of scheme liabilities at end of year 359.3 527.3
Risks and assumptions
The legacy defined employee benefit plans expose the Group to a number of risks, the most significant of which are:
Asset volatility: The plan liabilities are calculated using a discount rate set with reference to corporate bond yields. If assets underperform this
yield this will create a deficit. The plans hold equities which, though expected to outperform corporate bonds in the long term, create volatility
and risk in the short term. The allocation to equities is monitored to ensure that it remains appropriate given the plans’ long term objectives.
167Strategic Report | Directors’ Report | Financial Statements
Discount rates: The discount rates employed in determining the present value of the schemes’ liabilities are determined by reference to
market yields at the year end date on high-quality corporate bonds of a currency and term consistent with the currency and term of the
associated post-employment benefit obligations. Changes in discount rates impact the quantum of the liabilities.
Inflation risk: Some of the Group’s pension obligations are linked to inflation; higher inflation will lead to higher liabilities (although in most
cases, caps on the level of inflationary increases are in place to protect the plan against extreme inflation). The rate of inflation is derived
from the relative yields of index-linked and fixed interest government bonds priced as of 30 September 2022 in the UK. The Irish inflation
assumption has been set based on market expectations at the reporting date which included consideration of the yield on long term Irish
Government bonds.
Longevity risk: In the majority of cases, the Group’s legacy defined benefit pension schemes provide benefits for the life of the member,
so increases in life expectancy will therefore give rise to higher liabilities.
Climate change: The impact of climate change on mortality rates, particularly future mortality rates, has been considered and it has been
concluded that there is no impact in the current year. This will continue to be kept under review.
The size of the obligation is sensitive to judgemental actuarial assumptions. These include demographic assumptions covering mortality,
economic assumptions covering price inflation and benefit increases, together with the discount rate.
The principal actuarial assumptions are as follows:
UK schemes Irish schemes
2022 2021 2022 2021
Rate of increase in pension payments* 3.35% 3.35% 0.00% 0.00%
Discount rate 5.00% 1.90% 4.00% 1.13%
Inflation rate** 3.55% 3.45% 2.40% 1.80%
* The rate of increase in pension payments applies to the majority of the liability base, however there are certain categories within the Group’s Irish schemes that have an
entitlement to pension indexation.
** The assumption for RPI and CPI are derived from the relative yields of index-linked and fixed interest government bonds.
Assumptions regarding future mortality experience are set based on information from published statistics and experience in all geographic
regions and are selected to reflect the characteristics and experience of the membership of the relevant plans. In relation to the UK, this has
been done by reflecting the characteristics of the membership using the demographic tables from S3PMA with CMI 2019 model for future
improvements in mortality. The average life expectancy, in years, of a pensioner retiring at 65 is as follows:
UK schemes Irish schemes
2022
years
2021
years
2022
years
2021
years
Male 22 22 23 22
Female 24 24 24 24
Sensitivity of pension liability to actuarial assumptions
Impact on scheme liabilities
Assumption Change in assumption
UK
schemes
£m
Irish
schemes
£m
Total
2022
£m
Total
2021
£m
Discount rate Decrease by 0.5% 16.3 6.2 22.5 46.2
Discount rate Increase by 0.5% (14.6) (5.7) (20.3) (41.0)
Rate of inflation Decrease by 0.5% (14.7) (1.8) (16.5) (28.2)
Rate of inflation Increase by 0.5% 13.8 2.0 15.8 28.5
Rate of mortality Members assumed to live 1 year longer 5.8 5.1 10.9 18.8
Sensitivity of pension scheme assets to yield movements
Impact on scheme assets
Assumption Change in assumption
UK
schemes
£m
Irish
schemes
£m
Total
2022
£m
Total
2021
£m
Change in bond yields Decrease by 0.5% 15.0 6.5 21.5 39.9
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. The sensitivity analysis
intends to provide assistance in understanding the sensitivity of the valuation of pension liabilities to market movements on discount rates,
inflation rates and mortality assumptions for scheme beneficiaries.
168 Greencore Group plc Annual Report and Financial Statements 2022
Notes to the Group Financial Statements continued
year ended 30 September 2022
24. Retirement benefit obligations continued
Hedging strategy
The Trustees invest the funds in a range of assets with the objective of maximising the fund return with a view to containing the cost of
funding the scheme whilst at the same time maintaining an acceptable risk profile. In assessing the risk profile the Trustees take account
of the nature and duration of the liabilities.
Plan assets are comprised as follows:
2022 2021
Quoted
£m
Unquoted
£m
Total
£m
Quoted
£m
Unquoted
£m
Total
£m
Cash 78.5 – 78.5 28.8 – 28.8
Debt instruments 101.1 – 101.1 129.2 – 129.2
Real estate – – – 22.2 – 22.2
Derivatives 125.0 – 125.0 214.6 – 214.6
Investment funds* 16.0 18.4 34.4 86.5 – 86.5
Fair value of plan assets 320.6 18.4 339.0 481.3 – 481.3
* A quoted market price in an active market is not available.
The primary Irish and UK Schemes have Liability Driven Investment (‘LDI’) for 67% (2021: 73%) of the Irish funds and 50% (2021: 60%) of the
UK funds which aims to hedge 100% (relative to assets) of the interest rate and inflation risk in the schemes. The hedging strategy is designed
to reduce the schemes’ exposure to changes in interest rates and inflation expectations, therefore, reducing funding level risk and volatility.
The Trustees review investment strategy regularly. In the final quarter of the financial year, due to economic volatility in the UK, particularly
in bond markets, this led to a larger than normal spread between movements in the scheme assets and liabilities in a number of pension
schemes. For the Group UK schemes, due to the current hedging strategy in place, there was no deterioration in the funding position of the
schemes as a result of these changes, and the Group did not have to provide any additional funding or collateral to maintain the hedged
position of the scheme.
The hedging on the Irish Schemes is provided via a mix of interest rate and inflation swaps and a buy and hold credit portfolio. The interest rate
and inflation swaps held are an exchange of cash flows where the initial market value of the bond portfolio on one side of the swap equals the
present value of the pre-defined payments on the other side of the swap. A limited amount of leverage is used to enable a greater reduction
in liability risk. The hedging on the UK Schemes is provided via pooled fund manager funds which have specified limits on leverage.
Maturity analysis
The expected maturity analysis is set out in the table below:
UK schemes
% of benefits
Irish schemes
% of benefits
Total
% of benefits
Expected benefit payments:
Within 5 years 10% 26% 16%
Between 6 and 10 years 12% 22% 16%
Between 11 and 15 years 14% 17% 15%
Between 16 and 20 years 14% 13% 13%
Between 21 and 25 years 13% 8% 11%
Over 25 years 37% 14% 29%
The weighted average duration of the UK and Irish legacy defined benefit obligations are 18 years (2021: 19 years) and 11 years (2021: 12 years)
respectively.
