GREGGS plc Annual Report & Accounts 2021

COMING BACK

STRONGER

AND BETTER

EMERGING STRONGER

AND BETTER

INTRODUCTION

Strategic Report

2021 highlights 1

At a glance 2

Year in review 8

Chair’s statement 10

Business model 13

Chief Executive’s report 14

Q&A with Roisin Currie, CEO Designate 20

Our strategy in action 24

Key performance indicators 34

The Greggs Pledge 36

Task Force on Climate-related

Financial Disclosures 38

Our stakeholders 45

Financial review 55

Risk management 59

Directors’ Report

Board of Directors and Secretary 64

Governance report 68

Audit Committee report 77

Directors’ remuneration report 84

Statement of Directors’ responsibilities 107

Accounts

Independent auditor’s report 108

Consolidated income statement 116

Consolidated statement of

comprehensive income 116

Balance sheets 117

Statements of changes in equity 118

Statements of cashflows 122

Notes to the consolidated accounts 124

Ten-year history 168

Alternative performance measures 169

Secretary and advisers 171

In a second year dominated by disruption due to

Covid, our teams once again coped magnificently

with unprecedented and rapidly-changing conditions.

We set out at the beginning of the year to show that

we could not only cope with Covid, but emerge from

this crisis both stronger and better as a business.

Our results and achievements in 2021 show that we

achieved both those ambitions, and I would like to

take this opportunity to, once again, thank all of our

teams across the country who rose so well to meet

these challenges.

Roger Whiteside OBE, Chief Executive

8 March 2022

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021Greggs plc

2021 HIGHLIGHTS

NEW FIVE-YEAR

GROWTH STRATEGY

ANNOUNCED

In October, we set out our ambitious

plan to double Greggs’ sales in the next

five years. The fundamental strategic

pillars of our business model have not

changed but we have identified four key

growth drivers, including 'Growing and

developing the Greggs estate' which will

become the focus of our plan to reach

our full potential in the years ahead.

Read more about our key growth drivers on

pages 24 to 31

DIGITAL TRANSFORMATION

THROUGHOUT THE BUSINESS

We successfully launched our new website and Greggs

App, including our enhanced loyalty proposition.

Customers can now earn stamps and rewards

across all of our menu categories, on both walk-in

and Click + Collect purchases. Deployment of our

new Customer Relationship Management capabilities

will allow our teams to talk to our customers like never

before and continue our journey to give additional

and personalised services and offers across

multiple channels.

Read more about our digital transformation on pages 28 and 29

THE GREGGS PLEDGE

Our sustainability plan, The Greggs Pledge,

is about how we can do more to help people,

protect the planet and work with our partners

to change the world for the better. Our

sustainability report, published alongside

the annual report, is available to view now.

Financial highlights

Operational highlights

Total sales

£1,229.7m

2020: £811.3m

Two-year like-for-like (LFL) sales

-3.3%

Pre-tax profit

£145.6m

2020: £13.7m loss

Diluted earnings per share

114.3p

2020: loss per share of 12.9p

Special dividend

40.0p

2020: £nil

Colleague profit-sharing

£16.6m

Total dividend

42.0p

2020: nil

* Detailed calculations of Alternative Performance Measures, not otherwise shown in the accounts and related notes,

are shown on pages 169 and 170

And read The

Greggs Pledge

at corporate.

greggs.co.uk/

responsibility

You can also

read our annual

report online at

corporate.

greggs.co.uk/

investors

Annual Report and Accounts 2021Greggs plc

AT A GLANCE

With ownership of our supply chain, multiple

service channels for our customers and

around 2,200 shops nationwide, we are in a

unique position to make great tasting, freshly

prepared food accessible to everyone.

Throughout the pandemic, our teams have

risen to the many challenges and worked

tirelessly to provide our customers with

great tasting food-on-the-go and the best

experience, day in, day out.

Our purpose

To make great tasting,

freshly prepared food

accessible to everyone.

Our vision

To be the customers’

favourite for food-on-

the-go.

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021Greggs plc

Manufacturing

In our own food manufacturing

centres of excellence, we make

great tasting, freshly prepared

food that our customers can trust.

Logistics

We move products from our food

manufacturing sites to our shops

ourselves, which helps us to keep

our prices as low as possible.

Our people

We have more than 25,000 amazing

colleagues, working together to

provide our customers with the

best experience, offering fast and

friendly service, day in, day out.

Customer channels

With around 2,200 shops,

including 375 with franchise

partners, our wholesale

partnership, delivery and

Click + Collect, we are available

to serve customers wherever,

whenever and however

they choose.

Customer

relationships

Through our new Greggs App, we

are building long-term connections

with our customers and rewarding

their loyalty. Our new CRM

system allows us to talk to our

customers on a regular one-to-one

basis, via email, SMS or the

Greggs App.

AT A GLANCE CONTINUED

WHAT WE DO

We are a modern food-on-the-go retailer providing a wide menu of food

and drink choices wherever and whenever our customers need us.

Purpose

To make good, freshly prepared

food accessible to everyone.

Quality

We want our products to be

the best they can be.

Convenience

We want to be able to serve

customers wherever, whenever

and however they choose.

Value

We offer great value in an

extremely competitive

marketplace.

Service

We provide customers with fast

and friendly service, fixing issues

without a fuss and rewarding

them for their loyalty.

WHAT MAKES US DIFFERENT

We have been around for over 80 years building a reputation for offering great quality, freshly prepared food at low prices with great service.

We are a much-loved and trusted brand that is for everyone and available to serve our customers wherever, whenever and however they choose.

Annual Report and Accounts 2021

Greggs plc

OUR STRATEGY

While Greggs has enjoyed tremendous success in recent years as we sought to become the customers’ favourite for

food-on-the-go, our journey is far from over. We have an ambitious plan to double Greggs’ sales in the next five years

and while the fundamental strategic pillars of our business model have not changed, we are continually learning and

adapting and have identified four key growth drivers which will become the focus of our strategy to reach our full

potential in the years ahead.

AT A GLANCE CONTINUED

OUR FUNDAMENTAL STRATEGIC PILLARS

THE GREGGS PLEDGE: DEDICATED TO DOING GOOD

Stronger, healthier communities

We pledge to play our part in improving the nation’s diet

by helping to tackle obesity, providing free breakfasts

to school children and giving surplus food to those who

need it most.

Safer planet

We pledge to become a carbon neutral,

zero waste business.

Better business

We pledge to increase the diversity of our workforce,

and to use our purchasing power responsibly, with the

aim of making things better in our supply chain.

Great tasting, freshly

prepared food

You cannot beat freshly baked, freshly

prepared food. With our great flavours,

responsibly-sourced ingredients,

consistent quality and outstanding value

our food-on-the-go leads the way.

Best customer experience

Fast and friendly service is a key reason why

customers choose Greggs. Great service is

not an easy thing to deliver under pressure,

and our shop teams do an amazing job.

Through our Greggs App, we are able to

build longlasting relationships with our

customers and reward their loyalty.

Competitive supply chain

By owning our supply chain, we can make

great tasting, freshly prepared food at low

prices accessible to everyone.

First class support teams

We’ve invested heavily in leading-edge

systems. They equip our support teams to

provide the best service to their colleagues

and, ultimately, our customers.

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021Greggs plc

OUR FOUR KEY DRIVERS OF GROWTH

AT A GLANCE CONTINUED

Growing and

developing the

Greggs estate

With a strong new shop opening pipeline

and a significant opportunity to improve

the quality of our estate through

relocations and the next generation

of shop refits, our ambition is to reach

at least 3,000 shops as the next target

for our supply chain capacity

planning assumptions.

Read more on sustainability on

pages 36 to 44

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021Greggs plc

Percentage of female employees

69%

Total employees

25,174

OUR CULTURE AND VALUES

Our people are what makes our business successful. We aim to provide them

with a great place to work, where they feel valued and have the opportunity to

fulfil their potential. Our values commit us to being friendly, inclusive, honest,

respectful, hardworking and appreciative.

OUR STAKEHOLDERS

Maintaining good relationships with our essential stakeholders

is key to what we do. Our stakeholder family includes customers,

colleagues, investors, suppliers and, of course, the

communities that we serve.

HOW WE MEASURE OUR PERFORMANCE

Constant monitoring of how we meet our objectives and

challenges is vital to success. Naturally, we look at financial

performance through our principal KPIs, but doing business

in the right way is measured too, with wide-ranging balanced

scorecards examining every aspect of what we do.

Customers

Shareholders

Colleagues Suppliers

Communities

AT A GLANCE CONTINUED

Read more on our stakeholders on pages 45 to 54

Annual Report and Accounts 2021Greggs plc

February

Launch of The Greggs Pledge

We set out our ten commitments

about how we can do more to help

people, protect the planet and work

with our partners to change the world

for the better, including a pledge to

achieve net zero carbon, as we all

fight to save our planet from the

threat of global warming. Our latest

report is available to view here:

corporate.greggs.co.uk/

January

Putting an end to food waste

with Too Good To Go

We ramped up our partnership with Too

Good To Go, the food-waste saving app,

a partnership that would help us save

over 810 tonnes of food in 2021.

April

Greggs Foundation’s annual

Breakfast Club Appeal

With the help of customers, colleagues and

partners, we helped the Greggs Foundation

to raise over £120,000 for its Breakfast Club

Appeal, enabling us to support 480,000

children with a free breakfast in one of

our Breakfast Club schools.

YEAR IN REVIEW

STRONGER

BUSINESS

From the launch of The Greggs Pledge,

supporting the Greggs Foundation in its biggest

Breakfast Club Appeal yet and getting our shops

ready for Natasha's Law, to launching our new

Greggs App and website and celebrating new

shop openings, there is a lot to be proud of.

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021Greggs plc

YEAR IN REVIEW CONTINUED

May

200th shop opening with

franchise partner Euro Garages

We celebrated this big milestone

opening with longstanding partner

Euro Garages at Shavington in Crewe.

June

New Greggs website and

App launched

We relaunched our internally

developed Greggs website and

App with great new features for

customers, including rewards across

every category and a new CRM system,

making it easier to send Greggs fans

the right message at the right time.

September

Balliol National Distribution

Centre official opening

Our Main Board team attended the

official opening of our new frozen

storage facility which brings together

the majority of our frozen storage

under one roof. This facility will not

only improve efficiency, but will also

have a hugely positive impact on

reducing our carbon footprint.

October

Natasha’s Law

Greggs is always there for our

customers, and that goes especially

for helping them to understand what’s

in our products, in relation to allergens.

Even when the pandemic took hold,

our colleagues never lost focus and

did an incredible job getting us ready

for Natasha’s Law.

December

Major milestone with Just Eat

We rolled out our partnership

with Just Eat to over 1,000 shops

nationwide, meaning more and more

customers can enjoy Greggs in the

comfort of their own homes.

August

Launched new partnership with

charity Only a Pavement Away

We have a longstanding history

of working with people from

disadvantaged backgrounds and, in

partnership with Only a Pavement

Away, we aim to bring more people

that are at risk of homelessness into

secure and sustainable employment

and help them to rebuild their lives.

BETTER

BUSINESS

Annual Report and Accounts 2021Greggs plc

CHAIR’S STATEMENT

BETTER

ADAPTED

TO A NEW

CHAPTER

Greggs returned to the front foot in 2021. With a strong team,

brand and financial position we are well-placed to embrace

the many strategic opportunities ahead of us. We have an

ambitious plan and the resources to pursue it for the

benefit of all of our stakeholders.

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021Greggs plc

CHAIR’S STATEMENT CONTINUED

Overview

2021 was a year of further recovery for Greggs as we

navigated the ongoing challenges posed by the pandemic

and set out a clear strategic plan to address the

opportunities that lie ahead. An ability to react quickly to

changing conditions has been crucial in recent years and

the Greggs team has demonstrated this agility, delivering a

strong 2021 financial result in the face of ongoing disruption

to demand and in our supply chain.

At the same time we have remained focused on our

responsibilities to colleagues and the broader stakeholder

community. By publishing The Greggs Pledge we set out

clear environmental and social commitments in those

areas where we believe we can make the most impact

as we seek to build on Greggs strong reputation as a

responsible business.

The Board’s strategy review was of particular importance

in 2021 as we reflected on the lessons of the past year and

their implications for our plans. The result is an ambitious

strategic plan, founded on broadening access to Greggs

across the day and also through new shops and channels.

We believe that Greggs’ brand strength and the breadth

of its customer offer makes the business well-placed to

grow quickly as the economy recovers.

Our people and values

The Board makes considerable efforts to stay close to the

Greggs team, making sure that we are in tune with the

business challenges and issues that they encounter. In the

face of continued challenges from a pandemic-affected

trading environment our colleagues, once more, responded

magnificently, and the Board does not take this for granted.

We were pleased to support proposals to bring forward by

five months the annual pay award for colleagues to thank

them for their contribution in 2021.

A particular focus for the business in recent years has been

the desire to progress the equality and diversity agenda.

As part of Greggs’ ambition to achieve the National Equality

Standard (NES) the Board engaged in a training session and

reviewed business progress across a wide range of

inclusivity initiatives. Directors also attended special interest

groups designed to represent the needs of colleagues and

promote equality of opportunity. Whilst there is more to

do to reach the NES, the Board is encouraged by the

strong progress being made from a solid base of Greggs’

values-driven approach.

In the face of the challenges of the past two years the Board

considers it more important than ever to support the work of

the Greggs Foundation in the communities where we

operate. The charity, independent of, but supported by, the

Company has been working to build stronger, healthier

communities for 35 years. The Greggs Foundation has been

chaired for the past 20 years by Andrew Davison OBE, who

retired from this voluntary role in 2021. I would like to record

the Board’s immense gratitude to Andrew for his leadership

and commitment over so many years, and for the impact that

this has had on so many people. We look forward to working

with Andrew’s successor, Joanna Dyson OBE, to further the

work of the Greggs Foundation over the years ahead.

Another important relationship has been with the trustee

of the Company’s legacy defined benefit pension scheme.

Richard Bottomley OBE has recently retired from chairing

the trustee group, a position he held for 12 years, and leaves

the scheme in a very strong position. On behalf of the

Company and the scheme’s members I would like to thank

Richard for the great progress made under his period

of stewardship.

The Board

The Board has a plan in place for succession for both

Executive and Non-Executive Directors. In March 2021 I

explained that, although under the UK Corporate

Governance Code I would have normally been expected

to step down as Chair, the Board had asked me to remain

in place to provide continuity of leadership as we

addressed the Chief Executive’s succession.

Greggs plc

Annual Report and Accounts 2021Greggs plc

In 2021 the Company’s Nominations Committee commenced

a recruitment process to address Chief Executive

succession as Roger Whiteside approached retirement

age. The Committee appointed an executive search firm

to conduct a comprehensive search, which considered

internal and external candidates. The quality of candidates

was strong and, following a rigorous process, the

Committee recommended the appointment of Roisin Currie,

Greggs Retail and Property Director, as Chief Executive to

succeed Roger Whiteside. Roisin was appointed as CEO

Designate and as an Executive Director on 1 February 2022

and will take over as Chief Executive at the end of the

Company’s annual general meeting (AGM) on 17 May 2022.

Roger Whiteside will step down from the Board at the

close of the AGM but will remain available to support the

transition process until 5 January 2023.

Roger has led Greggs through a period of extraordinary

and sustained success and I would like to thank him for

his exceptional leadership since his appointment in 2013.

His straightforward, personable and engaging style has

engendered great trust within the business and an

enthusiastic following amongst all our stakeholders.

I would like to wish Roger a long and happy retirement.

As part of our plan to phase succession of Non-Executive

Directors the Board announced the appointment of

Mohamed Elsarky as an independent Non-Executive

Director in June 2021, and Peter McPhillips retired as an

independent Non-Executive Director in July 2021. Sandra

Turner, Senior Independent Director, took over from Peter

as the Non-Executive Director responsible for overseeing

colleague engagement.

In the second half of 2022 the Nominations Committee will

commence activity to identify my successor as Chair of the

Board. As previously communicated, I expect to remain in

position only as long as is necessary to ensure a good

transition to the new Chief Executive and whilst the

process of identifying my successor takes place.

Further details of the Board’s work are included in the

governance and committee sections of the annual report.

Dividend

At the time of the interim results in August 2021 the Board

declared an interim ordinary dividend of 15.0 pence per share

and stated its intention to return to a full-year ordinary

dividend that is around two times covered by underlying

earnings after taxation (profit after tax excluding exceptional

items). In line with this ordinary dividend policy, the Board

intends to recommend at the AGM a final dividend of 42.0

pence per share (2020: nil), giving a total ordinary dividend

for the year of 57.0 pence (2020: nil).

Going forward our dividend policy will continue to target a

progressive ordinary dividend, normally around two times

covered by profit after taxation, with further surplus cash

being returned to shareholders as appropriate. Having taken

into account our strong balance sheet position and the

Company’s investment and working capital requirements,

and the intention to maintain our progressive ordinary

dividend policy, the Board has declared an additional

special dividend of 40.0 pence per share (2020: nil), to

be paid in April.

Our Finance Director, Richard Hutton, outlines the expected

application of the distribution policy in more detail in the

financial review.

Looking ahead

Greggs has once again demonstrated its resilience and the

cash-generative nature of its business model. It is a great

business with an excellent team, and although short-term

trading conditions remain challenging, we have great

confidence in the opportunities that lie ahead and strong

liquidity to support our investment plan that will unlock

further growth.