Greencore Group Pension Scheme contingent asset
The primary scheme in Ireland, Greencore Group Pension Scheme (‘the Scheme’) has a mortgage and charge relating to certain property
assets of the Group with a carrying value of £3.1m (2021: £3.0m) for use as a contingent asset of the Scheme. Under the terms of the
mortgage and charge, should a disposal of these property assets occur that meets certain requirements, the Scheme is entitled to a portion of
the sale proceeds. The maximum amount recoverable by the Trustees of the Scheme under the mortgage and charge is the amount required
for the Scheme to meet the minimum funding standard under the Pension Acts 1990-2009.
Pension funding partnership
In 2013, the Group entered into arrangements with the Greencore UK Legacy Defined Benefit Scheme (‘the UK Scheme’) to address £40.0m
of the actuarial deficit in the UK Scheme. The substance of this arrangement is to reduce the cash funding which would otherwise be required
based on the latest actuarial valuation, whilst improving the security of the UK Scheme members’ benefits.
169Strategic Report | Directors’ Report | Financial Statements
On 10 May 2013, the Group made a contribution to the UK Scheme of £32.8m. On the same day, the UK Scheme’s Trustees invested £32.8m
in Greencore Convenience Foods Limited Partnership (‘SLP’) as a limited partner. SLP was established by Greencore Prepared Meals Limited,
a wholly owned subsidiary of the Group, to hold properties of the Group and loan notes issued by Greencore Convenience Foods I Limited
Liability Partnership (‘LLP’). LLP was established by SLP and holds certain trade receivables of the Group. As at 30 September 2022, SLP held
properties with a carrying value of £15.2m (2021: £15.6m) and trade receivables with a carrying value of £36.0m (2021: £36.0m) in the Group
Financial Statements. The properties are leased to other Group undertakings. As a partner in SLP, the UK Scheme is entitled to a semi-annual
share of the profits of SLP until 2029.
These partnerships are controlled by the Group, and as such, they are fully consolidated as wholly owned subsidiaries in accordance with IFRS
10 Consolidated Financial Statements. Under IAS 19 Employee Benefits, the investment held by the Scheme in SLP, does not represent a plan
asset for the purposes of the Group’s consolidated accounts. Accordingly, the Scheme’s deficit position presented in the Group Financial
Statements does not reflect the investment in SLP held by the UK Scheme. Distributions from SLP to the UK Scheme are treated as
contributions by employers in the Group Financial Statements on a cash basis.
25. Share capital
Authorised
2022
£m
2021
£m
1,000,000,000 Ordinary Shares of £0.01 each 10.0 10.0
500,000,000 Deferred Shares of €0.01 each 4.3 4.3
300,000,000 Deferred Shares of €0.62 each 160.1 160.1
1 Special Rights Preference Share of €1.26
(A)
– –
174.4 174.4
Issued and fully paid
2022
£m
2021
£m
516,836,560 (2021: 526,546,662) Ordinary Shares of £0.01 each 5.2 5.3
1 Special Rights Preference Share of €1.26
(A)
– –
5.2 5.3
Reconciliation of movements on Equity Share Capital
2022
£’000
2021
£’000
Share capital, at beginning of year 5,255 4,451
Exercise of share options
(B)
– –
Share buyback and cancellation of shares
(C)
(97) –
Shares issued in equity raise
(D)
– 804
5,158 5,255
(A) There is one Special Share of €1.26 in the capital of the Company. The Articles of Association provide that the Special Share may be held only by, or transferred only to,
the Minister for Agriculture, Food and the Marine or some other person appointed by the Minister. In 2011, many of the rights attaching to the Special Share were
abolished.
(B) 18,575 share options (2021: 32,264) granted under the ShareSave scheme were exercised in the year at a nominal value of £0.0002m (2021:£0.0003m). See Note 6.
(C) 9,728,677 Ordinary shares in the Company were repurchased in the current year and immediately cancelled (2021: Nil). The shares of nominal value £0.097m (2021: £Nil)
were purchased for £8.8m.
(D) In the prior year, the Group raised £90.0m by way of an equity placing. The Group issued 80,357,142 Ordinary Shares in the Company on the London Stock Exchange,
at a placing price of 112 pence per Ordinary Share.
All shares, with the exception of the Special Rights Preference Share, carry equal voting rights and rank for dividends to the extent to which the
total amount payable in each share is paid up.
Prior consent of the holder of the Special Share is required in the event that there is a proposal for the voluntary winding up or dissolution
of the Company or if there is any proposed sale, transfer or disposal of the Company’s subsidiary, Irish Sugar Designated Activity Company.
The holder of the Special Share is only entitled to a repayment of the capital paid up on the Special Share (€1.26) and has no further right to
participate in the profits of the Company or any entitlement to dividend.
Own share reserve:
Number of shares Nominal value of share Total own share reserve
2022
number
2021
number
2022
£m
2021
£m
2022
£m
2021
£m
At beginning of year 986,837 1,675,688 0.010 0.017 1.8 2.9
Shares acquired by Employee Benefit Trust 2,180,216 – 0.022 – 3.0 –
Transferred to beneficiaries of the share scheme (290,044) (688,851) (0.003) (0.007) (0.4) (1.1)
At end of year 2,877,009 986,837 0.029 0.010 4.4 1.8
At 30 September 2022, 0.6% of share capital is held in this reserve (24 September 2021: 0.2%)
170 Greencore Group plc Annual Report and Financial Statements 2022
Notes to the Group Financial Statements continued
year ended 30 September 2022
26. Working capital movement
The following represents the Group’s working capital movement:
2022
£m
2021
£m
Increase in inventories (15.6) (5.3)
Increase in trade and other receivables (52.6) (39.9)
Increase in trade and other payables 70.2 78.4
2.0 33.2
27. Capital expenditure commitments
The table below includes the capital commitments for the Group as at year ended 30 September 2022:
2022
£m
2021
£m
Capital expenditure that has been contracted but not been provided for 8.7 6.6
Capital expenditure that has been authorised by the Directors but not yet contracted 10.5 30.4
19.2 37.0
28. Disposal of undertakings and non-controlling interests
Molasses trading businesses
In the prior year, the Group completed the sale of its interest in its molasses trading businesses to United Molasses Marketing (Ireland) Limited
and United Molasses Marketing Limited.
Effect of disposal on the financial statements
2022
£m
2021
£m
Total assets and liabilities disposed of – (13.1)
Disposal consideration
Purchase consideration – 15.5
Working capital settlement – 2.7
Total net consideration – 18.2
Disposal related costs – (0.6)
Translation reserve transferred to Income Statement on disposal of subsidiary – 1.0
Non-controlling interest transferred to Income Statement on disposal of subsidiary – 5.8
Profit on disposal – 11.3
Reconciliation of consideration to cash received
2022
£m
2021
£m
Purchase consideration – 15.5
Cash received in respect of working capital settlement – 2.7
Transaction costs paid – (0.4)
Net consideration received on completion – 17.8
Cash and cash equivalents disposed of – (1.5)
Net cash inflow arising on disposal – 16.3
Non controlling interests reconciliation
2022
£m
2021
£m
At beginning of year – 5.7
Profit after tax – 0.3
Dividends paid to non-controlling interests – –
Currency translation adjustment – (0.2)
Non-controlling interest transferred to Income Statement on disposal of subsidiary – (5.8)
At end of year – –
171Strategic Report | Directors’ Report | Financial Statements
29. Contingencies
The Company and certain subsidiaries have given guarantees in respect of borrowings and other obligations arising in the ordinary course
of business of the Company and other Group undertakings. The Company and other Group undertakings consider these guarantees to be
insurance contracts and account for them as such. The Company treats these guarantee contracts as contingent liabilities until such time as
it becomes probable that a payment will be required under such guarantees.
Pursuant to the provisions of Section 357, Companies Act 2014, the Company has guaranteed the liabilities of certain subsidiary undertakings
in Ireland for the financial year ended 30 September 2022 and as a result, such subsidiary undertakings have been exempted from the filing
provisions of Companies Act 2014. See Note 31 for the list of these subsidiary entities.
The Group has provided bank guarantees to third party insurers for an amount of £4.6m (2021: £5.8m).
30. Related party disclosures
The principal related party relationships requiring disclosure in the Group Financial Statements under IAS 24 Related Party Disclosures pertain
to the existence of subsidiaries and transactions with these entities entered into by the Group, as well as the identification and compensation
of key management personnel, as addressed in greater detail below.
Subsidiaries
The Group Financial Statements include the Financial Statements of the Company (Greencore Group plc, the ultimate parent) and its
subsidiaries. A listing of the principal subsidiaries is provided in Note 31 of the Group Financial Statements.
Sales to and purchases from, together with outstanding payables and receivables to and from, subsidiaries, are eliminated in the preparation
of the Group Financial Statements in accordance with IFRS 10 Consolidated Financial Statements.
Key management personnel
For the purposes of the disclosure requirements of IAS 24 Related Party Disclosures, the term ‘Key Management Personnel’ (i.e. those persons
having the authority and responsibility for planning, directing and controlling the activities of the Company), comprise the Board of Directors
which manages the business and affairs of the Group.
Key management personnel compensation was as follows:
2022
£m
2021
£m
Salaries and other short-term employee benefits 1.9 2.1
Post-employment benefits – defined contribution costs 0.1 0.2
Share-based payments* – 0.4
2.0 2.7
* This is the Income Statement charge for the year which represents the fair value of the share-based payments, relating to Executive Directors. Details of the Group’s
share-based payments and the basis of calculation are set out in Note 6. This differs from the amount included in the single total figure for remuneration included in the
Directors’ Report which is not an IFRS metric.
31. Principal subsidiary undertakings
Name of undertaking Nature of business Percentage share Registered office
Greencore Advances Designated Activity Company
(A)(C)
Finance company 100 No. 2 Northwood Avenue
Northwood Business Park, Santry
Dublin 9, D09 X5N9
Greencore Beechwood Limited
(A)(D)
Holding company 100 Greencore Manton Wood
Retford Road
Manton Wood Enterprise Park
Worksop S80 2RS
Greencore Convenience Foods Limited Partnership
(B)(D)
Pension funding 100 c/o Eversheds LLP
3-5 Melville Street
Edinburgh EH3 7PE
Greencore Convenience Foods I Limited Liability
Partnership
(B)(D)
Pension funding 100 Greencore Manton Wood
Retford Road
Manton Wood Enterprise Park
Worksop S80 2RS
Greencore Developments Designated Activity
Company
(A)(C)
Property company 100 No. 2 Northwood Avenue
Northwood Business Park, Santry
Dublin 9, D09 X5N9
172 Greencore Group plc Annual Report and Financial Statements 2022
Notes to the Group Financial Statements continued
year ended 30 September 2022
Name of undertaking Nature of business Percentage share Registered office
Greencore Finance Designated Activity Company
(A)(C)
Finance company 100 No. 2 Northwood Avenue
Northwood Business Park, Santry
Dublin 9, D09 X5N9
Greencore Foods Limited
(A)(D)
Holding and management
services company
100 Greencore Manton Wood
Retford Road
Manton Wood Enterprise Park
Worksop S80 2RS
Greencore Food to Go Limited
(A)(D)
Food manufacturer 100 Greencore Manton Wood
Retford Road
Manton Wood Enterprise Park
Worksop S80 2RS
Greencore Funding Limited
(A)(E)
Finance company 100 13 Castle Street
St. Helier
Jersey JE4 5UT
Greencore Grocery Limited
(A)(D)
Food manufacturer 100 Greencore Manton Wood
Retford Road
Manton Wood Enterprise Park
Worksop S80 2RS
Greencore Prepared Meals Limited
(A)(D)
Food manufacturer 100 Greencore Manton Wood
Retford Road
Manton Wood Enterprise Park
Worksop S80 2RS
Greencore UK Holdings Limited
(A)(D)
Holding company 100 Greencore Manton Wood
Retford Road
Manton Wood Enterprise Park
Worksop S80 2RS
Hazlewood Foods Limited
(A)(D)
Holding company 100 Greencore Manton Wood
Retford Road
Manton Wood Enterprise Park
Worksop S80 2RS
Irish Sugar Designated Activity Company
(A)(C)
General trading company 100 No. 2 Northwood Avenue
Northwood Business Park, Santry
Dublin 9, D09 X5N9
Trilby Trading Limited
(A)(C)
Food industry supplier 100 No. 2 Northwood Avenue
Northwood Business Park, Santry
Dublin 9, D09 X5N9
(A) These companies are all ultimately held 100% by Greencore Group PLC. Each of the shares held are Ordinary shares.
(B) These companies are partnerships and the interests held represents interests in member capital
(C) These companies are registered in Ireland and are availing of the exemption as set out in s.357 of the Companies Act 2014
(D) These companies are registered in the UK
(E) This company is registered in Jersey
32. Subsequent events
Pension plan asset
In November 2022, the Trustees of the Irish legacy defined benefit pension scheme entered into an annuity buy-in transaction to purchase an
insurance policy for the pensioner liabilities, representing approximately 80% of the liabilities in the scheme. The insurance policy will be
treated as a plan asset and the fair value of the policy is deemed to be the present value of the related obligations.