Ian Durant

Chair

8 March 2022

CHAIR’S STATEMENT CONTINUED

Total ordinary dividend for the year

57.0p

Special dividend to be paid in April

40.0p

DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021Greggs plc

STRATEGIC REPORT

Greggs plc

BUSINESS MODEL

Manufacturing

We make great tasting, freshly prepared food that

customers can trust, in our own manufacturing

centres of excellence.

Logistics

We move products from our manufacturing sites

to our shops ourselves, helping to keep prices as

low as possible.

Our people

We have more than 25,000 amazing colleagues,

providing our customers with the best experience

every day.

Customer channels

With around 2,200 shops across the UK, delivery

and wholesale partnerships and Click + Collect,

we can serve our customers wherever, whenever

and however they choose.

Customer relationships

Our Greggs App and CRM system allow us to build

long-term connections with our customers and

reward their loyalty.

What we do

Great tasting,

freshly prepared food

Best customer

experience

First class

support teams

Competitive

supply chain

Our strategic pillars

Customers

No. 1

on YouGov’s BrandIndex measure

2021, within the QSR, coffee shop

and food delivery sector.

Colleagues

82%

engagement score in our latest

employee opinion survey.

Suppliers

92.4%

of invoices were paid to suppliers

within the terms agreed.

Shareholders

97p

dividend restarted.

57p per share for 2021, plus

40p special dividend.

Communities

£3.7m

of grants were awarded by the

Greggs Foundation.

How we add value to our stakeholders

Growing the Greggs estate

Through new shop openings,

relocations and the next generation

of shop refits, our ambition is to

reach at least 3,000 shops.

Extending trade into

the evening

Through extending our trading hours,

exciting new additions to our menu

and leveraging our existing customer

channels, we are able to compete

more effectively for food-on-the-go

sales in the evening.

Digital channels

Through our digital channels,

including delivery and Click + Collect,

we are able to compete more

effectively at all times of day.

Making Greggs mean more

to more people

Through timely, effective customer

communication via our new Greggs

App, website and CRM system, we can

communicate with our customers and

be a brand considered by more people

when they need food-on-the-go.

Key drivers of growth

Purpose

To make good, freshly

prepared food accessible

to everyone.

Quality

We want our products

to be the best they can be.

Convenience

We want to be able to serve

customers wherever,

whenever and however

they choose.

Value

We offer great value in an

extremely competitive

marketplace.

Service

We provide customers with fast

and friendly service, fixing

issues without a fuss and

rewarding them for their loyalty.

Greggs Pledge

Stronger, healthier

communities. Better

business. Safer planet.

Read more on page 36

What makes us different

Investing in our supply chain and systems for a bigger business.

We’ve transformed our supply chain and systems infrastructure to increase

capacity and grow our digital capabilities.

Annual Report and Accounts 2021Greggs plc

In a second year dominated by disruption due to Covid, our teams once

again coped magnificently with unprecedented and rapidly-changing

conditions. We set out at the beginning of the year to show that we

could not only cope with Covid, but emerge from this crisis both

stronger and better as a business.

CHIEF EXECUTIVE'S REPORT

STRONGER

PLATFORM

FOR FUTURE

GROWTH

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021Annual Report and Accounts 2021Greggs plc

CHIEF EXECUTIVE'S REPORT CONTINUED

Our results and achievements in 2021 show

that we achieved both those ambitions,

and I would like to take this opportunity

to, once again, thank all of our teams

across the country who rose so well

to meet these challenges.

Adapting to the unexpected

We began the year with the country in lockdown, but with

safe operating practices in place we were able to continue

trading, albeit with restricted customer footfall in many

areas. In a foretaste of things to come we faced the first of

many unpredictable disruptions when new regulations in

Scotland left us with no option but to close our shops there

as we developed new solutions to protect our colleagues,

who were required to serve from our doorways. Our Scottish

teams worked tirelessly to redesign our operating

procedures so that we could open again.

Thankfully, conditions eased in the spring as first non-

essential retail, and subsequently the seated hospitality

sector, were allowed to open their doors again. In that period

we saw customer footfall returning in traditional locations,

although not to pre-Covid levels, with customers remaining

cautious. Nevertheless, demand in our walk-in channel rose

sufficiently alongside strong delivery sales to see us return

to positive total like-for-like sales growth in the second

quarter when compared to 2019, which was ahead of our

expectations. We had done well to accelerate our services in

the delivery channel as Covid struck and, now that walk-in

footfall was returning, delivery demand was proving to be

largely incremental to this, extending the reach of our shops

beyond customers passing by.

Our battle with Covid took a new turn in the summer, when

employee absence climbed dramatically as the test and

trace system imposed increased levels of isolation for those

encountering the virus. Pressure on our teams increased

again with high levels of absence combined with a tightening

labour market, making recruitment more difficult as we

sought to fill vacancies and create new teams for our shop

opening programme. While absence levels settled down

later in the autumn, the recruitment challenge became

more difficult with key skill shortages, particularly for

drivers in our supply chain.

WHAT’S NEW IN OUR FIVE-YEAR

GROWTH STRATEGY

We have identified four key growth

drivers which will become the focus

of our plan to reach our full potential

in the years ahead.

Growing and developing the Greggs estate

Through new shop openings, relocations and the

next generation of shop refits, our ambition is to

reach 3,000 shops as the next target for our supply

chain planning assumptions.

Extending trade into the evening

Through extending our trading hours, exciting new

additions to our menu and leveraging our existing

customer channels, we are able to compete more

effectively for food-on-the-go sales in the evening.

Digital channels

Through our digital channels, including delivery

and Click + Collect, we are able to compete more

effectively at all times of the day.

Making Greggs mean more to more people

Through timely, effective customer

communication via our new Greggs App, website

and CRM system, we can communicate with our

customers and be a brand considered by more

people when they need food-on-the-go.

Read more on pages 24-40

Shops to offer delivery service in 2022

1,300

Target number of new shops

3,000

Annual Report and Accounts 2021Greggs plc

CHIEF EXECUTIVE'S REPORT CONTINUED

Employee absence and skill shortages also contributed to the

broader challenges we were experiencing in our supply chain.

With a recovering global economy seeing demand exceed

supply in many areas, unpredictable supply shortages

became a daily feature of our operations. Part of our

response was to return to focusing on our bestselling lines

and to restrict our programme of new product launches.

Despite all these challenges we continued to deliver positive

like-for-like-sales growth with travel restrictions creating a

‘staycation’ tailwind in the summer. Some of that momentum

fell back in the autumn as VAT support reduced, followed by

a step back in customer footfall approaching Christmas as

new Covid guidance saw a return to working from home.

In my long retail career I have never experienced such high

levels of prolonged disruption to operations, and we owe our

success last year to the commitment and willingness of our

teams to work around these problems. We chose to recognise

that effort by bringing forward our annual pay award for all our

operational teams by five months from 2022 into 2021, both

as a special thank you, but also to help us recruit additional

support for them by increasing our attraction in the labour

market as we entered the new year.

Financial results

Total sales grew to a record £1,229.7 million in 2021 (2020:

£811.3 million, 2019: £1,167.9 million), a 5.3% increase on the

level seen in 2019. Within this, company-managed shop

like-for-like sales were 3.3% lower than the equivalent

period in 2019, with sales growth returning following the

lifting of restrictions seen in the first quarter.

Pre-tax profit for the year was £145.6 million (2020: £13.7

million loss, 2019: £108.3 million profit). As a result of the

return to profitability we are able to recommence our long

tradition of sharing 10% of our profits with colleagues each

year and in March 2022 we will share £16.6 million with our

people as a result of our performance in 2021. We finished

2021 with a very strong cash position that will support our

ambitious plans to invest for further growth, as outlined

below, as well as the recommencement of dividend

payments to our shareholders.

Coming back stronger

Having demonstrated our resilience in coping with all

that these two years of crisis have thrown at us, we were

determined to demonstrate that we could come back

stronger as a business. While Greggs has enjoyed

tremendous success in recent years as we sought to

“ Our results and achievements in 2021 show that we

have emerged from the pandemic both stronger

and better as a business. I would like to thank, once

again, all of our teams across the country who rose

so well to meet the challenges of the last two years.”

Roger Whiteside OBE, Chief Executive

become the customer’s favourite for food-on-the-go, our

journey is far from over. In October we held a Capital Markets

Day for shareholders and investors in which we set out our

ambitious plan to double sales over the next five years.

The fundamental strategic pillars of our business model

have not changed but we have identified four key growth

drivers which will become the focus of our plan to reach

our full potential in the years ahead.

Growing and developing the Greggs estate

In restarting our shop opening programme following the

initial impact of Covid, we set out a new ambition to reach at

least 3,000 shops as the next target against which to plan

supply chain capacity. Covid has led to a significant increase

in the availability of retail property, creating an opportunity

for Greggs to accelerate its shop opening programme. In

2021 Greggs opened 131 new shops and closed 28, growing

the estate to 2,181 shops. Our new shop pipeline is in good

shape and we have increased our annual shop opening

target to 150 net new shops, effective from the start

of 2022, to take advantage of these conditions.

The versatility of our brand allows us to operate a full range

of formats, and new digital channels enable us to extend the

reach of each location to more customers. We have good

representation in traditional towns and suburban locations

and are therefore continuing to focus our efforts on new

on-the-go locations where people work, travel and/or access

by car. Central London is one geographic region where lower

rents now allow entry for value-led brands, and we have a

strong pipeline in development. Openings in 2021 included

our first shops in Canary Wharf and Kings Cross Station,

together with several standalone ‘drive thru’ shops.

Franchise partners play an important role in providing

access to otherwise restricted locations. We currently have

375 franchise locations with 12 corporate partners, and

expect franchise shops to account for around 20% of our

estate in the years ahead. Our wholesale partnership with

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Annual Report and Accounts 2021Greggs plc

CHIEF EXECUTIVE'S REPORT CONTINUED

Iceland sits outside of our shop estate, but increases the

reach of our brand to compete in the at-home grocery

market where we have enjoyed strong sales growth,

with further scope for range development.

In 2022 we will also begin our next generation of shop refits,

which will see us create dedicated space for digital channels

and increased capabilities in food preparation in around

200 shops. We will also continue to improve the quality of

our estate through relocations, seeking larger, better

premises offering more channels and coffee shop

seating where appropriate.

Evening trade

In addition to new shops, we have a strategic opportunity to

extend the trading hours in many of our shops to compete for

food-on-the-go sales in the evening. Market research shows

that sales after 4pm accounted for 35% of food-to-go sales

in 2021, the largest proportion of the market by time of day.

Greggs shops typically close at around 6pm and therefore

we currently account for just 1% by value of this ‘dinner time’

market compared with nearly 8% of the lunchtime market

and 11% of the breakfast market (source: NPD/Crest 2021).

With 86% of demand in this dinner time market being

‘take out’ in nature, Greggs is well positioned to compete for

sales provided we can tailor our menu to meet customer

expectations at that time of day. Market research shows

that we are not starting from a zero base, with over 30%

of customers surveyed believing our existing menu has

options suited to the evening.

Initial trials in 100 shops show that by combining walk-in with

delivery sales, offering the existing menu, we can already

grow the evening daypart to an average of 17% of daily sales.

In 2022 we will extend late opening (with delivery service)

to a total of 500 shops, including our hot food menu trials

and supported with marketing activity.

Digital channels

We set out to develop digital channels to market in 2019,

which meant that when the pandemic hit in 2020 we were in

a position to rapidly accelerate our plans. During the year we

rolled out delivery with our partners Just Eat from 600 to

1,000 shops nationwide. While there is some small level of

switching between channels, delivery sales remained strong

and accretive when walk-in sales increased again, extending

the reach of our shops beyond just customers who are

passing by. Delivery offers the added attraction of serving

multiple customers in one order, with average basket sizes

at three times the walk-in levels.

We can reach more customers still by rolling out delivery

to more shops, increasing capacity and improving our

operational procedures to fulfil demand. In 2022 we plan to

roll out this service to a further 300 shops, resulting in 1,300

shops offering delivery by the end of the year. The increased

reach from delivery will also be key to accelerating our plans

for later opening. A significant proportion of market demand

for delivery comes post-5pm, and we estimate that the

combination of walk-in and delivery will make two-thirds

of our shops viable for late trading over time.

Beyond delivery, we believe digital channels open new

opportunities for Greggs to compete more effectively at all

times of day. As a daily sell-out fresh food business, Click +

Collect offers customers the ability to easily browse our

menu, guarantee availability, skip the queues and ultimately

personalise their order. In 2021, we integrated our Click +

Collect service with our new Greggs App, and 2022 will see

us begin to promote these services to our customers.

Greggs already offers a made-to-order service which is the

core of our breakfast sandwich offer. Digital channels will

allow us to extend this option to other categories. In 2022,

we will begin trials with pizza toppings before moving onto

baguettes. Made-to-order will extend product choice from

the existing ingredient list, encourage customers to trade

up, speed up service by removing payment at the till and has

the potential to reduce waste.

Making Greggs mean more to more people

We have successfully repositioned the Greggs brand in

recent years to become recognised as the customers’

favourite for food-on-the-go. Market research shows that

we operate in a growing market, but that we account for less

than 7% of customer visits (source: NPD/ Crest) and that

three-quarters of our App customers visit Greggs less than

once a week. Digital engagement with customers can help

us communicate how Greggs can mean more things to more

Annual Report and Accounts 2021Greggs plc

CHIEF EXECUTIVE’S REPORT CONTINUED

people, so that we can be a brand considered by more

people, more of the time, in more places and at all times

of day when they need food-on-the-go.

In 2021, we launched our new Greggs App offering a market-

leading reward scheme and integrating Click + Collect

services. Downloads of the new App are now in excess of one

million and digital engagement tools will be deployed at scale

in 2022 to drive visit frequency and average transaction

values. Existing customers will be encouraged to sign up to

the App and, in addition, we will partner with strategic brands

to grow our customer base.

Investing in our supply chain and systems

for a bigger business

Over recent years, Greggs has transformed its supply chain

and systems infrastructure to become a centralised food-on-

the-go business. By making better use of space and investing

in centralised automation we have delivered a step-change

improvement in the quality of our products and our supply

chain cost structure. This has created a template on which to

build additional capacity as the business continues to grow.

Our ambition to double sales revenues will require investment

in both our manufacturing and logistics capacity. In 2021 we

successfully opened our new automated frozen distribution

centre in Newcastle, completed the building extension work

at our Treforest bakery in Wales and increased capacity in our

savoury plant at Balliol Park in Newcastle. In addition, new SAP

systems were successfully rolled out to an additional six of our

manufacturing and distribution centres, with the final two

locations to be completed this year.

Work is now underway to confirm optimal locations for future

investment in capacity including considering a Southern-

based manufacturing centre and additional primary and

radial logistics capacity.

Building a centralised business model has required a

transformational investment in systems. Our multi-year

implementation of SAP is almost complete, and we have

accelerated our digital transformation programme. In 2021,

we increased capacity and resilience in our IT network and

migrated our business intelligence solution to Microsoft

Power BI. With this new platform in place, we see significant

opportunities to grow our digital capabilities and enable

more efficient operations, which will drive a programme

of continuous improvement as the business grows.

In 2021 we successfully implemented our new sandwich

labelling system to comply with Natasha’s Law, safeguarding

customers with allergies. This was a massive cross-functional

team effort deployed on time across all shops, despite major

supply chain and Covid disruption. It will now provide the

platform to develop our made-to-order services offering

product personalisation.

Coming back better – The Greggs Pledge

In addition to coming back stronger as a business, we were

determined that we should also come back better, so in

February 2021 we launched The Greggs Pledge. Ever since

John Gregg founded the business in 1939, we have always

tried to do the right thing by our people, customers, suppliers

and communities. These values are at the heart of our

culture and so it is natural that we want to conduct our

business in a responsible manner.

The Greggs Pledge commits us to ten things that we’re doing

to help make the world a better place by 2025 – and beyond.

We arrived at these pledges by talking with our own people

and our external stakeholders, and by considering the

issues that are most relevant to our business. Our pledges

align with the ambitions of the UN Sustainable Development

Goals (SDGs).

We have chosen to concentrate our efforts on the challenges

where we think we can make the most difference.

We want to help build stronger, healthier communities

Even before the pandemic ravaged our economy, far too

many people were struggling with poverty and hunger in this

country. The Greggs Breakfast Clubs feed around 44,000

children every school day and we will continue to grow the

“ Investing in our supply

chain and systems for

a bigger business.”

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Annual Report and Accounts 2021Greggs plc

scheme. We are also doing what we can to ensure that

perfectly good food isn't wasted, but instead gets to people

who need it. We recognise that poor nutrition is another

issue where we have a role to play and are doing more to

guide our customers towards healthier choices.

We want to make our planet safer

The impact of unchecked climate change would be

catastrophic. We want to make Greggs a carbon-neutral, zero-

waste business. We actively support the BRC’s Climate Action

Roadmap which aims to make the UK’s retail industry net zero,

well ahead of the Government’s 2050 target. In addition, we

are reducing our use of packaging, looking at how we can

apply ‘circular economy’ thinking to our business and working

with our suppliers to make efficient use of resources.

We want to be a better business

The corporate world can be a powerful force for good when it

is guided by a moral compass. As well as continuing to

support our communities by paying our taxes and providing

thousands of fairly-paid jobs, we are redoubling our efforts

to make Greggs a great place to work. We are also setting

high standards for what we purchase and encouraging our

suppliers to raise their game too.