Recommencement of share buyback
The Group will recommence a return of value to investors by way of the share buyback programme which is expected to return a futher £15m
to shareholders in FY23.
33. Board approval
The Group Financial Statements, together with the Company Financial Statements, for the year ended 30 September 2022 were approved by
the Board of Directors and authorised for issue on 28 November 2022.
31. Principal subsidiary undertakings continued
173Strategic Report | Directors’ Report | Financial Statements
Company Statement of Financial Position
at 30 September 2022
Notes
2022
£m
2021
£m
ASSETS
Non-current assets
Intangible assets 0.4 0.7
Property, plant and equipment 0.3 0.4
Right-of-use assets 0.4 0.6
Financial assets 2 766.6 766.6
Total non-current assets 767.7 768.3
Current assets
Trade and other receivables 3 3.6 7.0
Cash and cash equivalents 0.1 –
Total current assets 3.7 7.0
Total assets 771.4 775.3
EQUITY
Capital and reserves
Share capital 6 5.2 5.3
Share premium 89.7 89.7
Undenominated capital reserve 120.5 120.4
Other reserves (0.6) 1.8
Retained Earnings 149.3 160.5
Total equity 364.1 377.7
LIABILITIES
Non-current liabilities
Lease liabilities 0.2 0.5
Provisions 5 0.6 1.1
Total non-current liabilities 0.8 1.6
Current liabilities
Bank overdraft 5.8 –
Lease liabilities 0.3 0.3
Trade and Other payables 4 399.8 395.6
Provisions 5 0.6 0.1
Total current liabilities 406.5 396.0
Total liabilities 407.3 397.6
Total equity and liabilities 771.4 775.3
The Company only loss for the year was £4.8m (2021: loss of £25.3m)
On behalf of the Board
Gary Kennedy Emma Hynes
Director Director
174 Greencore Group plc Annual Report and Financial Statements 2022
Share
capital
£m
Share
premium
£m
Undenominated
capital reserve
(D)
£m
Share-
based
payment
reserve
(E)
£m
Own share
reserve
(F)
£m
Retained
earnings
£m
Total equity
£m
At 24 September 2021 5.3 89.7 120.4 3.6 (1.8) 160.5 377.7
Items of income and expense taken directly to equity
Loss for the financial year – – – – – (4.8) (4.8)
Total comprehensive income for the year – – – – – (4.8) (4.8)
Transactions with equity holders of the Company
Employee share-based payment expense – – – 3.0 – – 3.0
Exercise, forfeit or lapse of share based payments – – – (2.8) – 2.8 –
Shares acquired by Employee Benefit Trust
(A)
– – – – (3.0) – (3.0)
Transfer to retained earnings on grant of shares to
beneficiaries of the Employee Benefit Trust
(B)
– – – – 0.4 (0.4) –
Capital return via share buyback
(C)
(0.1) – 0.1 – – (8.8) (8.8)
At 30 September 2022 5.2 89.7 120.5 3.8 (4.4) 149.3 364.1
Share
capital
£m
Share
premium
£m
Undenominated
capital reserve
(D)
£m
Share-
based
payment
reserve
(E)
£m
Own share
reserve
(F)
£m
Retained
earnings
£m
Total equity
£m
At 25 September 2020 4.5 0.4 120.4 3.9 (2.9) 187.5 313.8
Items of income and expense taken directly to equity
Loss for the financial year – – – – – (25.3) (25.3)
Total comprehensive income for the year – – – – – (25.3) (25.3)
Transactions with equity holders of the Company
Employee share-based payment expense – – – 2.1 – – 2.1
Exercise, forfeit or lapse of share based payments – 0.1 – (2.4) – 2.4 0.1
Transfer to retained earnings on grant of shares to
beneficiaries of the Employee Benefit Trust
(B)
– – – – 1.1 (1.1) –
Shares issued in the year 0.8 89.2 – – – – 90.0
Transaction costs of share issue – – – – – (3.0) (3.0)
At 24 September 2021 5.3 89.7 120.4 3.6 (1.8) 160.5 377.7
(A) Pursuant to the terms of the Employee Benefit Trust 2,180,216 shares (2021: Nil) were purchased during the financial year ended 30 September 2022 for a cash cost of
£3.0m (2021: £Nil).
(B) During the year, 290,044 (2021: 688,851) shares with a nominal value at the date of transfer of £0.0029m (2021: £0.0069m) at a cost of £0.4m (2021: £1.1m) were
transferred to beneficiaries of the Annual Bonus Plan.
(C) During the year, the Company purchased and subsequently cancelled 9,728,677 Ordinary Shares for a total cash cost of £8.8m as part of the share buyback programme.
(D) The undenominated capital reserve represents the nominal cost of cancelled shares and the amount transferred to reserves as a result of renominalising the share capital
of the Company on conversion to the euro.
(E) The share-based payment reserve relates to equity settled share-based payment made to employees through the Performance Share Plan, the Annual Bonus Plan, the
ShareSave Scheme and Employee Incentive Scheme. Further information in relation to these share-based payment schemes is set out in Note 6 of the Group Financial
Statements.
(F) The amount included as own shares relates to Ordinary Shares in the Company which are held in trust. The shares held in trust are granted to beneficiaries of the Group’s
employee share-based payment schemes when the relevant conditions of the scheme are satisfied.
Company Statement of Changes in Equity
year ended 30 September 2022
175Strategic Report | Directors’ Report | Financial Statements
Notes to the Company Financial Statements
year ended 30 September 2022
1. Company only Statement of accounting policies
Basis of preparation
The Company only Financial Statements of Greencore Group plc (‘the Company’) were prepared under the historical cost convention, in
accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (‘FRS 101’). In preparing these Financial Statements, the
Company applies the recognition, measurement and disclosure requirements of International Financial Reporting Standards as adopted by the
EU (‘Adopted IFRSs’) but makes amendments where necessary in order to comply with the Companies Acts 2014 and has set out below where
advantage of the FRS 101 disclosure exemptions has been taken.
In these financial statements, the company has applied the exemptions available under FRS 101 in respect of the following disclosures:
• A Cash Flow Statement and related notes;
• Disclosures in respect of transactions with wholly owned subsidiaries;
• Disclosures in respect of capital management;
• The effects of new but not yet effective IFRSs; and
• Disclosures in respect of the compensation of Key Management Personnel.