We will give back to the communities that support us and

take less from the environment that we all rely on. We want

Greggs to play a meaningful role, not just in getting Britain

back on its feet, but in getting us to a better place. We made

good progress in 2021 achieving the majority of the targets

set out in our Pledge which are reported in detail in our

separate sustainability report.

Looking forward

As I approach retirement, this will be my final year as Chief

Executive of Greggs and it has been my privilege to have led

this business for the past eight years, setting us on a new

course to become the customers’ favourite for food-on-the-

go. In that time, I have tried my best to change the things

that needed changing but more importantly to protect

and nurture those things that shouldn’t change – most

importantly, the culture: the ‘what makes Greggs, Greggs’.

Every business needs to constantly evolve to stay relevant

for its customers and for that it needs the right strategic

plan, but that is only part of the story. The main risk in leading

a growing business is that change is poorly managed,

resulting in the organisation undermining its culture and

values that have taken decades to develop, earning the trust

of colleagues and customers alike. That is why I am delighted

that Roisin Currie has been appointed as my successor,

because in working alongside her for many years, I know that

she embodies our values and will continue to protect them as

she leads the business to meet the exciting growth

opportunities that lie ahead.

We have started 2022 well, helped by the easing of

restrictions. Against a very low base in 2021, when the UK

was in a more restrictive period of lockdown, company-

managed like-for-like sales in the first nine weeks of 2022

have grown by 44.2%. On a two-year basis, which we

reported throughout 2021, company-managed like-for-like

sales in the first nine weeks were 3.7% higher than the

equivalent period of 2020.

Cost pressures will be a particular feature of the year ahead,

with inflation impacting on raw materials, energy and people

costs, and these pressures are currently more significant

than our initial expectations. As ever, we will work to

mitigate the impact of this on customers, protecting Greggs'

reputation for exceptional value in the freshly-prepared

food-to-go market. Given this dynamic, we do not currently

expect material profit progression in the year ahead.

Despite these near-term pressures, we continue to believe

that the opportunities for Greggs have never been more

exciting. Our investment over recent years has left the

business well-placed to move quickly as the economy

recovers and we drive our ambitious plans to become a

larger, multi-channel business.

Roger Whiteside OBE

Chief Executive

8 March 2022

CHIEF EXECUTIVE’S REPORT CONTINUED

On a two-year basis, company-managed

like-for-like sales in the first nine weeks of 2022

3.7%

Annual Report and Accounts 2021Greggs plcGreggs plc

I am excited about pushing ahead with our strategic

plan, turning Greggs into a destination for every mealtime

by extending opening hours into the evening, and

maximising our use of digital technology to grow

our delivery business too.

Q&A WITH ROISIN CURRIE, CEO DESIGNATE

FOCUSING

ON THE

FUTURE

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Q&A WITH ROISIN CURRIE, CEO DESIGNATE CONTINUED

How long have you been with Greggs?

I joined in 2010 as Group People Director, then took on Retail

Operations as well. My last job title before becoming CEO

Designate was Retail and Property Director.

What did your most recent role involve?

The retail side of our business is all about making sure our

shops look fantastic and are delivering brilliant service. The

property side is about making sure we have bigger and better

sites to build new shops, and that we are refitting our existing

estate so that everything feels modern and on brand.

In my last role the two came together: there are strong links

between them, and our success and growth relies on getting

both spot on. These teams enable us to deliver our

accelerated growth plan – but in a way that never

undermines return on investment on a particular shop.

You have decades of experience on the people side

– how has that shaped your outlook?

I know that taking care of our people is the best way to take

care of our business: when they are free to be themselves,

they deliver amazing service. I know big businesses need

processes, but I want our ways of working to support our

people, not constrain them.

We all wear different badges and have different levels of

responsibility, but we are one team with a shared goal: to

make Greggs a success. Wherever they are working, I want

to help unlock our people’s capability so they can be the

best they can be.

Where were you before Greggs?

I joined Greggs from Asda. When I was a student at

Strathclyde University, I worked as a checkout supervisor

at my local branch a couple of nights a week. My manager

thought I showed potential and made me deputy manager.

I was working around my studies and it was unusual for

management to work part-time so it was a lucky break.

After I graduated, I joined their graduate scheme and spent

20 years there, working my way up to become their People

Director, first for the retail side, then for distribution.

What do you do outside work?

I’m a mum of three – a daughter and two sons – so outside of

work my life revolves around their interests and social life:

like all parents of teens, my husband and I spend a lot of time

ferrying them back and forth! I enjoy sport and do a lot of

cycling and running. In fact, my daughter and I started

running more seriously during lockdown. She was studying

for her GCSEs and I was working really hard so it was great to

Annual Report and Accounts 2021Greggs plc

Q&A WITH ROISIN CURRIE, CEO DESIGNATE CONTINUED

get outside together every day for a proper run – we did Red

January last year which meant running 5km every day. We

now run half marathons together and are looking forward

to the next Great North Run.

Where’s home?

We live in Harrogate but I’m Scottish and I try to get back to

Glasgow as often as possible – we have a flat there. Despite

having been raised down South, my children love their

Scottish roots – that’s who they shout for when the

rugby is on!

What’s been your proudest achievement at Greggs

to date?

Due to the Covid pandemic, the last two years have been like

nothing I have ever experienced before in retail. Adapting to

work under Covid-secure conditions brought out the best

in us as we fought to maintain our services in all parts of our

business, whether in our shops, supply chain or amongst our

colleagues who were working from home. Our shop teams

remained enthusiastic and committed as the Covid

guidelines evolved over time and ensured our customers

received the same warm welcome and tasty products they

know and love. The pandemic put great pressure on all

of our colleagues, but in true Greggs fashion, we stood

by each other and the communities that we serve.

Through the tireless work of colleagues and the Greggs

Foundation, we ensured supporting our local communities

stayed at the heart of our approach and we pulled out all

of the stops to help families struggling throughout the

pandemic. That, we can all be proud of.

Growing our delivery partnership with Just Eat, and at

such pace, is also something I am really proud of. From

initial trials in 2019, to rolling out to 600 shops when the

pandemic hit, to now over 1,000 shops nationwide, it’s an

exceptional example of cross-functional working, with a

number of teams across the business pulling together to

make it happen.

Tell us about a cause that is close to your heart?

Fresh Start, definitely. The first thing I was asked to do

when I arrived at Greggs was to help run a development

programme in a women’s prison. We wanted to see if

we could use our skills to help women back into work.

“ Greggs started out as a family business, and it

still feels like one – our people are at the heart of

what we do. As I take the baton from Roger, my

key remit is to protect and nurture the culture

and values that make Greggs, Greggs.”

Originally, we didn’t see a direct connection with Greggs but

after I’d met and talked to these women, I knew we could

help them more directly. So many of them lacked confidence

and had given up hope but I knew that, with support, they

could be a real asset to our business.

Children of female offenders often end up in care which is

a tragedy for whole families and communities. To turn their

lives around, these women need a stable home and a steady

job. We can’t help with the former, but we knew we could

help with the latter – and Fresh Start was born.

I often think about the first woman we placed. She was

released on temporary licence, so we had to collect her from

prison every day and drop her back at the end of her shift.

With support, she became a permanent Greggs employee

and was able to get her children back from social services.

The Fresh Start programme isn’t about numbers: it is about

making a real difference, one person at a time. I’m incredibly

passionate about it.

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Q&A WITH ROISIN CURRIE, CEO DESIGNATE CONTINUED

I now chair the leadership group of the Employers Forum

for Reducing Re-offending, a voluntary role working with

the Ministry for Justice and New Futures Network.

I encourage other businesses to see for themselves how

providing an opportunity can turn someone’s life around:

just meet these people and you will find out for yourself

that they can be fantastic employees. If we can break the

cycle of re-offending, we can change lives and improve

our communities.

Have you experienced barriers as a woman?

Throughout my career, I’ve been extremely fortunate to

work with bosses and colleagues – male and female – who

have been incredibly supportive. When I was on maternity

leave with my first child, I was invited to put my hat in the

ring for a director-level job that I’d always wanted but I said

no; I didn’t think I could balance being a new mum with a

promotion at work. My previous boss called me to help me to

see that, with the right support in place, I could do it. It was

a vote of confidence; a guiding hand at the small of my back;

a little nudge forward. It is something I now always try to

give good people around me – both men and women – who

need a little extra confidence to do brave things.

Did you need any encouragement to take on

the Chief Executive role?

Roger was hugely influential on my journey to this point

and has always encouraged me. He has been a mentor for

some time, and we had a long conversation before I agreed

to be considered for the job. He and our Finance Director,

Richard Hutton, encouraged me to apply for a scholarship

programme for women to attend the senior executive

programme at London Business School which is for people

with the potential to take on a bigger role, such as Chief

Executive. That helped me to mentally prepare for this

new role and how I would want to do it.

I feel very supported by the whole Operating Board – all my

colleagues are exceptionally bright, capable and passionate

people and it’s an honour to be invited to lead them on the

next stage of Greggs’ exciting journey.

What’s first on the ‘to do’ list as Greggs

Chief Executive?

Roger and I have a shared vision for Greggs’ future because

we’ve already been working on it together for years! It’s

making the handover process nice and smooth. I am excited

about pushing ahead with our strategic plan, turning Greggs

into a destination for every mealtime by extending opening

hours into the evening, and maximising our use of digital

technology to grow our delivery business too.

I feel lucky to have joined Greggs when I did back in 2010.

It is a huge privilege to lead a business with such strong

values. Greggs started out as a family business, and it

still feels like one – our people are at the heart of what

we do. As I take the baton from Roger, my key remit is to

protect and nurture the culture and values that make

Greggs, Greggs.

Annual Report and Accounts 2021Greggs plc

Our ambition is to reach at least 3,000 shops and we

have a strong pipeline of new shops opening. We also

have a significant opportunity to improve the quality

of our estate through relocations and the next

generation of shop refits.

OUR STRATEGY IN ACTION

GROWING

AND DEVELOPING

THE GREGGS

ESTATE

Annual Report and Accounts 2021

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Annual Report and Accounts 2021

Greggs plc

Greggs is a versatile brand. That means we can open a full

range of formats in a variety of locations, with our new digital

channels enabling us to extend the reach of each shop even

further, serving our customers wherever, whenever and

however they choose.

Our mission is simple – we want Greggs to be convenient and

wherever our customers need us. And by ensuring our shops

are the best they can be, our customers have a brilliant

experience when they visit us.

As well as opening new shops, we want our existing shops to

be bigger and better which means improving all of our shops

through our next generation of shop refits and moving some

shops to better locations.

New shop openings

When a customer is choosing where to shop for food-on-

the-go, we know that convenience is the key consideration.

We already have a strong presence in traditional towns and

suburban locations, so will continue to focus on increasing

our presence in locations where people travel, work and/or

access by car.

We opened 103 net new shops in 2021, growing the estate

to 2,181 shops. Covid has led to more premises becoming

available which, in turn, has seen rents fall, providing

Greggs with a significant opportunity to accelerate

its shop opening programme.

OUR STRATEGY IN ACTION CONTINUED

150

Target net shop openings per annum

103

New net shops opened in 2021

PLANS FOR 2022

We are accelerating our shop opening

programme and have a new annual shop

opening target of 150 net new shops,

comprised of 100 company-managed

shops and 50 franchised shops.

We will also focus on providing bigger and

better shops by targeting 50 relocations

and 250 refits.

We continued to grow our presence in Central London,

opening a number of new shops, including our first in

Canary Wharf, King’s Cross Station and Marylebone Station

– and we have a strong pipeline and exciting new locations

in development for 2022. We also opened six standalone

drive thru shops – the first being Bognor Regis in August.

Bigger and better shops through refits and relocations

In addition to opening new shops and growing our estate, we

are focusing on improving the quality of our existing shops

through the next generation of shop refits and relocations.

In 2021, we put the finishing touches to our newest design of

shop refits, maximising space and increasing our capabilities

in food preparation so we realise the potential of both our

delivery and Click + Collect digital channels. Roll out will

begin in 2022 with a target of 250 shops.

Based on this latest design we plan to move more shops to

larger, better premises, aiming to relocate up to 50 shops

per annum, allowing us to add more coffee shop seating

and deliver multi-channel growth.

Increasing customer reach through

our franchise and wholesale partners

We currently have 12 franchise partners and 375 franchise

locations. Our partners play an important role in providing

access to restricted locations such as motorway service

areas, petrol filling stations, educational establishments and

smaller high street convenience locations. In 2021, we were

proud to celebrate our 200th shop opening with longstanding

franchise partner Euro Garages at Shavington, Crewe. We

expect franchise shops to account for 20% of our estate in

the years ahead.

In 2021, our longstanding partnership with Iceland saw

record-breaking sales for a second year running, as many

more customers enjoyed their Greggs favourites at home.

We extended our product range in Iceland to include our

Vegan Sausage Roll, Vegan Steak Bake and exciting new

Pie range, which were well received and we continue to

explore range development.

Annual Report and Accounts 2021Greggs plc

OUR STRATEGY IN ACTION CONTINUED

We have a strategic opportunity to compete for

food-on-the-go sales in the evening and are extending

the trading hours in many of our shops, adding new

and exciting items to our menu and leveraging all

of our customer channels.

EVENING

TRADE

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021

OUR STRATEGY IN ACTION CONTINUED

The opportunity

Greggs has 16.5% of the breakfast market and nearly 10% of

the lunchtime market but just 1% of the dinner time market

(source: NPD/Crest ). Market research shows that 35% of

food-to-go sales occur after 4pm so, by closing most shops

at 6pm, we are missing out on that potential revenue.

We therefore have a strategic opportunity to extend the

trading hours in more of our shops in order to compete

for food-on-the-go sales in the evening.

Extending opening hours

Initial trials were based on offering the existing menu and

were well received. But we believe by tailoring our menu

to meet customer expectations at that time of day, the

opportunity will be even greater.

8.5m

Just Eat delivery orders fulfilled

500

Late opening shops in the year ahead

Our partnership with Just Eat

We launched our partnership with Just Eat in 2020 and,

since then, have rolled it out to over 1,000 shops nationwide.

In 2021, we served over 2.17 million customers and fulfilled

8.5 million delivery orders.

Offering home delivery is key to accelerating our plans for

extended opening hours and we have big plans to further

expand delivery in the coming year, adding more locations

and more menu choices to strengthen our proposition at

every meal occasion.

Menu development

Market research shows us that over 30% of customers

surveyed believe that our existing menu has options suited

to the evening – so we are not starting from a zero base.

Popular items include Chicken Goujons and Bites and Pizza

Sharing Boxes alongside our single slice and meal deal

offers. Our customers also use delivery for sweet treats

and doughnuts which have sold well. We have a number of

menu trials underway to help us provide more of what our

customers want at this time of the day.

PLANS FOR 2022

Where possible, we will extend all shop

openings to 6pm, with 500 of our shops open

until 8pm offering delivery and hot food menu

trials. This will be supported with regional

marketing activity.

Greggs plc

Annual Report and Accounts 2021Greggs plc

Through our digital channels, we have the

strategic opportunity to compete more

effectively at all times of day. Our delivery

partnership enables us to increase the reach

of our shops beyond customers passing by,

and Click + Collect offers our customers

the ability to easily browse our menu, skip

the queues and ultimately personalise

their order.

OUR STRATEGY IN ACTION CONTINUED

DIGITAL

CHANNELS

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OUR STRATEGY IN ACTION CONTINUED

When the pandemic hit in 2020, we rapidly accelerated our

multi-channel development strategy to take Greggs to our

customers. Digital channels offer the key opportunity for

Greggs to increase market share by increasing multi-channel

reach, customer loyalty and menu choice.

Rolling out delivery to more shops

We launched our partnership with Just Eat in June 2020 and

delivery already accounts for more than 7% of sales – a huge

achievement in such a short period of time. Delivery offers

the added attraction of serving multiple customers in one

order, with average basket size three times that of a typical

walk-in purchase.

We are looking to embrace the opportunity to reach even

more customers by rolling out delivery to more shops,

increasing capacity and improving our operational

procedures to fulfil demand.

1,300

Shops partnered with Just Eat

by end of 2022

Click + Collect

Using Click + Collect, customers can easily browse our menu,

skip the queues and personalise their order. In 2021, we

integrated our Click + Collect service with our new Greggs

App and have worked hard to build the capability that allows

customers to earn and redeem rewards for these purchases

as well. Another key feature is the ability to access more

information about each menu item which now includes

improved nutritional and allergen information to help

everyone to make informed choices.

Made-to-order

Our breakfast sandwich range offers customers the ability

to customise their sandwich and have it made-to-order.

This has proved hugely popular, and our digital channels

are enabling us to do this for other product categories too,

extending choice from our existing ingredient list. Click +

Collect is also encouraging customers to trade up, speeding

up service by removing payment at the till, and, by making

to order, has the potential to reduce waste too.

PLANS FOR 2022

With a growing delivery market, we will

extend our delivery partnership with Just Eat

to 1,300 shops, helping us to fully maximise

the evening trade opportunity. Product

development, in particular hot food options

across all mealtimes, will ensure we continue

to provide what our customers want, no matter

what time of the day they choose to shop with

us. We will also further develop our ‘made-to-

order’ range to enable customers to personalise

their orders, starting with pizza toppings,

then moving on to baguettes.