As the Consolidated Financial Statements of the Group are prepared in accordance with IFRS as adopted by the EU and include the equivalent
disclosures, the Company has also taken the exemptions under FRS 101 available in respect of the following disclosures:
• Certain disclosures required by IFRS 2 Share Based Payments;
• Certain disclosures required by IFRS 13 Fair Value Measurement and the disclosures required by IFRS 7 Financial Instruments: disclosures;
• Certain disclosures required by IFRS 16 Leases.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these financial
statements. The Company applies consistent accounting policies for measurement and recognition purposes under FRS 101 to those applied
by the Group. To the extent that an accounting policy is relevant to both Group and the Company financial statements, please refer to the
Group financial statements for disclosure of the relevant accounting policy.
The financial statements have been prepared in sterling and are rounded to the nearest million.
Going Concern
Notwithstanding the fact that the Company is in a net current liability position of £402.8m (FY21: £389.0m), the Directors, after making
enquiries and considering the scenario analysis that was performed as part of the Group’s going concern assessment, have a reasonable
expectation that the Company has adequate resources to continue operating as a going concern for the foreseeable future, being a period
of 18 months from the year end date. Accordingly, the financial statements of the Company are prepared on a going concern basis.
Significant accounting judgements
The Company considers the judgements made in determining whether there is an impairment in the investment in subsidiaries to be its
significant accounting judgement. The Company compares the carrying value of the investment with its recoverable amount. The recoverable
amount is the higher of the investment’s fair value less costs to sell and its value in use (‘VIU’). VIU is the present value of expected future cash
flows from the investment. The Company uses a discounted cash flow model to derive VIU.
The key inputs into the model are (i) cash flow forecasts; (ii) growth rates; and (iii) discount rates.
Cash flow forecasts
Cash flow forecasts employed for this calculation are based on the approved FY23 budget and two year strategic plan and specifically
excludes incremental profits and other cash flows stemming from any potential future acquisitions. The cash flow forecasts involved
judgements which were subject to review and validation at a number of levels of governance and are the current best estimate of the
expected cash flows over the forecast period.
Growth rates
Growth rates beyond three years are determined by reference to local economic growth rates. The assumed long term growth rate for the
purpose of the impairment assessment is 2% (2021: 2%).
Discount rate
The discount rate applied is based on the pre-tax weighted average cost of capital for the Group which is 11% at 30 September 2022
(24 September 2021: 10%).
Profit or loss
The loss attributable to equity shareholders dealt with in the Financial Statements of the Company was £4.8m (2021: loss of £25.3m).
In accordance with Section 304 of the Companies Act 2014, the Company is availing of the exemption from presenting its individual Income
Statement to the Annual General Meeting and from filing it with the Registrar of Companies.
176 Greencore Group plc Annual Report and Financial Statements 2022
1. Company only Statement of accounting policies continued
Financial assets
Investments in subsidiaries are held at cost less impairment. The Company assesses investments for impairment whenever events or changes
in circumstances indicate that the carrying value of an investment may not be recoverable. If any such indication of impairment exists, the
Company makes an estimate of its recoverable amount. When the carrying amount of an investment exceeds its recoverable amount, the
investment is considered impaired and is written down to its recoverable amount.
Trade and other receivables
Trade and other receivables, which primarily comprise intercompany receivables, are initially recognised at their transaction value and subsequently
carried at amortised cost, net of allowance for expected credit loss. The Company applies the simplified approach to providing for expected credit
losses (‘ECL’) permitted by IFRS 9 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the
receivables. The Company uses an allowance matrix to measure the ECL of receivables based on historic credit loss experience adjusted to reflect
current and forward economic factors if there is evidence to suggest these factors will affect the ability of the counterparty to settle receivables.
The company’s intercompany receivables at 30 September 2022 amounted to £1.2m (2021: £5.3m). There is no material ECL in respect of
intercompany receivables as at 30 September 2022 or 24 September 2021.
Trade and other payables
Trade and other payables are initially recorded at their fair value and subsequently carried at amortised cost.
Intra-Group guarantees
Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other companies within its Group, the Company
considers these to be insurance arrangements and accounts for them as such. In this respect, the Company treats the guarantee contract as
a contingent liability until such time as it becomes probable that the Company will be required to make a payment under the guarantee.
2. Financial assets
Interest in
subsidiary
undertakings
£m
Total
£m
At 24 September 2021 766.6 766.6
At 30 September 2022 766.6 766.6
At reporting date, the recoverable value of investments in subsidiaries was assessed for impairment as the market capitalisation of the
Company was lower than the net assets and therefore as this is an indicator of impairment, an impairment assessment was performed in line
with the requirements of IAS 36 Impairment of Assets.
The recoverable amount of the investment has been determined based on a VIU calculation using cash flow projections from the Group’s
latest budget and forecasts, using a pre-tax rate of 11% and growth into perpetuity of 2% and discounted back to present values. There were
no impairments required in the year.
The principal holding subsidiaries of the Company are Greencore Holdings Designated Activity Company (100% ownership of which 74% is
held directly by the Company and 26% indirectly in ordinary shares) and Greencore Holdings (Ireland) Limited (100% ownership of ordinary
shares) which are all incorporated in Ireland.
3. Trade and other receivables
2022
£m
2021
£m
Amounts falling due within one year
Amounts owed by subsidiary undertakings * 1.2 5.3
Other debtors 1.9 1.5
Prepayments and accrued income 0.5 0.2
3.6 7.0
* Amounts due from subsidiary undertakings are repayable on demand.
Notes to the Company Financial Statements continued
year ended 30 September 2022
177Strategic Report | Directors’ Report | Financial Statements
4. Trade and other payables
2022
£m
2021
£m
Amounts falling due within one year
Amounts owed to subsidiary undertakings * 389.1 384.1
Trade and other creditors 3.3 4.4
Accruals 7.4 7.0
Bank overdraft – 0.1
399.8 395.6
* Amounts due to subsidiary undertakings are classified as current, as all inter-company receivables and payables are repayable on demand.
Bank overdrafts were included as part of trade and other payables in the prior year. In the current year, as the balance is more significant,
it has been presented separately on the Company Statement of Financial Position. The balance at 30 September 2022 is £5.8m (2021: £0.1m).
5. Provisions
Total
£m
At 24 September 2021 1.2
Provided in year 0.3
Released in year (0.3)
At 30 September 2022 1.2
Analysed as:
2022
£m
2021
£m
Non-current liabilities 0.6 1.1
Current liabilities 0.6 0.1
1.2 1.2
Provisions consist of potential litigation and warranty claims. It is anticipated that these provisions will unwind in one to five years.
6. Share capital
Details in respect of called-up share capital are presented in Note 25 of the Group Financial Statements.