Annual Report and Accounts 2021Greggs plc

We have successfully repositioned the Greggs brand in

recent years to become recognised as a customers’ favourite

for food-on-the-go. Through timely and effective customer

communication via our new Greggs App, website and CRM

system, we have a strategic opportunity to effectively

communicate how Greggs can be a brand considered

by more people, in more places and at all times of day

when they need food-on-the-go.

OUR STRATEGY IN ACTION CONTINUED

MAKING GREGGS

MEAN MORE TO

MORE PEOPLE

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021

Greggs plc

OUR STRATEGY IN ACTION CONTINUED

As a brand we’ve never had so much to talk about – whether

that’s our latest products, the new evening menu, exciting

new shop formats and locations, delivery, the Greggs App,

our latest brand partnership or The Greggs Pledge. The

development of our Customer Relationship Management

(CRM) capabilities is allowing us to talk to customers in a

more personal and targeted way than ever before.

We are encouraging more customers to visit us more often,

and experience the wide choice of menu that we offer

throughout the day, every day. Targeted communications

will help us to ensure that the Greggs brand – and all we have

to offer – is front of mind for food-on-the-go customers across

the UK. The more reasons we can provide for them to consider

us, the more likely we are to be their next brand of choice.

Developing the Greggs App and website

To ensure that we can continue to develop and enhance our

digital propositions, we developed the Next Generation

Greggs workstream, with a focus on bringing all of our digital

and data capabilities in-house. This means we now design,

build and run all of our digital products ourselves, and are

continually learning and improving how we meet our

customers’ ever-changing needs and expectations as

technology develops.

Our first step in 2021, was to launch our new Greggs website,

for the first time building and managing greggs.co.uk using

internal resources rather than relying on external partners.

We successfully launched the new look website in line with

our latest brand standards, all built on a much more secure

and flexible content management system. Since launch,

we’ve introduced many new features, such as our news

section, Flake News, and dedicated campaign pages to

support various marketing initiatives, providing a destination

for customers to click to access more information.

Later in the year, we launched our new Greggs App continuing

our journey of owning and managing our own digital products.

Most of our existing users switched over to the new App and

are now enjoying a new experience, where they can earn

stamps and redeem rewards on our products. They can also

find out about the different services available in each of our

shops, and use the improved nutritional and allergen

information to make better informed choices.

Keeping in touch with our customers via CRM

CRM has a huge role to play in successfully delivering our

five-year plan. In essence, it allows us to talk to our

customers, and prospective new customers, on a regular

one-to-one basis, whether that be via email, SMS or the

Greggs App. In turn, the information we get back can help

inform and shape our strategies so we can serve our

customers even better.

How other brands use Greggs to reward

their customers and employees

Our business to business (B2B) sales channel is now three

years old and has gone from strength to strength, growing

into a high volume offering that allows us to work with lots

of other brands. Our business customers typically offer

our products as a reward or gift for their employees or

customers, through buying gift cards, e-gifts or product

codes in bulk.

These partnerships allow us to drive awareness of the

Greggs brand with different audiences and encourage

more people to visit our shops and enjoy our products.

PLANS FOR 2022

We have an exciting roadmap for 2022 to

improve all our websites, including making

it easier to use our gift cards and further

developing our Greggs App. We’re working on

ensuring our B2B proposition is even more

appealing, so that we can attract even more

partners to Greggs as a way for them to gift our

products to their customers or employees.

We will continue to develop our new CRM

capabilities, allowing our teams to talk with our

customers like never before and continue our

journey to offer additional and personalised

services and offers across multiple channels.

Annual Report and Accounts 2021Greggs plc

OUR STRATEGY IN ACTION CONTINUED

INVESTING IN OUR

SUPPLY CHAIN

AND SYSTEMS

FOR A BIGGER

BUSINESS

Over recent years, we have transformed our supply chain and systems

infrastructure to create a centralised food-on-the-go business model.

Our ambition to double sales revenues will require significant investment

in manufacturing and logistics to increase capacity.

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021

OUR STRATEGY IN ACTION CONTINUED

In recent years, our supply chain and systems infrastructure

have undergone significant and essential transformation.

We’ve made better use of space and invested heavily in

centralised automation, delivering a step-change

improvement in the quality of our products and our supply

chain cost structure. This has also allowed us to create a

template on which we can build additional capacity and

continue to grow as a business to fulfil our ambition to

double sales revenues.

2021 was a year of big achievements and major milestones:

we opened the doors to our new automated frozen

distribution centre at Balliol Park in Newcastle, approached

the end of our SAP systems roll out and our teams worked

tirelessly to prepare for Natasha’s Law.

New frozen distribution centre

We successfully opened our new automated frozen

distribution centre at Balliol Park in Newcastle, an investment

of £26 million. The new facility has capacity for 14,000 pallets,

allowing us to consolidate our manufactured frozen products

into a single point of storage and distribution, leveraging cost

and efficiency savings, as well as providing much-needed

capacity for growth for many years to come. Bringing storage

in house and all under one roof has had a hugely positive

impact in reducing the annual carbon footprint of this

operation. Attending the official opening on 21 September,

Ian Durant commented:

“This is not only an important development

for the Balliol site but also for Greggs as a

business. By bringing together the majority

of our frozen storage under one roof, this

facility will not only improve efficiency, but

will also have a hugely positive impact on

reducing our carbon footprint – a key focus

for us as outlined in The Greggs Pledge.

“To have built a facility of this scale and

complexity at any time would have been an

achievement, but to have built it during a

global pandemic makes the achievement

all the more remarkable!”

Completion of our major process and systems

investment programme

We nearly completed our multi-year implementation of

SAP with the roll out of our supply chain solutions, further

accelerating our digital transformation programme. We

also increased capacity and resilience in our IT network and

migrated our business intelligence to Microsoft Power BI.

With this new platform in place, we see significant

opportunities to grow our digital capabilities and enable

more efficient operations, which will see a programme of

continuous improvement as the business grows.

Natasha’s Law

We successfully implemented our new sandwich labelling

system to comply with Natasha’s Law, safeguarding

customers with allergies. Our customers are at the very heart

of our business, and we were fully supportive of the proposed

change in legislation from the very first consultation,

believing strongly that the availability of information and the

safety of our customers is paramount. We want to ensure

that all customers have accurate allergen information

available, so they can make an informed and safe decision

when shopping with us.

Our colleagues have done an incredible job of getting us

ready for Natasha’s Law. It has been an exceptional example

of cross-functional working across the business, all with a

shared vision and common goal of keeping our customers

safe. While the pandemic created a unique set of challenges,

our focus on allergens and preparing for ‘prepacked for

direct sale’ changes remained a key business priority.

The new system will also provide the platform on which

we will go on to develop our made-to-order services

offering product personalisation.

PLANS FOR 2022

2022 will be another big year for our supply chain

as we invest in further increasing capacity and

productivity by introducing additional production

lines at our Balliol and Enfield sites, and enhanced

logistics to support product distribution in the South.

Digital will continue to be a key focus for our

teams in 2022, with exciting plans to transform

our existing till platform, recruitment and

colleague engagement systems and the

introduction of a new Information Security

Management System to manage cyber risk.

Greggs plc

Annual Report and Accounts 2021Greggs plc

2017 7.4%

2018 7.2%

2019 13.5%

2020-30.5%

2021 51.7%

2017 3.7%

2018 2.9%

2019 9.2%

2020-36.2

2021 52.4%

£71.9

2017 £81.8

£82.6

2018 £89.8

£108.3

2019 £114.2

-13.7

2020 -13.7

£145.6

2021 £145.6

55.7p

2017 63.5p

64.5p

2018 70.3p

85.0p

2019 89.7p

-12.9p

2020-12.9p

114.3p

2021 114.3p

We use eight key financial performance indicators to monitor the performance of

the Group against our strategy. The definition of these KPIs and our performance

over the last five years is detailed below. The profit, cashflow and ROCE KPIs have

been amended during 2019 to take account of the impact of IFRS 16.

KEY PERFORMANCE INDICATORS

What this means

The percentage year-on-year change

in total sales for the Group.

Why this is important

This is a measure of the absolute growth

of the Company.

What this means

Compares year-on-year cash sales in our

company-managed shops, excluding any

shops which opened, relocated or closed

in the current or prior year. Like-for-like

sales growth includes selling price inflation

and excludes VAT. The impact of shop

refurbishment is included in like-for-like

sales growth. The calculation of these

figures can be found on page 169.

Why this is important

This measure provides valuable additional

information on the underlying sales

performance of the business and is

a key measure used internally.

What this means

Reflects the performance of the Group

before taxation impacts and the underlying

measure excludes any exceptional items

arising in the year.

Why this is important

This is a measure of the absolute

performance of the Group.

What this means

Calculated by dividing profit attributable

to shareholders by the average number of

dilutive outstanding shares. The underlying

measure excludes any exceptional items

arising in the year.

Why this is important

This measure reflects the underlying

earnings for each share in the Company.

Total sales growth

51.7%

Profit before tax (PBT)

£145.6m

Like-for-like sales growth

52.4%

Diluted earnings per share (pence)

114.3p

Underlying

Including exceptional items

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021Greggs plc

2017 £116.9

2018 £136.2

2019 £169.5

2020 £1.5

2021 £236.5

23.7%

2017 26.9%

25.2%

2018 27.4%

19.0%

2019 20.0%

-2.4

2020 -2.4%

-2.4%

23.0%

2021 23.0%

2017 £70.4

2018 £73.0

2019 £86.0

2020 £61.6

2021 £54.3

2017 £54.5

2018 £88.2

2019 £91.3

2020 £106.8

2021 £268.6

Results for 2020 were significantly impacted by the closure of the Greggs shop estate for most of the second quarter as a result of

the Covid pandemic. All of the non-GAAP measures (other than like-for-like sales growth) detailed can be calculated from the GAAP

measures included in the annual accounts. All of the underlying measures exclude the exceptional items detailed in Note 4 to the

accounts. Commentary on these KPIs is contained within the financial review:

KEY PERFORMANCE INDICATORS CONTINUED

What this means

Operating profit adjusted for the impact

of non-cash items, working capital

movements and repayment of the principal

on lease liabilities. The calculation of these

figures can be found on page 170.

Why this is important

This represents cash flows that could be

used for distribution of dividends or to

fund our strategic objectives and is

reflective of the strong cash-generative

nature of the business.

What this means

Calculated by dividing profit before tax by

the average total assets less current

liabilities for the year. The underlying

measure excludes any exceptional items

arising in the year. The calculation of these

figures can be found on page 169. As the

ROCE figure is significantly impacted by the

implementation of IFRS 16 an additional

notional figure has been calculated to

highlight the impact – the calculation of

these figures can be found on pages 169

and 170.

Why this is important

This is a measure of the return generated on

capital invested by the Group and provides a

guide to how efficiently we are generating

profit with the assets used in the business.

What this means

The total amount incurred in the year

on investment in fixed assets.

Why this is important

This reflects the ongoing investment

in the business over time.

What this means

This is calculated as cash and cash

equivalents plus undrawn committed

facilities, taking into account required

minimum liquidity covenants.

Why this is important

This measure provides useful information

on the Group's net financial position.

Net cash inflow from operating activities

after lease payments (£m)

£236.5m

Capital expenditure (£m)

£54.3m

Return on capital employed (ROCE)

23.0%

Liquidity (£m)

£268.6m

Underlying

Including exceptional items

Annual Report and Accounts 2021Greggs plc

SUSTAINABILITY REPORT

In February 2021 we launched The Greggs

Pledge which declared ten things that we

are doing to help make the world a better

place by 2025, and beyond.

We have always been committed to doing the right thing, but

we wanted to be more specific about how we channel our

efforts and resources into doing good. We reflected on what

we could do to have the most positive impact on the world

around us, and have chosen to dedicate our efforts to three

areas: communities, the planet and our approach to

business. We have set ourselves ten stretching targets to

be achieved by 2025. Each of our pledges aligns with at least

one of the UN Sustainable Development Goals (SDGs).

Stronger, healthier communities

We pledge to play our part in improving the nation’s

diet by helping to tackle obesity, providing free

breakfasts to schoolchildren, and giving surplus

food to those most in need.

1. Growing Greggs Breakfast Clubs: By 2025, we will

support 1,000 school Breakfast Clubs providing some

70,000 meals each school day.

2. Putting an end to food waste: By 2025, we will create

25% less food waste than in 2018 and will continue to

work towards 100% of surplus food going to those most

in need.

3. Supporting our communities: By 2025, we will have

50 Greggs Outlet shops providing affordable food in areas

of social deprivation, with a share of profits

given to local community organisations.

4. Helping our customers to make healthier choices:

By 2025, 30% of the items on our shelves will

be healthier choices, and we will attract customers

through education and promotions.

Safer planet

We pledge to become a carbon-neutral,

zero-waste business.

5. Going carbon neutral: By 2025, we will be on our way

to achieving carbon neutrality by using 100% renewable

energy across all of our operations.

6. Building the shops of the future: By 2025, 25% of our

shops will feature elements from our Eco-Shop ‘shop

of the future’ design.

7. Using less packaging: By 2025, we will use 25% less

packaging, by weight, than in 2019 and any remaining

packaging will be made from material that is

widely recycled.

Better business

We pledge to increase the diversity of our workforce,

and to use our purchasing power responsibly, with the

aim of making things better in our supply chain.

8. Embracing diversity: By 2025, our workforce will reflect

the communities we serve.

9. Sourcing sustainably: By 2025, we will have a robust,

responsible sourcing strategy in place and will report

annually on progress towards our targets.

10. Protecting animal welfare: By 2025, we will secure and

maintain Tier 1 in the BBFAW Animal Welfare standard.

THE GREGGS PLEDGE

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021Greggs plc

SUSTAINABILITY REPORT CONTINUED

Our progress so far

IN 2021…

686 Greggs Breakfast Clubs fed

more than 44,500 children every

school day.

We re-distributed 28% of all unsold

food in our shops and reduced

manufacturing waste by 31%

(as a % of sales).

We have 20 Greggs Outlet shops up

and running – with a further ten in

the pipeline for 2022.*

32% of the items on our shelves are

healthier choices.

We’ve assessed the carbon

footprint of our whole value chain.

We've created the Eco-Shop

template.

We’ve joined the On Pack Recycling

Label (OPRL) scheme to make

recycling communications easier

to understand.

500 managers attended an

Inclusive Leadership workshop.

We completed our review of soy

across all our ingredients, joined

the UK Roundtable on Sustainable

Soya, and signed up to the

UK Soy Manifesto.**

We’ve created a roadmap to

achieve a Tier 1 rating in the

Business Benchmark on Farm

Animal Welfare.

PLANS FOR 2022

Increase Greggs Breakfast Clubs

to 760.

Further 10% reduction

in manufacturing waste and

increase food redistribution

by a further 10%.

Expand our Outlet estate

to 30 shops.

30% of all the new products we

create to be ‘Healthier Choices'.

Complete our Supplier

Engagement Plan and publish our

science-based targets.

We will open our first Eco-Shop in

2022 and a further 250 shops to

have Eco-Shop elements.

Include OPRL label on all own brand

packaging and build roadmap

to move all own brand into

‘recyclable criteria'.

Achieve National Equality

Standard Assessment.

Publish our Deforestation Policy,

map supplier compliance and plan

to be deforestation free by 2025.

Ensure chicken stocking densities

are a maximum of 38kg/m

How did we do?

Achieved Partially achieved Still to be achieved

* we've increased our Outlet shop numbers from 13 to 20 in 2021. Although this means we missed our target of 30, we’re still proud of the progress we have made

** we wanted our direct purchases of soy to be ‘Identity Preserved’ (meaning that we can trace back to the origin, e.g. the farm or field, and can then make a valid claim that its from a sustainable source and not related to deforestation) by the end

of 2021 but didn’t achieve that. However, we did complete our review of soy across all our ingredients, joined the UK Roundtable on Sustainable Soya (RTSS), and signed up to the UK Soy Manifesto

Annual Report and Accounts 2021Greggs plc

SUSTAINABILITY REPORT CONTINUED

TASK FORCE

ON CLIMATE-RELATED

FINANCIAL DISCLOSURES

As a responsible organisation, we understand the

importance of reducing our impact on the climate.

We also believe that improved governance and

reporting across all industries and sectors will

support carbon reductions across society, so

we welcome the introduction of the Task Force

on Climate-related Financial Disclosures

recommendations and recommended disclosures.

The Task Force on Climate-related Financial Disclosures

(TCFD) and other climate-related disclosures made in this

TCFD report form part of the Company’s annual report and

accounts for the 52 weeks ended 1 January 2022 and are

consistent with the TCFD recommendations and

recommended disclosures.

Climate change and carbon is a complex subject, and we

look to further develop and refine our reporting in future

years. In the following pages of this, our first TCFD report,

we have included an overview of our activity to date and our

plans and expectations for the future, as required under

Listing Rule 9.8.6 (8)R.

Our ambitions

During 2021, we launched our first sustainability plan,

The Greggs Pledge. In it, we committed to making Greggs

a carbon neutral business by 2040 and to actively support

the British Retail Consortium’s Climate Action Roadmap.

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021Greggs plc

SUSTAINABILITY REPORT CONTINUED

In line with this Roadmap, we aim to achieve net zero across our

own operations (Scope 1 and 2) by 2035 and across our value

chain (Scope 3) by 2040.