7. Employee benefits
A subsidiary company, Irish Sugar DAC, operates a funded defined benefit pension scheme for its employees, including certain employees of
the Company. The scheme assets are held in separate Trustee administered funds. Contributions to these funds, which are charged against
profits, are based on independent actuarial advice following the most recent valuation of such funds.
The last completed full actuarial valuation was carried out at 31 March 2019 and there is another full actuarial valuation for 31 March 2022
ongoing, which has not yet been finalised. In general, actuarial valuations are not available for public inspection, however, the results of
valuations are advised to the members of the various schemes. This scheme had a net surplus at 30 September 2022 of £39.8m (2021:
£41.6m) as measured on a lAS 19 Employee Benefits basis. The contribution for the period was £Nil (2021: £Nil). At year end, £Nil (2021: £Nil)
was included in other accruals in respect of amounts owed to the scheme. The scheme was closed to future benefit accrual on 31 December
2009.
Disclosures in relation to this and all other Group legacy defined benefit pension schemes are given in Note 24 to the Group Financial Statements.
The Company also contributes to a defined contribution scheme for its employees. At year end, £Nil (2021: £Nil) was included in other
accruals in respect of amounts owed to the scheme.
178 Greencore Group plc Annual Report and Financial Statements 2022
7. Employee benefits continued
The average number of persons employed by the Company (including Executive Directors) was 23 (2021: 24) and the staff costs for the year
for those employees were:
2022
£m
2021
£m
Wages and salaries 3.9 3.9
Social insurance costs 0.3 0.3
Employee share-based payment expense 0.0 0.5
Pension costs – defined contribution plans 0.3 0.4
4.5 5.1
No employee costs were capitalised in the year (2021: £Nil)
8. Share based payments
The Company grants share awards and options under various share option plans as detailed in the Directors’ Report. A charge of £0.0m (2021:
£0.5m) was recognised in the Income Statement of the Company in respect of the employees of the Company. All disclosures relating to the
plans are given in Note 6 to the Group Financial Statements.
9. Guarantees and commitments
Pursuant to the provisions of Section 357, Companies Act 2014, the Company has guaranteed the liabilities and commitments of certain
subsidiary undertakings in Ireland for the financial year ended 30 September 2022. Where the Company has entered into financial guarantee
contracts to guarantee the indebtedness of such subsidiaries, the Company considers these to be insurance contracts and accounts for them
as such. See Note 31 for the list of these subsidiary entities.
The Company has provided bank guarantees to third party insurers for an amount of £4.6m (2021: £5.8m).
10. Statutory information
Directors’ remuneration is disclosed in the Report on Directors’ Remuneration and in Note 30 to the Group Financial Statements.
Auditor’s remuneration for services provided to the Company for the year was as follows:
2022
£’000
2021
£’000
Audit of the Company financial statements 42.0 35.0
Other assurance services 25.0 25.0
Audit related assurance services – –
Other assurance services provided for the audit of the Group and subsidiaries financial statements for the year was £797k (2021: £570k) as
disclosed in Note 4 to the Group Financial Statements.
Notes to the Company Financial Statements continued
year ended 30 September 2022
179Strategic Report | Directors’ Report | Financial Statements
Alternative Performance Measures
The Group uses the following Alternative Performance Measures (‘APMs’) which are non-IFRS measures to monitor the performance of its
operations and of the Group as a whole: Pro Forma Revenue Growth, Adjusted EBITDA, Adjusted Operating Profit, Adjusted Operating Margin,
Adjusted Profit before Tax (‘PBT’), Adjusted Earnings, Adjusted Earnings per Share, Maintenance and Strategic Capital Expenditure, Free Cash
Flow, Free Cash Flow Conversion, Net Debt, Net Debt excluding lease liabilities and Return on Invested Capital (‘ROIC’). There have been no
adjustments made to existing APMs being reported and no new APMs have been included in this report.
The Group believes that these APMs provide useful historical information to help investors evaluate the performance of the underlying
business and are measures commonly used by certain investors and security analysts for evaluating the performance of the Group. In addition,
the Group uses certain APMs which reflect the underlying performance on the basis that this provides a focus on the core business
performance of the Group. The APMs are not part of the IFRS financial statements and are accordingly not audited.
Pro Forma Revenue Growth
Pro Forma Revenue Growth FY22
The Group uses Pro Forma Revenue Growth as a supplemental measure of its performance. The Group believes that Pro Forma Revenue
Growth provides a guide to underlying revenue performance and is calculated by adjusting reported revenue for the impact of acquisitions,
disposals and foreign currency.
Pro Forma Revenue Growth adjusts reported revenue to reflect the disposal of Premier Molasses Company Limited for the period in FY21 up
to the date of disposal. As the current year was a 53 week period, Pro Forma Revenue adjusts the current year reported revenue to exclude the
additional revenue earned from the additional trading week (FY21: 52 week period). It also presents the revenue on a constant currency basis
utilising FY21 FX rates on FY22 reported revenue.
2022
Convenience Foods
UK and Ireland
%
Reported revenue – % increase from FY21 to FY22 31.3%
Impact of disposals 0.4%
Impact of currency 0.2%
Impact of additional trading week (2.5%)
Pro Forma Revenue Growth FY22 (%) 29.4%
The table below shows the Pro Forma Revenue Growth split by food to go categories and other convenience categories.
Food to go categories Other convenience categories
H1 FY22
%
H2 FY22
%
Full Year
%
H1 FY22
%
H2 FY22
%
Full Year
%
Reported revenue – % increase from FY21 to FY22 48.0% 31.1% 37.9% 12.9% 26.5% 19.8%
Impact of disposals – – – 2.0% – 1.0%
Impact of currency – – – 0.9% 0.2% 0.6%
Impact of additional trading week – (4.6%) (2.7%) – (4.2%) (2.2%)
Pro Forma Revenue Growth FY22 (%) 48.0% 26.5% 35.2% 15.8% 22.5% 19.2%
Pro Forma Revenue Growth FY21
While Pro Forma Revenue Growth is not directly comparable year on year, we have included the prior year disclosure for completeness.
This has been calculated by adjusting FY21 reported revenue to reflect the disposal of Premier Molasses Company Limited for FY20 and
for the period in FY21 up to the date of disposal. It also presents the revenue on a constant currency basis utilising FY20 FX rates on FY21
reported revenue.
2021
Convenience Foods
UK and Ireland
%
Reported revenue – % increase from FY20 to FY21 4.8%
Impact of disposals 1.3%
Impact of currency 0.1%
Pro Forma Revenue Growth FY21 (%) 6.2%
180 Greencore Group plc Annual Report and Financial Statements 2022
The table below shows the Pro Forma Revenue Growth split by food to go categories and other convenience categories.