Metrics and targets

As part of our strategy to manage climate change risks,

we have committed to becoming a net zero carbon business

by 2040 in line with the BRC’s Climate Roadmap:

• Scope 2: Net zero by 2030

• Scope 1: Net zero by 2035

• Scope 3: Net zero by 2040

We report on our Scope 1 and 2 greenhouse gas emissions

each year. The detailed disclosures and methodology can

be found in the following pages.

We are currently working with the Carbon Trust on

developing and gaining approval for our science-based

carbon targets, aligned with a 1.5OC scenario. The

methodology for modelling our emissions is developed

in line with the Greenhouse Gas Protocol. The baseline year

chosen is 2019, as it is the most recent year with complete

and verifiable data.

During 2021, we worked with the Carbon Trust to model our

Scope 3 emissions which revealed that these account for

over 90% of our overall footprint. Collaborating with those

outside our operations is paramount to achieving our net

zero goals. In 2022, we will engage with our value chain to

align longer-term climate change ambitions and plan to

introduce additional supplier-related metrics into our

reporting, beginning with the 2022 annual report.

Governance

Our Board has overall responsibility for overseeing climate-

related risks and opportunities meaning that our approach

to climate change is governed at the highest level within our

organisation. We expect to see this as a topic of increasing

focus in the future.

The Board delegate elements of its responsibility to the

following committees, management groups and individuals:

– The Audit Committee is responsible for reviewing and

approving our TCFD disclosures annually.

– The Remuneration Committee is responsible for

determining remuneration policy and how climate-related

factors are considered when determining incentive

packages on an annual basis.

– The Operating Board is responsible for the delivery of our

sustainability and climate change strategy, as led by the

Chief Executive. This includes ensuring our strategy is

aligned with our purpose, vision, values and culture on at

least a quarterly basis. Additional engagement is included

where required, for example, to review new opportunities,

as proposed by the Head of Sustainability.

– The Company Secretary and General Counsel has

responsibility for overseeing the implementation of the

sustainability strategy and our climate change agenda

including reporting into the Main Board on at least a

quarterly basis. Additional reporting is included

where required.

– The Head of Sustainability is responsible for proposing

options for the direction and strategy of all sustainability

issues. In addition, the role is responsible for assessing

and reporting on climate change risks and reporting this

into the Company Secretary and General Counsel for

further review by the Main Board and Operating Board.

The Head of Sustainability also reports formally to the

Operating Board, on progress against agreed targets and

commitments, on a quarterly basis.

– Dedicated Sustainability Working Groups were created to

support delivery of our sustainability targets, namely

The Greggs Pledge and net zero. These cross-functional

working groups provide operational leadership in the

delivery of our sustainability and climate change targets

and commitments.

– Where appropriate, management have personal

objectives aligned to the net zero and The Greggs Pledge

annual plan. Performance against these objectives is

reported to the Head of Sustainability on at least a

quarterly basis.

The Board has received specific briefings and updates

on progress during the year on climate change matters,

including the results from our Scope 3 modelling, the

developments of our science-based targets and our

short-term net zero targets and actions.

Strategy

Climate change and its associated risks and opportunities

has long been important to us and our stakeholders.

Although we have not previously completed formal scenario

analysis, taking action to address the effect of material

climate change impacts is embedded into our business.

Publication of The Greggs Pledge in 2021 is evidence of this.

As part of our Scope 3 analysis work in 2021, we have

developed our approach to scenario analysis and will use

this in 2022 to further inform our risk management approach

relating to physical and transitional climate risk. We will

provide an update on this in our 2022 TCFD report.

We continue to develop our understanding of our exposure

to climate-related risk, which falls into two categories –

physical and transitional.

Annual Report and Accounts 2021Greggs plc

SUSTAINABILITY REPORT CONTINUED

Transition risk Physical risk

DEFINITION

Risks related to changes in the social and

economic landscape that are likely to occur as

a result of transition to a low carbon economy:

– Policy

– Market

– Technology

– Reputation

Risks related to the physical impact of climate change:

– Acute – Extreme weather events, e.g. heatwaves, droughts, extreme rainfall and flooding

– Chronic – Longer-term climate shifts, sustained higher temperatures, rises in sea level,

changes to average rainfall, changes to weather patterns

POTENTIAL

IMPACTS

Depending on the speed of transition, varying

levels of risk will exist:

– Increased costs as a result of policy change

– Reduced revenues/turnover as a result of

changes in customer preferences

– Ability to transition to technology changes

at an asset level and associated costs of

doing so

– Reputational impact if deemed to be slow to

transition

– Direct impacts preventing operations (e.g. storm damage, flooding, risks to health and safety)

– Indirect impacts impacting supply chain

TIMING

– Timing of transition is uncertain and is

largely dependent on external factors

– Current expectations are that transition

risks will manifest themselves in more

detail in the short to medium term

– Acute risks are already occurring, as evidenced by the flooding of our Treforest site in 2020

– Chronic risks are expected to become more material in the longer term and will be affected

by global efforts to reduce temperature increases in line with climate science

INITIAL

MITIGATIONS

– Continuing to develop our vegan range

– Ongoing review of low carbon technology

for current operations (Balliol National

Distribution Centre development, move

to hybrid car fleet)

– Insurer survey of sites that are at greater risk of flooding

– Flood protection measures implemented at our Treforest site

– Climate risk assessment for new sites

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021Greggs plc

SUSTAINABILITY REPORT CONTINUED

Transition risk Physical risk

2022 ACTIVITY

– Ongoing review of technology opportunities

for Scope 1 emission reduction (e.g. low

carbon logistics fleet, low carbon van fleet)

– Wider communication of our approach to

climate change to all stakeholders

– Scenario modelling to more clearly inform

future strategy and risk mitigation

– Publication of science-based targets and

identification/implementation of actions

required to achieve milestones

– Further analysis of risks related to acute and chronic climate events. This will then inform

the development of more detailed climate change related risks in our risk process

Through our approach to governance, we continue to identify

and quantify climate risks and look to build mitigation of

these risks into future planning. This includes climate

consideration in our investment and longer-term strategic

direction and financial planning. As an example of this, our

Balliol National Distribution Centre frozen storage facility

investment included a requirement to consider carbon

emissions, and this has resulted in a reduction in

comparative emissions (against previous operational

emissions) of over 30%.

The introduction of our new vegan products is helping to

bring new customers into Greggs as well as providing options

for existing customers who want to reduce meat in their diet.

In 2022 we are investigating the use of product eco-labelling

to establish if this will support customer shift to lower

carbon products.

Risk management

We have an established risk process as described in the risk

management section on pages 59 to 63. The process for

identifying, assessing and managing climate-related risks

is part of this process. We do not treat our climate risks any

differently to others, assessing them in line with our

Enterprise Risk Framework.

However, climate is a longer-term risk whereas our principal

risks are generally focused on the short to medium term.

Whilst undesirable, we do not believe that a single event

would have a significant adverse impact on the business

at the present time (as an example, the actions taken to

mitigate operational impact resulting from the flooding of

our Treforest site in 2020 demonstrate how our business

continuity approach supports mitigation of climate risk).

We consider climate change to be an emerging risk area

for the business, and we continue to assess and review

developments to ensure we would include it as a principal

risk when apparent. As we further embed our enterprise

risk approach across the business, we will establish wider

involvement in – and visibility of – our climate-related risks.

Climate-related risk is discussed in our Risk Committee and

is now included as a standing agenda item.

Our plans for 2022 include considering our resilience under

various climate change scenarios (a 4

C rise, a 2

C rise and

a 1.5

C rise in global temperatures by 2050). Climate risk

considerations will be built into our strategy setting and

financial planning processes and we will provide an update

in the 2022 TCFD report.

Annual Report and Accounts 2021Greggs plc

SUSTAINABILITY REPORT CONTINUED

Our carbon

footprint

We, like others, recognise the urgency needed

to address climate change. We continue to

hold the Carbon Trust Standard in recognition

of our work on carbon efficiencies and our

Environmental Management System is

certificated to ISO 14001:2015.

In addition, we disclose our GHG emissions through the Carbon

Disclosure Project (CDP). We continue to drive efficiencies to

further reduce our carbon footprint in a bid to target a net zero

impact. In 2021, we decreased our gross location-based

intensity (tonnes per £m turnover) impact by 19.71%

(compared to 2020 or 18.57% compared to 2019).

As a result, our market-based carbon footprint for the 2021

financial year was 40,230 tonnes of carbon dioxide and

equivalent gases (CO

e), with an intensity of 32.9 tonnes

of CO

e per £m turnover, which accounts for our efforts

in generating and purchasing low-carbon energy.

2021 reduction in gross location-based

intensity impact (tonnes per £m turnover)

19.71%

Global GHG emissions data

In line with Companies Act 2006 (Strategic Report and

Directors Report) Regulations 2013, we are reporting our

greenhouse gas (GHG) emissions as part of our annual

strategic report. Our GHG reporting year is the same as our

financial year from 3 January 2021 to 1 January 2022. We

have reported on all of the emission sources which we deem

ourselves to be responsible for, as required under the Act.

These sources fall within our operational control and

financial boundaries and include emissions from

manufacturing, retail and distribution sites and the operation

of our distribution fleet, all of which are wholly based in the

UK. We do not have responsibility for any emission sources

that are outside of our operational control. The methodology

used to calculate our emissions is based on the GHG Protocol

Corporate Accounting and Reporting Standard, Defra

Environmental Reporting Guidelines and ISO 14064-3:

2019 – Specification with guidance for the verification

and validation of GHG statements.

Dual emissions reporting

Overall emissions have been presented to reflect both

location and market-based methodologies, affecting both

Scope 1 and Scope 2 emissions.

Streamlined Energy and Carbon Reporting

In line with Streamlined Energy and Carbon Reporting (SECR)

requirements, we have also reported on the underlying

energy used to calculate Group GHG emissions.

Where original data was provided in litres of diesel, gas oil or

petrol it has been converted to kWh. The reporting boundary

has been determined by operational control, whereby all

emissions within operational control have been included

within scope, i.e. Scope 1 and Scope 2.

Energy efficiency initiatives

Greggs is committed to reducing the energy consumption

and the carbon impact from its operations. We have set our

target of net zero operational carbon emissions across the

organisation by 2040 and have put in place a plan aligned to

the BRC’s Climate Roadmap. We have moved to renewable

electricity sources across 96% of our estate and will look to

investigate other renewable energy sources for our

remaining Scope 1 emissions.

In 2021 we measured our value chain emissions with Carbon

Trust and found Scope 3 emissions account for 92% of all

market-based emissions with emissions from Scope 3

purchased goods and services (products) being the biggest

impact. We will look to develop and focus our attention on

where we have significant impact. We have developed a

science-based target across Scopes 1,2 and 3 against a

2019 baseline and will have these targets approved by the

Science-Based Target Initiative in 2022. We’ve carried out

numerous energy efficiency initiatives across the Greggs

estate. These include:

– Continuing with our LED lighting replacement

programmes.

– Investing in energy efficient equipment.

– Completing our £26 million investment in a new cold store

facility in Newcastle, which is now operational and brings

third-party storage in-house (read more on page 51).

– Purchasing a double decker vehicle which has a 50%

greater carrying capacity and a subsequent reduction

in kilometres travelled. We have plans to purchase a

further nine double decker trailers in 2022.

– Replacing high Global Warming Potential (GWP)

refrigerants in refrigeration and air conditioning systems

with lower GWP refrigerants.

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021

Greggs plc

SUSTAINABILITY REPORT CONTINUED

Current reporting

year 2021

(tonnes of CO

Comparison

year 2020

(tonnes of CO

Base year (2019)

(tonnes of CO

Location & market-based emissions

Scope 1

Combustion of fuel & operation of facilities 30,115 23,112 33,155

Scope 1 Refrigerants 5,850 4,541 5,513

Scope 2 (Location-based)

Electricity purchased for own use (inc PV Generated & green tariff) 46,318 39,860 57,294

Scope 2 (Market-based) Residual electricity 4,265 2,469 2,909

Gross emissions (Location-based) Total Scope 1+2 CO

e emissions 82,283 67,513 95,962

Gross emissions (Market-based) Total Scope 1+2 CO

e emissions to account for use of renewable energy 40,230 30,122 41,577

Intensity measure (Location-based) Tonnes of CO

per £m turnover 67.21 83.71 82.54

Percentage change 2021 compared with 2020 -19.71% -18.57

Intensity measure (Market-based) Tonnes of CO

e per £m turnover 32.90 37.35 35.76

Intensity percentage change accounting for renewable energy 2021 compared with 2020 -11.92% 8.00%

Location-based method is provided for disclosure only

UK Underlying energy use (kWh)

Total Scope 1 Energy use Combustion of fuel & operation of facilities (Natural gas, fleet fuel oils, company cars & LPG) 130,910,991 98,224,487 141,717,583

Total Scope 2 Energy use Electricity 218,141,798 170,968,398 224,154,292

Total Energy use (kWh) 349,052,789 269,192,885

365,871,875

we are resetting our baseline year to 2019 to allow alignment with the baseline year for Science-Based Targets

2020 energy usage is reduced due to Covid restrictions and shop and supply site furlough

UK only

WE CONTINUE TO HOLD THE CARBON TRUST STANDARD IN

RECOGNITION OF OUR WORK ON CARBON EFFICIENCIES AND

OUR ENVIRONMENTAL MANAGEMENT SYSTEM IS CERTIFICATED

TO ISO 14001:2015. IN ADDITION, WE DISCLOSE OUR GHG EMISSIONS

THROUGH THE CARBON DISCLOSURE PROJECT.

Annual Report and Accounts 2021Greggs plc

We are proud of our reputation for bringing

the best talent through the business regardless

of gender and that 69% of our total workforce

is female, almost half of our management

population is female and, of the eight current

Board posts, four are held by women.

In January 2022, we were thrilled to announce

the appointment of our first ever female

Chief Executive.

Female Male Total

Board 3 4 7

Senior managers 56 61 117

Other managers 247 262 509

All employees 17,321 7,839 25,174

Notes: Headcount figures at 31 December 2021. 69% of total workforce

was female (17,321 of 25,174).

For info: There are 14 employees whose gender is recorded as ‘Unknown’,

‘Undeclared’ or ‘Other’, hence the total figure of 25,174 is not the sum of the

Female and Male totals.

SUSTAINABILITY REPORT CONTINUED

GENDER OF

WORKFORCE

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021Greggs plc

ENGAGING WITH OUR

STAKEHOLDERS

During 2021, the Board continued to

consider the impact of Covid on all of its

stakeholders, and in particular, taking

into account the safety of our colleagues

and customers, whilst at the same time

developing the business and seeking to

return as quickly as possible to normal

trading patterns.

Section 172 statement

The following pages 46 to 54 comprise our section 172

statement and describe how the Directors individually and

collectively, acting in good faith, have exercised their duties

over the course of the year to promote the long-term

success of the Company for the benefit if its members as

a whole, and in doing so have had regard to the matters set

out in section 172(1) (a) to (f) of the Companies Act2006.

OUR STAKEHOLDERS

Annual Report and Accounts 2021Greggs plc

OUR STAKEHOLDERS CONTINUED

CUSTOMERS

How and why we engage Impact on Board decisions

Our customers are at the

heart of everything we do.

Understanding the role we

play in peoples’ lives is at the

forefront of how we plan and

operate, so we’re constantly

evolving our proposition to

remain relevant.

By speaking to customers in

shops, through our Customer

Care and Insight teams, and

across our digital channels

– we’re constantly listening

and learning so we can

understand how best to

serve the nation.

During the year we have had

to keep the health and safety

of customers and colleagues

at the top of our minds, as we

continued to trade through

the pandemic. The Board

considered new shop

openings, the relationship

with Just Eat, developing

Click + Collect, and there was

a real focus on developing

our App, website and CRM

system to allow timely and

effective communication

with our customers. A

cross-functional project

team worked on further

contributing to customer

safety by the launch of our

allergen labelling and

sandwich production

system across all shops

ahead of the legal labelling

requirement from

1 October 2021.

COLLEAGUES

How and why we engage Impact on Board decisions

Our people are what makes

our business successful. We

want to provide a great place

to work, where they feel

valued, want to stay with us

and new employees want to

join. In 2021, we saw a

significant change in

workforce availability, a

shortage of skills (e.g. lorry

driving) and an increased

need for colleagues due to our

shop opening programme.

We continued to

communicate with our

colleagues through regular

Chief Executive updates,

partnership forums,

colleague suggestion scheme

‘Your Ideas Matter’, key

calendar events and our

annual Conference and

Cascades. We extended our

networks and listening

groups to include ethnicity

and disability.

We approved the

continuation of Covid

testing in our manufacturing

sites, continued to provide

protection against Covid and

maintained protections in

our shops, including perspex

counter-top screens, hand

cleansing and sanitising

stations for colleagues

and customers.

As part of our annual

negotiations with our union

colleagues, we agreed to

significant increases in pay

rates, as well as backdating

awards several months in

recognition of the

magnificent work done by

our teams during difficult

circumstances across

theyear.

SUPPLIERS

How and why we engage Impact on Board decisions

Although we manufacture the

majority of what we sell, we

are reliant on food ingredient

suppliers, services providers,

property landlords, sellers of

’goods not for resale',

including shop uniforms and

equipment, and many others

within our supply chain.

By working collaboratively

with suppliers who share

our values, we can produce

high-quality products while

having a positive impact

on people and the planet.