Food to go categories Other convenience categories
H1 FY21
%
H2 FY21
%
Full Year
%
H1 FY21
%
H2 FY21
%
Full Year
%
Reported revenue – % increase from FY20 to FY21 (25.6%) 58.6% 9.0% (7.4%) 4.2% (1.9%)
Impact of disposals – – – 2.1% 4.7% 3.4%
Impact of currency – – – (0.3%) 0.7% 0.1%
Pro Forma Revenue Growth FY21 (%) (25.6%) 58.6% 9.0% (5.6%) 9.6% 1.6%
Adjusted EBITDA, Adjusted Operating Profit and Adjusted Operating Margin
Adjusted EBITDA, Adjusted Operating Profit and Adjusted Operating Margin are used by the Group to measure the underlying and ongoing
operating performance of the Group.
The Group calculates Adjusted Operating Profit as operating profit before amortisation of acquisition related intangibles and exceptional
items. Adjusted EBITDA is calculated as Adjusted Operating Profit plus depreciation and amortisation of intangible assets. Adjusted Operating
Margin is calculated as Adjusted Operating Profit divided by reported revenue.
The following table sets forth a reconciliation from the Group’s Profit for the financial year to Adjusted Operating Profit, Adjusted EBITDA and
Adjusted Operating Margin:
2022
£m
2021
£m
Profit for the financial year 32.3 25.7
Taxation
(A)
7.5 2.1
Exceptional items 16.5 (11.7)
Net finance costs
(B)
12.3 19.0
Amortisation of acquisition related intangibles 3.6 3.9
Adjusted Operating Profit 72.2 39.0
Depreciation and amortisation
(C)
54.7 53.3
Adjusted EBITDA 126.9 92.3
Adjusted Operating Margin (%) 4.2% 2.9%
(A) Includes tax credit on exceptional items of £3.0m (2021: £0.4m).
(B) Finance costs less finance income.
(C) Excludes amortisation of acquisition related intangibles.
Adjusted Profit Before Tax (‘PBT’)
Adjusted PBT is used as a measure by the Group to measure overall performance before associated tax charge and other specific items.
The Group calculates Adjusted PBT as profit before taxation, excluding tax on share of profit of associate and before exceptional items,
pension finance items, amortisation of acquisition related intangibles, FX on inter-company and certain external balances and the movement
in the fair value of all derivative financial instruments and related debt adjustments.
The following table sets out the calculation of Adjusted PBT:
2022
£m
2021
£m
Profit before taxation 39.8 27.8
Exceptional items 16.5 (11.7)
Pension finance items 1.1 1.7
Amortisation of acquisition related intangibles 3.6 3.9
FX and fair value movements
(A)
(1.2) 0.9
Adjusted Profit Before Tax 59.8 22.6
(A) FX on inter-company and certain external balances and the movement in the fair value of all derivative financial instruments and related debt adjustments.
Alternative Performance Measures continued
181Strategic Report | Directors’ Report | Financial Statements
Adjusted Basic Earnings Per Share (‘EPS’)
The Group uses Adjusted Earnings and Adjusted EPS as key measures of the overall underlying performance of the Group and returns
generated for each share.
Adjusted Earnings is calculated as Profit attributable to equity holders (as shown on the Group Income Statement) adjusted to exclude
exceptional items (net of tax), the effect of foreign exchange (‘FX’) on inter-company and external balances where hedge accounting is not
applied, the movement in the fair value of all derivative financial instruments and related debt adjustments, the amortisation of acquisition
related intangible assets (net of tax) and the interest expense relating to legacy defined benefit pension liabilities (net of tax). Adjusted EPS is
calculated by dividing Adjusted Earnings by the weighted average number of Ordinary Shares in issue during the year, excluding Ordinary
Shares purchased by Greencore and held in trust in respect of the Annual Bonus Plan and the Performance Share Plan. Adjusted EPS
described as an APM here is Adjusted Basic EPS.
The following table sets forth a reconciliation of the Group’s profit attributable to equity holders of the Group to its Adjusted Earnings for the
financial years indicated.
2022
£m
2021
£m
Profit attributable to equity holders of Greencore 32.3 25.4
Exceptional items (net of tax) 13.5 (12.1)
FX effect on inter-company and external balances where hedge accounting is not applied 0.7 (0.1)
Movement in fair value of derivative financial instruments and related debt adjustments (1.9) 1.0
Amortisation of acquisition related intangible assets (net of tax) 2.7 3.2
Pension financing (net of tax) 0.8 1.4
Adjusted Earnings 48.1 18.8
2022
‘000
2021
‘000
Weighted average number of ordinary shares in issue during the year 523,382 511,764
2022
Pence
2021
Pence
Adjusted Basic Earnings Per Share 9.2 3.7
Capital Expenditure
Maintenance Capital Expenditure
The Group defines Maintenance Capital Expenditure as the expenditure required for the purpose of sustaining the operating capacity and
asset base of the Group, and of complying with applicable laws and regulations. It includes continuous improvement projects of less than £1m
that will generate additional returns for the Group
Strategic Capital Expenditure
The Group defines Strategic Capital Expenditure as the expenditure required for the purpose of facilitating growth and developing and
enhancing relationships with existing and new customers. It includes continuous improvement projects of greater than £1m that will generate
additional returns for the Group. Strategic Capital Expenditure is generally expansionary expenditure creating additional capacity beyond what
is necessary to maintain the Group’s current competitive position and enables the Group to service new customers and/or contracts or to
enter into new categories and/or new manufacturing competencies.
The following table sets forth the breakdown of the Group’s purchase of property, plant and equipment and purchase of intangible assets
between Strategic Capital Expenditure and Maintenance Capital Expenditure:
2022
£m
2021
£m
Convenience Foods UK and Ireland
Purchase of property, plant and equipment 48.6 37.1
Purchase of intangible assets 1.4 3.1
Net cash outflow from capital expenditure 50.0 40.2
Strategic Capital Expenditure 33.1 24.0
Maintenance Capital Expenditure 16.9 16.2
Net cash outflow from capital expenditure 50.0 40.2
182 Greencore Group plc Annual Report and Financial Statements 2022
Free Cash Flow and Free Cash Flow Conversion
The Group uses Free Cash Flow to measure the amount of underlying cash generation and the cash available for distribution and allocation.
The Group calculates the Free Cash Flow as the net cash inflow/outflow from operating and investing activities before Strategic Capital
Expenditure, acquisition and disposal of undertakings, disposal of investment property and adjusting for dividends paid to non-controlling
interests.
The Group calculates Free Cash Flow Conversion divided by Adjusted EBITDA.
The following table sets forth a reconciliation from the Group’s net cash inflow from operating activities and net cash outflow from investing
activities to Free Cash Flow:
2022
£m
2021
£m
Net cash inflow from operating activities 92.9 102.7
Net cash outflow from investing activities (50.0) (17.6)
Net cash inflow from operating and investing activities 42.9 85.1
Strategic Capital Expenditure 33.1 24.0
Repayment of lease liabilities (17.3) (14.3)
Disposal of undertakings – (16.3)
Disposal of Investment Property – (6.3)
Free Cash Flow 58.7 72.2
Adjusted EBITDA 126.9 92.3
Free Cash Flow Conversion (%) 46.3 78.2
Net Debt and Net Debt excluding lease liabilities
Net Debt is used by the Group to measure overall cash generation of the Group and to identify cash available to reduce borrowings. Net Debt
comprises current and non-current borrowings less net cash and cash equivalents and bank overdrafts.
Net debt excluding lease liabilities is a measure used by the Group to measure Net Debt excluding the impact of IFRS 16 Leases. Net debt
excluding lease liabilities is used for the purpose of calculating leverage under the Group’s financing agreements.
The reconciliation of opening to closing Net Debt for the year ended 30 September 2022 is as follows:
At
24 September
2021
£m
Cash flow
£m
Translation
and non-cash
adjustments
£m
At
30 September
2022
£m
Cash and cash equivalents and bank overdrafts 73.6 (26.5) (0.4) 46.7
Bank borrowings (150.1) (9.6) 0.9 (158.8)
Private Placement Notes (106.6) 47. 3 (8.6) (67.9)
Net debt excluding lease liabilities (183.1) 11.2 (8.1) (180.0)
Lease liabilities (59.6) 18.5 (6.9) (48.0)
Net Debt (242.7) 29.7 (15.0) (228.0)
At
25 September
2020
£m
Cash flow
£m
Translation
and non-cash
adjustments
£m
At
24 September
2021
£m
Cash and cash equivalents and bank overdrafts 47.0 27.0 (0.4) 73.6
Bank borrowings (283.5) 130.9 2.5 (150.1)
Private Placement Notes (114.0) – 7.4 (106.6)
Net debt excluding lease liabilities (350.5) 157.9 9.5 (183.1)
Lease liabilities (60.7) 15.6 (14.5) (59.6)
Net Debt (411.2) 173.5 (5.0) (242.7)
Alternative Performance Measures continued
183Strategic Report | Directors’ Report | Financial Statements
Return On Invested Capital (‘ROIC’)
The Group uses ROIC as a key measure to determine returns for the Group as a whole and as a key measure to determine potential new
investments.
The Group uses invested capital as a basis for this calculation as it reflects the tangible and intangible assets the Group has added through its
capital investment programme, the intangible assets the Group has added through acquisition, as well as the working capital requirements of
the business. Invested capital is calculated as net assets (total assets less total liabilities) excluding Net Debt, the carrying value of derivatives
not designated as fair value hedges, and retirement benefit obligations (net of deferred tax assets). Average invested capital is calculated by
adding the invested capital from the opening and closing Statement of Financial Position and dividing by two.
The Group calculates ROIC as Net Adjusted Operating Profit After Tax (‘NOPAT’) divided by average invested capital. NOPAT is calculated as
Adjusted Operating Profit plus share of profit of associates before tax, less tax at the effective rate in the Income Statement.
The following table sets forth the calculation of Net Operating Profit After Tax (‘NOPAT’) and invested capital used in the calculation of ROIC.
2022
£m
2021
£m
Adjusted Operating Profit 72.2 39.0
Taxation at the effective tax rate
(A)
(13.7) (5.9)
Group NOPAT 58.5 33.1
2022
£m
2021
£m
Invested capital
Total assets 1,338.7 1,291.5
Total liabilities (873.1) (868.3)
Net Debt exclusive of liability held for sale 228.0 242.7
Derivatives not designated as fair value hedges (14.8) 5.6
Retirement benefit obligation (net of deferred tax asset) 10.4 29.3
Invested capital for the Group 689.2 700.8
Average invested capital for ROIC calculation for Group
(B)
695.0 728.8
ROIC (%) for the Group 8.4 4.5
(A) The effective tax rates for the Group for the financial year ended 30 September 2022 and 24 September 2021 were 19% and 15%, respectively.
(B) The invested capital for the Group was £756.8m in 2020.
184 Greencore Group plc Annual Report and Financial Statements 2022
Other information
Greencore Group plc (the ‘Group’, the ‘Company’ or ‘Greencore’) is an Irish incorporated company registered under number 170116.
ItsOrdinary Shares are quoted on the London Stock Exchange (Symbol: GNC). Greencore has a Level 1 American Depositary Receipts
programme (Symbol: GNCGY).
Financial Calendar
Annual General Meeting 26 January 2023
FY23 H1 Results 30 May 2023
FY23 financial year end 29 September 2023
FY23 Full Year Results 28 November 2022
Advisors and
Registered Office
Group Company Secretary
Damien Moynagh
Registered Office
No. 2 Northwood Avenue
Northwood Business Park
Santry
Dublin 9
D09 X5N9
Ireland
Auditor
Deloitte Ireland LLP
Earlsfort Terrace
Dublin 2
D02 AY28
Ireland
Registrar and
Transfer Office
Computershare Investor
Services (Ireland) Limited
3100 Lake Drive
Citywest Business Campus
Dublin 24
D24 AK82
Ireland
Solicitors
Arthur Cox
Ten Earlsfort Terrace
Dublin 2
D02 T380
Ireland
Eversheds Sutherland
Bridgewater Place
Water Lane
Leeds
LS11 5DR
United Kingdom
Bryan Cave LLP
One Metropolitan Square
211 North Broadway
Suite 3600
St. Louis MO 63102–2750
United States
Stockbrokers
Goodbody Stockbrokers
Ballsbridge Business Park
Ballsbridge
Dublin 4
D04 YW83
Ireland
HSBC Bank plc
8 Canada Square
London
E14 5HQ
United Kingdom
Shore Capital
Cassini House
57 St James’s Street
London
SW1A 1LD
United Kingdom
American Depositary
Receipts
BNY Mellon
101 Barclay Street
22nd Floor – West
New York NY 10286
United States
Website
www.greencore.com
Follow Greencore on Twitter
@GreencoreGroup
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AND ANY PRINTER DETAILS TBC
Greencore Group plc
No. 2 Northwood Avenue, Northwood Business Park
Santry, Dublin 9, DO9 X5N9 T: +353 (0) 1 605 1000