Regular meetings, joint

projects, supplier visits and

our annual conference are

just a few examples.

We use the Ariba platform to

qualify suppliers and a variety

of tools to support our focus

on ethics and sustainability.

The Board acknowledged

that many suppliers were

having to face similar

business challenges as

those faced by the Company,

including Covid-related

absence, skills shortages,

import and logistical

challenges, and materials

shortages. By hearing from

the Chief Executive and

members of the Operating

Board, the Directors were

able to factor these issues

into their assessments of

business performance.

Strategic pillars

Great tasting, freshly prepared food

Best customer experience

Competitive supply chain

First class support teams

The Greggs Pledge

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021Greggs plc

OUR STAKEHOLDERS CONTINUED

SHAREHOLDERS

How and why we engage Impact on Board decisions

Our shareholders are the

owners of the business, and

we have obligations to keep

them apprised of significant

developments. We do this

through our regular

reporting schedule and

through meetings with

institutional shareholders

across the year, conducted

mainly by the Chief Executive

and Finance Director. We

hold an annual general

meeting after which

Directors mix with attendees

whilst enjoying a Greggs

lunch. Sadly in recent years

we have had to exclude

personal attendance

because of Covid-19

restrictions, but we hope

to return to a degree of

normality in 2022.

Following a temporary

suspension of dividend

payments during the

pandemic, we announced as

part of our half-year results

in August 2021 that an

interim dividend of 15.0p

per share would be paid.

A special dividend of 40.0p

per share was declared on

8 March 2022 and a final

dividend in respect of 2021

of 42p per share has been

proposed, subject to

shareholder approval. The

Board has also indicated a

return to its progressive

dividend policy.

LENDERS

How and why we engage Impact on Board decisions

Greggs is a cash-generative

business and historically has

not needed to approach

capital and debt markets

to fund its growth strategy.

With the onset of the

pandemic, it became clear

that it would be appropriate

and prudent to have in place

a formal bank facility, and

consequently, towards the

end of 2020, a revolving

credit facility of £100 million

was put in place with two

commercial banks. Although

that facility remains

undrawn, as part of that

ongoing relationship, the

Finance team provide

regular performance and

covenant compliance

updates to banking partners.

In determining the use of

cash resources, the Board

has regard to a number of

stakeholders, including

shareholders (through the

potential for dividend

payments), colleagues

(through pay awards and

bonus entitlements) and

pension scheme obligations

through managing the

scheme alongside the

Trustee to ensure it is

successful on its journey

to de-risking in the next ten

years. Should the Board

authorise a draw down of

the revolving credit facility,

it would take that debt into

consideration when

determining the allocation

of cash resources.

COMMUNITIES

How and why we engage Impact on Board decisions

The sheer ‘localness’ of

our operations and our

longstanding relationship

with The Greggs Foundation

helps us to better understand

the needs of our communities

and how we are best placed to

make a positive impact.

Through initiatives such as

supporting Greggs Breakfast

Clubs, our food donation

programme and working

with people in the community

to help get them get back into

employment through our

Fresh Start programme, as

well as facilitating fundraising

activities for many other

good causes, including

Children in Need and the

Poppy Appeal, we aim to

build stronger, healthier

communities – a fundamental

tenet of The Greggs Pledge.

During the year the Company

implemented operational

changes to enable

compliance with ‘Natasha's

Law‘ on allergen labelling, so

named following the tragic

death of Natasha Ednan-

Laperouse in 2016, having

eaten a sandwich to which

she suffered a fatal allergic

reaction. The Board

approved a significant

further donation in

December 2021 to the

Natasha Allergy Research

Foundation, adding to that

made in December 2019. The

Board is anxious to support

research into the causes of

allergies in the hope that

tragedies like that which the

Ednan-Laperouse family

suffered can be avoided.

Annual Report and Accounts 2021Greggs plc

OUR STAKEHOLDERS CONTINUED

Expanding our LGBTQ+ colleague network

Our LGBTQ+ network was formed at our head office,

Greggs House, a couple of years ago. This year they

have been working hard to expand their network to

include colleagues in other areas of the business.

This meeting is chaired by one of the Commercial

team. It is supported by two Operating Board

sponsors, Richard Hutton and Malcolm Copland,

and a number of Retail colleagues have joined in.

Sandra Turner attended the meeting in November,

where there were 12 colleagues in attendance and

the topics discussed included:

– The network’s vision and purpose

– Network name

– Pride 2022

– Use of pronouns on name badges

– Your Opinion Matters

– Zero Tolerance Customer poster – part of

supporting our retail colleagues with

customer abuse

Colleague engagement

The Board’s contact with its colleagues was again

significantly impacted by the pandemic, with the priority

being to ensure that colleagues who were not able to work

from home were able to operate in as safe an environment

as possible. For part of the year this has meant restricting

visits to production sites for anything other than ‘essential‘

activities. Our shops have remained open throughout the

year, save for isolated incidents where trading hours were

reduced, or a shop even closed temporarily, whilst team

members were either isolating themselves as a result of

contracting Covid-19, or because of a family member’s

isolation. So shop visits have been informal and restricted

to ‘front of house‘.

Nevertheless, the Board was able to make good use of virtual

communication tools to engage with a wide range of

colleagues and hear their feedback.

Colleagues Customers Shareholders

Attendance at Greggs

Negotiating Committee meetings

Progress report on App development Declaration of interim dividend

Attending LGBTQ+ network

group (see case study on page 48)

Market insight presentations Extension of RCF with lenders

Attending opening of Balliol National

Distribution Centre (see case study on

page 51)

Pricing strategy and impact of inflation Virtual AGM

Updates on progress towards achieving

National Equality Standard

(see case study on page 49)

Natasha's Law compliance –

monitoring and approval of the

allergen labelling system

(see case study on page 54)

Share register monitoring

Findings from the Employee

Opinion Survey

Undertaking a review of franchise

partner activity

Investor relations strategy review

During 2021, the Board was again restricted in the number of face-to-face sessions with stakeholders that it was able

to undertake. Nevertheless, through the use of video-conferencing, there were many opportunities for the Board to

engage with stakeholders.

By stakeholder, some of the activities of and information provided to the Board in the year were:

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021Greggs plc

CASE STUDY: DIVERSITY

AND INCLUSION

As part of our moving towards achieving the National

Equality Standard, we provided a training session to our

Main Board and Operating Board. As part of that training,

Directors were interviewed by EY prior to attending an

‘Inclusive Leadership‘ workshop. This enabled EY to

understand current views on cultural strengths and priorities

in order to shape the content of the workshop. EY also spoke

broadly to Directors about their personal involvement in

driving Diversity and Inclusion (D&I) initiatives across teams,

specifically in areas such as the approach taken when

recruiting and promoting as well as understanding the

culture of Greggs.

Building upon the knowledge taken from the interviews,

the ‘Inclusive Leadership‘ workshop was developed.

The session’s priorities included:

– Understanding of the D&I imperative for Greggs.

– An enhanced awareness of how each individual’s unique

experience and view of the world has shaped their

leadership style.

– An appreciation of how external and internal influences

can impact an inclusive workplace.

– Ideas for a Greggs D&I strategy and a personal inclusive

leadership legacy for Directors.

This workshop was then used as a basis to develop

Inclusive Leadership and Inclusive Management

workshops which were subsequently delivered to

our 500-strong management population.

Later in the year, National Equality Standard assessment

interviews were conducted individually with each of

the Operating Board and formed part of the National

Equality Standard assessment process. The outputs

from those sessions, alongside focus groups with our

wider workforce and a colleague survey completed by

over 4,000 colleagues to assess our cultural health,

were fed into the assessment process.

Towards the end of the year, the assessment outcomes

were presented to the Main Board. The were a number of

areas for the business to be proud of with the top five being:

– Culture – the assessment was overwhelmingly positive

about the working culture and sense of inclusion

at Greggs.

– Policies – clear policies were identified as being in place

that support key diverse groups.

– Adjustments and accessibility – a proactive approach is

in place to provide adjustments and accessibility for a

range of requirements.

– Learning and development – there is comprehensive

learning available for colleagues including a strong

induction and career pathway programme. This includes

a strand for women’s development.

– Colleague networks – the establishment of colleague

network and listening groups across a range of different

diversity topics including ethnicity, LGBTQ+ and disability.

And there were key priorities and focus areas identified

for 2022:

– Ensuring we continue to develop further a diverse talent

attraction programme.

– Implement a cross-functional D&I steering group to

review D&I plan and track progress.

– Focus on updating and understanding our colleague

data to help inform decisions.

– Deliver Inclusive Management workshops across our

Shop Manager, Supply Supervisor and Support Team

Leader colleagues.

OUR STAKEHOLDERS CONTINUEDOUR STAKEHOLDERS CONTINUED

Annual Report and Accounts 2021Greggs plc

OUR STAKEHOLDERS CONTINUED

Board engagement sessions included the following:

Greggs Negotiating Committee (GNC) – July 2021

As part of Greggs’ longstanding relationship with recognised

unions (Bakers Food and Allied Workers Union (BFAWU) and

Union of Shop, Distributive and Allied Workers (USDAW)),

regular meetings are held covering a variety of topics,

including trading, strategic initiatives, The Greggs Pledge

and annual pay negotiations. The GNC is our national union

forum which is attended by Sarah Woolley (General Secretary

BFAWU) and union representatives from across the

business. In July 2021, Ian Durant and Helena Ganczakowski

attended a scheduled meeting to discuss the role of the Main

Board, and the Remuneration Committee. This session

primarily focused on building the team’s knowledge and

providing information on the role of Main Board and more

specifically the role of the Remuneration Committee and

what the Committee has responsibility for.

Topics that came up for discussion included whether there

could be an employee representation on the Board, the value

of the Chief Executive's salary vs the lowest paid colleagues

in Greggs, how the variable pay elements were constructed

and succession plans for key roles in the business,

specifically the Chief Executive.

Retail Partnership Forum – September 2021

The Retail Partnership Forum is made up of our union

representatives from across retail and the teams specifically

discuss operational issues across the retail estate. Sandra

Turner attended as the Non-Executive Director having

responsibility for overseeing colleague engagement.

Key topics discussed in this meeting included visits to

shop teams on their sites, getting back to ‘normal‘, and

communication between the Main Board and colleagues

in the business.

Colleague engagement survey –

Your Opinion Matters

Additionally, all Directors were present at the meeting in

November when the People team presented the findings of

the latest colleague engagement survey – 'Your Opinion

Matters' (YOM). The Board received a presentation from

members of the People team on the outcomes of the YOM

survey conducted in the third quarter of 2021. Response

rates achieved included 64% overall (14,656 respondents),

made up of 89% management and support, 65% in retail

and 49% of supply chain. This compared with a response

rate of 91% the last time the survey was undertaken in 2019.

An engagement score is also calculated using four

questions from the survey including: “I am proud to say

I work for Greggs” and “I would still like to be working at

Greggs in two years’ time”. The engagement score was 82%,

a slight drop of 2% versus 2019, but given the colleague

experience over the 18 months of the pandemic at the time

the survey was undertaken, the Board considered this to

be an excellent outcome.

For the first time, responses were measured with reference

to declared ethnicity sexual orientation and disability, with

overall levels of engagement similar to those reported for

the whole responding population.

The Board was informed that each function would be

producing an action plan in response to specific findings.

Rewarding the workforce

As a result of the onset of the pandemic in 2020, which led to

all shops being closed for several months, and the ensuing

lockdowns and reduced trading that followed, the Company

reported a loss for that year, and was not able to share profits

with colleagues as it had done for many years. The Board is

delighted that as a result of the return to profitability in 2021,

we are able to recommence our long tradition of sharing

10% of our profits with employees, enabling them to share

in our success.

Each year, members of the People team undertake

negotiations with our relevant unions representing those

colleagues covered under a collective bargaining agreement.

Following the ballot, our shop teams receive a pay increase

with effect from April in any year and our supply chain teams

from January in any year.

Over recent years, the pay award applied to our graded

management population and Directors has reflected the

base increase for our wider workforce and is generally

applicable from January in any year.

A similar position was set up for the 2022 pay award.

However, the Board was cognisant of the continuing efforts

being undertaken by all colleagues to keep the business

going throughout the pandemic, and with continuing

success. This recognition was in the context of a tough

labour market where we required new colleagues to join the

shop expansion and opening programme. A base pay award

of 3.5% was agreed for all colleagues with an additional

3% for our lowest paid colleagues in retail. Following

discussions with the union, as a thank you to our teams,

it was agreed to backdate the implementation of this

pay award by five months.

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021Greggs plc

The opening was attended by the Directors, who

were given a presentation by the site management

team and were then able to tour the facility and see

its operation.

At a short ceremony following the tour, the Directors

were able to mingle with a number of colleagues who

work in the facility.

As part of his official opening speech,

Ian Durant commented:

“ To have built a facility of this scale

and complexity at any time would

have been an achievement, but to

have built it during a global pandemic

makes the achievement all the more

remarkable! I want to take this

opportunity to thank everyone

associated with the project for all

of their hard work in getting us to

this point, and also to thank the

operational team who I know have

been going up a steep learning curve.”

CASE STUDY: THE OFFICIAL

OPENING OF BALLIOL NATIONAL

DISTRIBUTION CENTRE

In September 2021, the Company’s £26 million frozen

storage facility was opened on a site adjacent to

the savoury production facility in the North East

of England.

The facility was approved by the Board in 2019,

and constructed through 2020 and 2021 during the

pandemic. The facility is of strategic importance

to Greggs, bringing together the majority of the

Company’s frozen storage requirements, improving

efficiency, and has a hugely positive impact on

reducing the carbon footprint – a key focus for

Greggs as outlined in The Greggs Pledge.

OUR STAKEHOLDERS CONTINUED

An increase of 3.5% was awarded to management and the

award was backdated from January 2022 to November 2021.

After careful consideration, Directors, and members of the

Operating Board, also received a 3.5% increase, with no

backdating. Further details are set out in the Directors‘

remuneration report on page 85.

The pension contributions (or cash equivalent) for Executive

Directors are now on a phased downward trend to align with

the majority of the workforce. The new CEO Designate, who

was appointed to the Board on 1 February 2022, receives the

same level of pension contribution as the majority of the

workforce. Again, further details can be found in the

Directors' remuneration report on page 89. To the extent that

during 2021 Executive Directors’ pension contributions were

not consistent with the majority of the workforce, the

Company was not compliant with the Corporate Governance

Code Provision 38, although as set out on page 98 of the

Directors' remuneration report the Remuneration

Committee has set out a timetable to attain full compliance,

with the terms for the new Chief Executive already aligned.

Provision 36 of the Governance Code requires the

Remuneration Committee to develop a formal policy for

post-employment shareholdings. The Committee has

developed such a policy and applied it only to new Executive

Directors, and in this respect, it has been applied to Roisin

Currie who joined the Board on 1 February 2022 as CEO

Designate. To the extent that this policy has not been applied

to the then current Executive Directors when the policy was

developed, this may be interpreted as a non-compliance

with Provision 36. The Committee will be reconsidering this

point as part of its policy review later in 2022.

Annual Report and Accounts 2021Greggs plc

OUR STAKEHOLDERS CONTINUED

Our other stakeholders

Our stakeholder population beyond our colleagues

(and former colleagues through their pension scheme

membership) encompasses our shareholders and the

investment community including our lenders, our customers

and the communities in which they live and work, without

whom there is no Greggs brand, and our products and

services suppliers who are such an integral part of the

Greggs supply chain. We have set out on the following pages

how the Board keeps apprised of significant developments

across each of these groups.

Customers

The Board receives several reports and presentations across

the year from the Customer Insight team, which helps the

Board determine various commercial strategies, factoring in

competitor activity, pricing and inflation, customer footfall

for shop locations and marketing promotions. Specific topics

covered in the year included:

– Macro customer trends

– Food-to-go market overview

– Greggs and competitor performance in food to go

– Brand health

– Brand perceptions/satisfaction

– Daypart performance

– Business plan, deep dives:

– Focus on delivery/evening/hot food

– Focus on coffee

– Focus on health

Shareholders

It was regrettable that, once again because of the pandemic,

we were unable to welcome shareholders to our annual

general meeting usually held in May in Newcastle upon Tyne.

Shareholders were given the opportunity to register to view

the meeting online and encouraged to use their proxy vote.

Because of the restrictions, no external shareholders were

permitted to attend the meeting in person, and the quorum

was made up of the Finance Director, Company Secretary

and one other employee shareholder. All of the Directors

were otherwise present virtually.

At that meeting shareholders agreed to change the articles

of association to allow fully for hybrid meetings in the future,

although the Board are hopeful that a physical meeting will

be possible on 17 May 2022, with shareholders present in the

room for the first time in what will then be three years.

The Chair takes responsibility for ensuring that key

shareholders are aware of, and supportive of, the Board’s

approach to governance, networking widely across the

institutional shareholder population, and from time to time

meeting with larger shareholders.

Much of the regular interaction with shareholders and the

analyst community is undertaken by the Chief Executive and

Finance Director, particularly around the times of the release

of the preliminary and interim results. In between, the

Finance Director is in regular contact with the investment

community sharing details of the Company's performance

and strategy. Following key announcements, the anonymised

views of shareholders are reported to the Board by UBS and

Investec, the Company’s retained brokers, and press and

analyst feedback is provided by Hudson Sandler, the

Company’s financial communications consultants.

In early 2021, the Board consulted with a number of

institutional investors and proxy advisers over the

Performance Share Plan and Employee Share Option

Scheme awards made to the management population in

2018. Performance criteria had not been met as a result

of the pandemic, and the Board asked shareholders whether

they thought it appropriate that nevertheless the

Remuneration Committee should exercise its discretion

andallow 50% of awards to vest. Based on that consultation,

the Board felt that, on balance, its proposal would not be

supported, and therefore it did not proceed.

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021Greggs plc

OUR STAKEHOLDERS CONTINUED

Suppliers

The Chief Executive attended several so-called ‘top-to-top‘

meetings with key suppliers. These included Fairtrade,

Quorn and Biffa. Reports on these meetings, and others, are

shared with the Board so that key issues can be understood

and factored into the Board’s decision-making processes.

Quorn is a key partner in the development of the Board’s

plant-based food development programme, and Biffa is

a significant service provider to the Company’s waste

management activity as part of The Greggs Pledge.

Lenders

The revolving credit facility that was put in place in 2020

remains undrawn. However, in December 2021 it was

extended by one year, and will now expire on 8 December

2024. Nevertheless, the Finance Director maintained

relationships with the two commercial lenders, meeting

with them virtually and in person to keep them informed

on business performance.

Other stakeholder considerations

Greggs is committed to acting fairly between all

stakeholders of the Company. The impact of the Company’s

operations on the environment is covered in our

sustainability reporting on pages 36 to 44. Details of

our business conduct policy are set out on page 76.

Annual Report and Accounts 2021Greggs plc

CASE STUDY: IMPLEMENTING

NATASHA’S LAW

Following the tragic death of Natasha Ednan-Laperouse,

who suffered an allergic reaction as a result of eating

another brand's shop-made sandwich, the Board oversaw

the implementation of a new shop production and labelling

system, in order to ensure compliance with new laws that

came into effect on 1 October 2021. The law change required

businesses such as Greggs, who had not previously been

required to label products, for example, sandwiches made

each day in shop, with consumer information regarding the

food contents, highlighting allergens in particular.

The business saw this as an opportunity to support shop

teams responsible for in-shop production of sandwiches,

by helping them to manage ingredients and quantities,

keep sight of ingredient stocks and batches made and

allow central teams to monitor ingredient usage and plan

for replenishment. The output was an ingredient label

placed onto every item packaged instore.

The project team had a number of significant hurdles to

overcome: the supply of the wrong equipment, delays to

hardware delivery because of the Ever Given container ship

episode in the Suez Canal, and the roll out and installation

of multiple screens, tablets and label printers to over

2,000 shops.

Shop teams were trained on use of the new system, and

compliance with the law is monitored on an ongoing basis

by the shops teams themselves, area managers and retail

auditors, as part of the Company’s safety and compliance

due diligence process.

Colleague engagement was key to landing this successfully

in our shops and we worked closely with The Allergy Team,

an organisation whose mission is ‘Helping families living

with food allergies to thrive’, to produce a video which was

shared Company-wide. The video helped our colleagues

to understand the importance of food allergies and that

they have a vital role to play in keeping families living with

food allergies safe.

The new process was well received by colleagues

and customers.

In November 2021, two of the lead project team were

invited into a Board meeting to report on the success of

the implementation, and to receive the Board’s thanks

for their efforts and achievements.

“ The system is easy to

use and it makes sure

we get the right stuff

in our sandwiches.”

“ The video really made

my team get how

important this is.”

OUR STAKEHOLDERS CONTINUED

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021Greggs plc

FINANCIAL REVIEW

Greggs came back strongly in 2021, restoring profitability and increasing

the pace of growth in the shop estate. With comparatively modest

capital expenditure in 2021 the Group’s cash position is very strong.

This will be put to use in 2022 as we pursue our ambitious growth plans

whilst investing further in the sustainability of the business and

enhancing returns to shareholders.

2021

£m

2020

£m

2019

£m

Revenue 1,229.7 811.3 1,167.9

Operating profit/(loss) 153.2 (7.0) 114.8

Net finance expense (7.6) (6.7) (6.5)

Profit/(loss) before tax 145.6 (13.7) 108.3

Income tax (28.1) 0.7 (21.3)

Profit/(loss) after tax 117.5 (13.0) 87.0

Sales

Total Group sales for the 52 weeks ended 1 January 2022

were £1,229.7 million (2020: £811.3 million, 2019: £1,167.9

million). Sales continued to be affected by Government

restrictions in the first quarter of the year but progressively

improved as conditions eased. The comparative sales

results for 2020 were significantly impacted by the closure

of the Greggs shop estate for most of the second quarter

therefore we have continued to report 2021 financial

performance relative to the 2019 level.

Reporting ‘like-for-like’ sales (sales in company-managed

shops with more than one calendar year’s trading history) is a

key alternative performance measure for Greggs, as it shows

underlying estate sales performance excluding the impact

of new shop openings and closures. In reporting like-for-like

sales in 2021 we have compared our performance with the

equivalent period of 2019, generating a ‘two-year like-for-like’

KPI. The results across 2021 reflected the difficult conditions

at the start of the year, followed by a strong recovery and

then the impact of the Omicron variant and VAT increase in

the fourth quarter:

Q1 Q2 Q3 Q4 2021

Company-managed

like-for-like sales

compared with

2019 level

(21.5%) 2.8% 3.5% 0.8% (3.3%)

Annual Report and Accounts 2021Greggs plc

FINANCIAL REVIEW CONTINUED

Total Group revenue reflects sales from company-managed

shops, which include delivery sales, and sales through

business to business (B2B) channels with our franchise and

wholesale partners. Whilst year-on-year comparisons are

distorted by the closure period in Q2 2020, both company-

managed and B2B sales developed through the year as

customer numbers recovered and we grew the size of the

shop estate. We are still learning how delivery sales behave

seasonally and under different trading conditions. Absolute

delivery sales were strongest in the second quarter of the

year and reduced slightly in the fourth quarter. The primary

driver of B2B sales growth continues to be expansion of the

franchised shop estate.

£m

2021

£m

Company-managed

shop sales

209 280 299 311 1,099

[£m relating to delivery

channel]

[19.7] [21.8] [20.9] [18.3] [80.7]

B2B sales 27 30 35 39 131

Total revenue 236 310 334 350 1,230

Profit for the year

Profit before tax in 2021 was £145.6 million (2020:

£13.7 million loss, 2019: £108.3 million profit). There were

no exceptional items (2020: £0.8 million charge, 2019:

£5.9 million charge).

Overall wage and salary cost inflation was 3.0% in 2021.

The planned 2022 pay increase for operational teams was

brought forward by five months, adding £4.5 million to

costs in 2021. Looking forward, as a result of the latest pay

awards overall wage and salary inflation is expected to be

approximately 4.3% in 2022. In addition, the rate of National

Insurance on wages and salaries is due to increase by 1.25%

from April 2022.

As expected, the rate of food, packaging and energy cost

inflation increased towards the end of the second half of

2021 as forward contracts were renewed, and in the year

ahead we expect that cost inflation in these areas will

increase further. In addition, the restoration of the full

rate of VAT on hot food and drink sales will be effective

from the start of April 2022.

Shop occupancy costs continue to improve as we negotiate

rent reductions on renewal of our commitment to leased

properties. Greggs strong covenant is attractive to the

landlords of shop premises and this is an important factor

in gaining access to new catchments as well as improving

our cost ratios where we already trade. In 2021 the ratio of

IFRS 16 ‘right of use’ charges on leased property assets to

company-managed shop sales was 4.9%, down from 5.1%

in 2019, and we expect this ratio to improve further in the

year ahead.

Taken together, the impact of inflation in employment and

other input costs is expected to result in a cost inflation

headwind of around 6-7% in 2022. A proportion of this is

forward-covered but the outlook for many commodity

costs remains uncertain. This has necessitated some

price increases, which were made at the start of this year,

and further changes are expected to be necessary. Our

competitive pricing position is strong and, as ever, we will

be protective of Greggs reputation for outstanding value

for money in managing this inflationary environment.

As we reported at the half year stage, the improved

performance and trading outlook of our shops resulted in

us deciding to repay all Coronavirus Job Retention Scheme

(CJRS) support claimed in the first half of 2021, a total of

£4.9 million. The sector-wide business rates relief for retail,

hospitality and leisure businesses temporarily reduced costs

by £14.9 million in the first half of the year.

Turnover

£1,229.7m

Profit before tax

£146.5m

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021Greggs plc

FINANCIAL REVIEW CONTINUED

The improved performance and trading outlook for

our shops resulted in the net reversal of £2.2 million of

previously-provided shop asset impairment charges.

A further £1.3 million of impairment has been released

in respect of land and bakery plant and machinery which

is no longer considered to be impaired.

Financing charges

The net financing expense of £7.6 million in the year (2020:

£6.7 million, 2019: £6.5 million) comprised £6.3 million in

respect of the IFRS 16 interest charge on lease liabilities,

£1.1 million of facility charges under the Company’s

(undrawn) financing facilities and £0.2 million relating

to the Company’s defined benefit pension scheme and

foreign exchange losses.

Taxation

The Company has a simple corporate structure, carries

out its business entirely in the UK and all taxes are paid here.

We aim to act with integrity and transparency in respect of

our taxation obligations.

The Group’s overall effective tax rate on profit in 2021

was 19.3% (2020: 5.2% rate on losses, 2019: 19.7% rate on

profit). The effective rate on profit in the year reflects the

revaluation of deferred tax balances resulting from the

expected increase in the Corporation Tax rate from April

2023 and additional 'super-deductions' relating to capital

expenditure in 2021.

The impact of super-deduction capital allowances will

affect the Group’s effective rate of taxation in 2022. We

expect the effective rate for 2022 to be around 17.5% and

the effective rate for 2023 to be around 24.0%. Going

forward the effective rate is expected to be around 1.0%

above the headline corporation tax rate; this is principally

because of disallowed expenditure such as depreciation

on non-tax-deductible qualifying properties and costs of

acquisition of new shops.

Earnings per share and dividend

Diluted earnings per share in 2021 were 114.3 pence

(2020: 12.9 pence loss per share, 2019: 85.0 pence

earnings per share).

The Board recommends a final ordinary dividend of 42.0

pence per share (2020: nil). Together with the interim

dividend of 15.0 pence (2020: nil) paid in October 2021, this

makes a total ordinary dividend for the year of 57.0 pence

(2020: nil). This is covered two times by diluted earnings per

share in line with our progressive ordinary dividend policy,

which aims to increase the dividend in line with growth in

earnings per share.

The ordinary dividend is set at a level designed to provide

capacity for the Group to invest in the many attractive

opportunities for further growth. In situations where the

Board concludes that the cash position is above the level

required to support the Group’s investment and working

capital needs its policy is to make an additional return to

shareholders by way of a special dividend. In application

of this policy the Board has declared a special dividend of

40.0 pence per share, to be paid on 29 April 2022 to

shareholders on the register at 25 March 2022.

Subject to the approval of shareholders at the annual general

meeting, the final dividend will be paid on 8 June 2022 to

shareholders on the register at 13 May 2022.

Balance sheet

Capital expenditure

We invested a total of £57.4 million (2020: £58.7 million, 2019:

£86.0 million) in capital expenditure during 2021. In addition

to expenditure on new shops, key projects included the roll

out of new coffee machines as we extend our capabilities in

hot drinks, the completion of the Balliol Park automated cold

store and investments in increased capacity for savoury and

pizza production. Retail estate expenditure continued to be

relatively low and will increase in 2022 as we increase the

rate of company-managed shop openings and recommence

the shop refurbishment programme.

Depreciation and amortisation on property, plant and

equipment and intangibles in the year was £58.7 million

(2020: £60.8 million, 2019: £59.9 million). A further

£48.7 million (2020: £51.9 million, 2019: £50.8 million)

of depreciation was charged in respect of right of use

assets as a result of capitalised leases.

At our Capital Markets Day event in October 2021 we outlined

ambitious targets to double turnover over the next five years.

As well as investing in a faster rate of estate growth the

plans require additional capacity in our manufacturing and

logistics network. Our plans for 2022 include capital

expenditure of around £170 million as we increase the pace

of shop investment, invest in a new site to be the focus of our

capacity expansion for southern England, and add further

manufacturing capacity to our savoury manufacturing plant

at Balliol Park in Newcastle upon Tyne. The required

investment is planned to be funded from our existing cash

reserves and future operational cash generation.

Management of return on capital

We manage return on capital against predetermined targets

and monitor performance through our Investment Board, a

management committee where all capital expenditure is

subject to rigorous appraisal before and after it is made. For

investments in new shops we target an average cash return

on invested capital of 25%, with a hurdle rate of 22.5%, over

an average investment cycle of eight years. Other

investments are appraised using discounted cash flow

analysis. With market conditions for the acquisition of shop

sites being favourable we have been active in sourcing

opportunities in locations such as transport hubs and in

central London. Some of these sites will trade below

their mature level in the short term but are expected to

strengthen as the impact of the pandemic recedes.

Annual Report and Accounts 2021Greggs plc

FINANCIAL REVIEW CONTINUED

Working capital

We ended the year with Group net current assets of

£59.2 million (2020: net current liabilities of £45.4 million,

2019: net current liabilities of £66.4 million), the result of

carrying a closing cash and cash equivalents position of

£198.6 million (2020: £36.8 million, 2019: £91.3 million).

Excluding cash and cash equivalents, net current liabilities

have increased from £82.2 million to £139.4 million over the

year. This reflects the increase in trade and other payables

as turnover levels have recovered over the past year,

reversing the outflow experienced in 2020.

Pension scheme

The net liability shown on the balance sheet for the

Company’s closed defined benefit pension scheme was

£2.4 million at the end of 2021 (2020: £11.9 million net

liability). The improvement in the balance sheet position was

mainly as a result of the increase in the discount rate applied

to future liabilities. The scheme underwent a full actuarial

revaluation in 2020, the results of which showed a deficit in

funding. The Company is making additional contributions of

£2.5 million each year from 2022 to 2026 to ensure that any

funding requirements are met over the medium term as the

scheme works towards full de-risking.

Cash flow and capital structure

The net cash inflow from operating activities after lease

payments in the year was £236.5 million (2020: £1.5 million,

2019: £169.5 million). At the end of the year the Group had

net cash and cash equivalents of £198.6 million (2020:

£36.8 million, 2019: £91.3 million).

In normal circumstances the Group aims to maintain a

year-end net cash position of around £50 million to allow for

seasonality in its working capital cycle and to protect the

interests of all creditors. The current cash position is clearly

above this level, reflecting the strength of performance in

2021 and some short-term beneficial changes to working

capital. With a significant capital expenditure programme

ahead it is appropriate to carry an above-normal level of

cash into 2022; however, the Board’s assessment is that the

Group is in a position to make an additional distribution to

shareholders of £40.6 million. As indicated above, the Board

proposes to do so by way of a special dividend.

The Company’s revolving credit facility, which runs to

December 2024, allows it to draw up to £100 million in

committed funds, subject to it retaining a minimum liquidity

of £30 million (i.e. maximum net borrowings are £70 million).

This facility is designed to provide protection to the business

should it experience significant interruptions to trading.

With a strong cash position and committed facilities the

Company is in a position to invest in its growth plans whilst

supporting its many stakeholders and enhancing

shareholder returns.

Richard Hutton

Finance Director

8 March 2022

Diluted earning per share

114.3p

Capital expenditure

£57.3m

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021Greggs plc

RISK MANAGEMENTRISK MANAGEMENT

OUR APPROACH

TO RISK

MANAGEMENT

Understanding and managing our key risks is essential to enabling us to

deliver our strategy and make sound decisions. Risk in the business cannot be

avoided, but should be actively managed to help us to achieve our objectives.

An effective and robust risk management process is fundamental to protecting

the business, our customers and colleagues, and shareholder value.

Our Board has ultimate responsibility for risk management

across the business, and determines the nature and extent

of risk we are prepared to take. The Audit Committee fulfils

elements of the Board’s responsibility for risk which are

delegated to it, such as reviewing the effectiveness of the

overall approach, and receiving regular reports on assurance

activity. Proactive risk management is the responsibility of

the Risk Committee, which is a committee of our Operating

Board and incorporates senior management representation

from across the business. Throughout the business, the

responsibility for operational management of risks sits

within each function.

The Business Assurance function supports with the

preparation and review of the risk registers across the

business. The function also supports the Audit Committee in

reviewing the effectiveness of our systems of internal control.

Changes in 2021

Although our risk management approach is well established

and embedded in the business, we have taken the

opportunity this year to reflect on our methodology and

look for improvements. We appointed Marsh Advisory,

who helped us to redefine our key risks and update our

risk management process.

We have refreshed our strategic risk listing, identifying

anything which may hinder the achievement of our strategic

objectives or our commitments under The Greggs Pledge.

Our risks are categorised into four broad groups – strategic,

operational, financial and legal/regulatory. Each risk is also

linked to the relevant strategic pillars of our plan (including

The Greggs Pledge) which would be impacted if the risk

were to occur.

Our new strategic risk register describes the causes and

consequences of each risk, which is allocated to a risk owner

from our Operating Board. Key controls are recorded, and

their effectiveness in terms of design and implementation is

The various roles of those involved in the risk process are summarised in the diagram below:

Audit Committee Risk Committee

Main Board Operating Board

Business Assurance

function

Role

Direction & oversight

Key activities

Ongoing review of risk process;

consideration of whistleblowing

reports; assessment of

principal risks & uncertainties

Role

Identify, assess & monitor risk

Key activities

Consideration of new & emerging

risks highlighted by the business;

review of key strategic risks &

escalating as necessary

Role

Assurance on effectiveness

of risk management & controls

Key activities

Management of risk register;

arranging insurance cover

for risks where appropriate

Annual Report and Accounts 2021Greggs plc

assessed. Residual risk is scored in terms of likelihood and

impact, and we retain a trend of historic scoring. Actions

taken and potential further mitigations are also recorded.

We continue to review all of our key strategic risks at each

Risk Committee meeting, to discuss any movement in the

risk level, and determine whether any additional mitigating

action is required. Risk owners provide an update on current

and planned activity which may impact on levels of risk.

Committee meetings take place at least three times a year.

Where a significant risk is identified or there is a marked

change in exposure, this is raised directly with the Operating

Board to facilitate a timely assessment and response.

Plans for 2022

During the coming year, we plan to transfer our existing

functional risk registers into the same format as that used

for our strategic risks, to ensure consistency across the

whole organisation. This will help us to ensure the ‘bottom-

up‘ approach for operational risk is clearly linked and aligned

to the ‘top-down‘ approach for principal risks. It will also

provide a standardised approach for identifying, measuring

and managing risk.

We are developing a risk management tool which will

enable us to produce a series of dashboards and visual

representations of our risks. It will also allow us to capture

future planned and potential mitigations more effectively,

to inform our decision-making.

Risk appetite

Risk appetite is the level of risk which we are prepared

to accept in working towards our strategic priorities.

Significant decisions taken by the business will always

involve an assessment of the level of risk to which we may

be exposed and the risk we are prepared to take. We will

reassess our appetite for risk and formalise our assessment

process in the coming months as part of our ongoing project.

The Board will then include a consideration and approval of

our appetite as part of its annual review of our risk

management processes.

Changes to principal risks and our risk profile

Principal risks and uncertainties are those which could result

in a threat to our business model, future performance,

solvency or liquidity, or significantly erode the value of the

business. The key changes to principal risks and our risk

profile identified by the Board are as follows:

– Our previously identified risk relating to business

transformation is no longer considered a principal risk,

due to the project nearing completion. The impact of any

delay or disruption is therefore significantly reduced.

– A previous risk relating to third-party relationships has

been refined to focus on our franchise, wholesale and

delivery partners.

– We disclosed a risk relating to allergens and associated

labelling requirements in our 2020 annual report, in

response to the increased focus on this area and new

legislation being introduced. These specific requirements

are now embedded within our standard procedures, and we

have redefined the risk more broadly to acknowledge this.

– The Brexit risk has reduced since our last annual report,

when there was significant uncertainty about the

regulatory requirements and operational disruption.

Although we still suffer some operational challenges, this

is now treated as ‘business as usual’, so no longer merits

disclosure as a principal risk. Similarly, our response to the

pandemic is not a principal risk, as we have established

ways of working safely. However, its ongoing impact is felt

through a number of the other principal risks.

– We are working with our cyber security specialists and

other advisors to improve our management of our cyber

and data security risk, due to the rapidly evolving nature

and complexity of the threat. Projects are in progress

across the business to increase our resilience, working

towards the implementation of globally accredited

standards. We have robust security measures in place

to protect our network, and provide our teams with the

knowledge and equipment to manage our cyber risk

effectively. However, we consider our exposure to cyber

and data security risk to be increased at the present time

compared to that disclosed previously.

Emerging risks

The identification and subsequent management of emerging

risks forms a key component of our risk process. Such risks

are raised and discussed at our Risk Committee meetings

and, where appropriate, they are documented in the

strategic risk register and escalated to the Board if the

potential impact is significant.

Emerging risks are identified using the following

approaches:

– Horizon scanning by the relevant subject matter experts

in the business;

– Monitoring consumer trends; and

– Taking advice from third parties with whom we work.

Current areas of emerging risk which we are monitoring

include climate change, our Environmental, Social

and Governance (ESG) strategy and various changes

to regulation. Further information on climate change risk

can be found on pages 42 and 43 in our TCFD reporting.

Risk management framework

The Directors have carried out a robust assessment of the

principal and emerging risks facing the business, focusing

on those which would impact our business model or the

achievement of our strategy, or threaten Greggs’ solvency

or liquidity.

The following table sets out our principal risks, movement

during the year and a summary of key developments and

mitigations. This does not include all of our risks, and is not in

priority order. Additional risks not presently known to us, or

which we currently consider to be less significant, may also

have a negative impact on the business. The exposure to

each of the risks will change as we take mitigating actions,

or as new risks emerge. The position stated below is a

summary of the status at the date of the annual report.

RISK MANAGEMENT CONTINUED

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021Greggs plc

What is the risk? Key developments Key mitigations Strategic pillars Movement

SUPPLY CHAIN

DISRUPTION

There is a risk that we could be subject to a

significant business interruption event impacting

key operational locations. Examples include a

physical damage incident, a prolonged power

outage or denial of access.

External supply could also be disrupted, which

would have an impact on our ability to operate

our production sites.

Either of these events would impact our ability

to supply our customers.

We have contingency plans in place for our sites which

are tested periodically.

Our new freezer facility has redundancy built into its

design, allowing it to continue operating in the event

of a breakdown to one of its primary systems.

If a distribution centre is impacted, we are able to flex up

operations at other centres to meet demand.

Insurance cover is in place, and we work closely with our

insurers throughout the year.

We avoid single source supply for key ingredients, and

implement contingency plans when necessary.

DETERIORATION OF

RELATIONSHIP WITH

KEY PARTNER

In addition to our company-managed shops, we also

work with key franchise, wholesale and delivery

partners to help us broaden our service offer. For

this to be effective, we must be fully aligned in our

strategy, goals and operation.

We work with respected brands, and have an

onboarding process.

We have widened the range of partners with whom

we are working.

Contracts and service level agreements are in place.

Franchise partners are subject to the same audit process

as our company-managed shops.

ABILITY TO

ATTRACT/RETAIN/

MOTIVATE PEOPLE

In an increasingly competitive labour market, we

need to be able to offer opportunities which meet

individual needs. Without the right people with

appropriate skills, we are unable to offer the range

and service levels which our customers expect. We

may lose talented resource, resulting in increased

workloads and greater training needs. Our Company

culture may change as a result.

We offer competitive remuneration and benefit packages,

and flexible working arrangements.

Our teams are supported and developed through training

and appraisal.

Opinion surveys and listening groups help us to identify

where we can improve our approach to recruitment

and retention.

DAMAGE TO

REPUTATION

As the business grows, so does the risk of our

brand reputation being damaged, and customer

trust being lost if we fail to respond appropriately

to an incident.

Our greater digital presence increases this risk

due to the speed of public communication.

Working with a wider range of partners also results

in greater risk, as we have less direct control.

Our company-managed shops and those of our franchise

partners are subject to regular audits to make sure that

appropriate standards are met.

We have a robust crisis management process in place.

We work with PR agencies to support us where appropriate.

RISK MANAGEMENT CONTINUED

Great tasting, freshly prepared food

Best customer experience

Competitive supply chain

First class support teams

The Greggs Pledge

Principal risks and uncertainties

Annual Report and Accounts 2021Greggs plc

RISK MANAGEMENT CONTINUED

What is the risk? Key developments Key mitigations Strategic pillars Movement

CYBER & DATA

SECURITY INCIDENT

A cyber security incident could impact our IT

infrastructure, potentially leading to the loss of

data. This could cause operational disruption,

litigation and fines, and reputational damage.

Third parties provide expertise and support, including

penetration testing.

Appropriate technical measures are in place and updated

in line with changing requirements.

We have cyber insurance in place.

Training and education for colleagues, including a planned

simulation exercise for the Operating Board.

We are implementing recognised information security

control sets.

PROLONGED

SYSTEM DOWNTIME/

INTERRUPTION

Our systems are becoming more integrated and

interconnected as we streamline the business and

increase our reliance on technology. Any system

issues therefore have a much greater impact,

potentially resulting in disruption to operations

and supply into our shops.

We continue to invest significantly in our IT infrastructure.

Multiple layers of resilience are built into our SAP system.

We work with partners to provide additional expertise

when required.

SIGNIFICANT FOOD

SAFETY INCIDENT/

PRODUCT QUALITY

ISSUE

The products which we sell may be unsafe, or not

of the expected quality. This could be caused by

contamination, incorrect allergen labelling or

procedures not being followed correctly. This

would damage our reputation as a food retailer,

could cause harm to our customers and affect

our financial performance.

Internal and external audit and quality assurance

monitoring processes are in place across our operations.

We audit our key ingredient suppliers, based on the level of risk.

Defined specifications are in place for all of our

manufactured goods to ensure consistency.

Training is provided on a regular basis to our teams.

Complaints are fully investigated to determine the root cause.

Stringent hygiene measures are in place.

CHANGES IN

REGULATORY

LANDSCAPE

In an increasingly challenging regulatory

environment, we need to be ready to adapt quickly

to comply with any new legislation. In particular,

environmental and health concerns may result in

new requirements being implemented, which could

require changes to our range. We have greater

exposure in some areas than our competitors.

Regular horizon scanning activities are undertaken.

Our Trade Association involvement and Government links

allow us to monitor upcoming legislative changes.

We also monitor new legal requirements, including

information from industry forums.

SIGNIFICANT

FINES FOR

NON-COMPLIANCE

We are potentially exposed to large fines for

legislative breaches across many parts of our

business, such as Health and Safety, transport

and environmental requirements. This would

also damage the reputation of the business.

Due diligence controls are in place across the business

to monitor our compliance.

Audit processes confirm whether the correct procedures

are being followed.

Modern slavery considerations are taken into account

when we appoint new suppliers.

Great tasting, freshly prepared food

Best customer experience

Competitive supply chain

First class support teams

The Greggs Pledge

Principal risks and uncertainties continued

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Annual Report and Accounts 2021Greggs plc

RISK MANAGEMENT CONTINUED

Viability statement

The Directors have assessed the Company’s prospects and

viability taking into account its current position, plans and

principal risks. The assessment has considered the

continuing uncertainty around the pace of recovery from the

pandemic, however given the recovery through 2021 this is

less of a concern than it was at the prior year reporting date.

In carrying out its assessment the Board has reviewed the

three-year operational and financial plans to 2024. This is

the period over which the Board reviews management’s

business planning and sets performance targets, and

therefore the Board believes that this is the most appropriate

timeframe over which to make the viability assessment.

The Directors have carried out a robust assessment of the

principal risks facing the Company, including those that

would threaten its business model, future performance,

solvency or liquidity. The impact of the pandemic has been

reflected in the risk that the entire business could be

temporarily prevented from trading and be faced with

prolonged periods of subdued demand, with consequent

pressures on liquidity.

The principal risks to which the Company is exposed

ultimately affect the ability of its shops to trade successfully,

either due to reduced demand or because of operational

interruptions, including those to its internal supply chain.

A significant loss of sales is particularly damaging given

the Company’s vertical integration in that the cost of the

internal supply chain cannot be reduced quickly.

In order to stress-test the Company’s financial resilience

scenarios were created to simulate the impact arising from

the occurrence of the following principal risks:

1. Pandemic threat – the risk that the Company is forced to

close its shops to walk-in customers for three months as a

result of lockdown rules, and experiences subdued levels

of walk-in trade as the economy recovers. Delivery

channel sales are assumed to continue through the

lockdown months with a 50% increase in volume as

customers switch channels, as are ‘bake at home’ sales

through the Company’s wholesale relationship with

Iceland Foods. This forward scenario assumes that

Government support would continue to be available for the

support of employment and that relief from business rates

would be available during the periods of forced closure.

2. A brand-damaging food scare resulting in a significant

one-year sales reduction followed by gradual recovery

of confidence. In making assumptions the Directors

considered real examples of companies in the food sector

that had experienced such issues.

3. Temporary loss of production capacity for the Company’s

iconic pastry savoury products and the consequences for

liquidity as capacity is restored.

In each case the Directors reviewed the mitigating actions

that would be necessary to protect the Company’s liquidity.

These included:

– The temporary suspension of dividend payments in order

to preserve cash for operational use;

– Restriction of capital expenditure whilst protecting

essential infrastructure maintenance and commitments

to strategic investments;

– Access to Government support;

– Drawing on existing committed financing facilities; and

– Calling on the Company’s insurance arrangements on the

occurrence of an insured risk.

The scenarios tested were capable of being managed within

the Company’s existing, committed financing facilities. The

pandemic scenario presents by far the greatest financial

stress to the business, and this simulation does show a

breach to the fixed interest cover covenant at one reporting

date. Given the Company’s relationship with lenders, and the

actions of banks through the original Covid-19 pandemic, the

Directors believe it is reasonable to conclude that a waiver

would be secured.

Given the opening cash position in 2022 the Company does

have sufficient existing and committed financing facilities to

manage in a situation where multiple principal risk scenarios

occurred concurrently. This will likely not be the case in

future years as we increase capital expenditure and dividend

payments. In the event of multiple principal risk scenarios

occurring concurrently which necessitate additional

financing facilities the Directors believe that the borrowing

capacity of the Company would be sufficient to allow it

access to temporary additional facilities.

Based on the results of the analysis, the Directors have a

reasonable expectation that the Company will be able to

continue in operation and meet its liabilities as they fall due

over the three-year period of their detailed assessment.

Covid-19 pandemic response

The Covid-19 pandemic has continued to impact the business

throughout the year. Although our response has now become

part of our ‘business as usual’ process, a summary of

additional actions taken during the year to mitigate the risks

facing the business is set out below. We continue to prioritise

the safety, health and wellbeing of our customers and

colleagues.

– Government guidelines continue to be followed as a

minimum, with processes being amended as required to

reflect changes.

– Colleagues required to self-isolate have been supported.

– Where resource levels have been insufficient to operate

safely, we have reduced our operating hours, or closed

shops completely to allow us to consolidate our staff into

fewer shops.

– Central support teams have continued to work from home

where appropriate, to ensure that office capacity is

managed. Our homeworking guidance and associated

policies have been refreshed.

– We have moved to a blend of virtual and physical

meetings, to allow us to meet face-to-face where there

is a benefit in doing so.

– We have continued to engage with key external

stakeholders, including regulatory bodies, advisors and

Government agencies.

– Communication with our teams has continued, to ensure

that everyone is aware of changes to process and the

reasons behind them.

– Operational costs continue to be managed tightly across

the business.

– Our digital roll out has continued at pace, giving us access

to new customers via the Greggs App.

– Our partnership with Just Eat has been further expanded,

to cover more of our estate.

– We are taking additional opportunities to expand and

diversify our shop estate, for example, through increasing

our presence in Greater London and engaging with new

franchise partners to access travel locations.

We believe that our ongoing response to the pandemic

demonstrates the resilience and adaptability of the business.

The strategic report was approved by the Board of Directors

on 8 March 2022 and signed on its behalf by

Roger Whiteside

Chief Executive

8 March 2022

Annual Report and Accounts 2021Greggs plc

BOARD OF DIRECTORS AND SECRETARY

IAN DURANT

Chair

RICHARD HUTTON

FCA

Finance Director

ROGER WHITESIDE

OBE

Chief Executive

ROISIN CURRIE

CEO Designate

HELENA

GANCZAKOWSKI

Independent Non-Executive

Director

KATE FERRY

Independent Non-Executive

Director

MOHAMED ELSARKY

Independent Non-Executive

Director

SANDRA TURNER

Independent Non-Executive

Director

JONATHAN JOWETT

Company Secretary

and General Counsel

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Greggs plc

BOARD OF DIRECTORS AND SECRETARY CONTINUED

IAN

DURANT

Chair

ROGER

WHITESIDE

OBE

Chief Executive

RICHARD

HUTTON

FCA

Finance Director

ROISIN

CURRIE

CEO Designate

MOHAMED

ELSARKY

Non-Executive Director

Ian has a background in

international finance and

commercial management, with

experience in the retail, property,

hotels and transport sectors. His

career includes leadership roles

with the retail division of Hanson

and Jardine Matheson, Hongkong

Land, Dairy Farm International,

Thistle Hotels and SeaContainers

and as Finance Director of Liberty

International. Ian is an experienced

non-executive director of UK-listed

companies, having previously

served on the Boards of Westbury,

Home Retail Group and Greene King.

He was Chair of Capital and

Counties Properties plc between

2010 and 2018.

Roger began his career at Marks

and Spencer where he spent 20

years, ultimately becoming head of

its food business. He was then one

of the founding team of Ocado,

serving as Joint MD from 2000 to

2004. From 2004 to 2007 Roger led

a successful turnaround as Chief

Executive of the Thresher Group

off-licence chain before joining

Punch Taverns, ultimately

becoming Chief Executive. Roger

was appointed as Chief Executive

of Greggs on 4 February 2013, and

awarded an OBE for services to

Women and Equality in the 2019

New Year Honours List.

Richard qualified as a Chartered

Accountant with KPMG and gained

career experience with Procter

and Gamble before joining Greggs

in 1998.

Roisin currently holds the position

of CEO Designate, having been

appointed to the Board on

1 February 2022 from the role of

Retail and Property Director. Prior

to joining Greggs in 2010, Roisin

worked at Asda where she held

People Director roles responsible

for the organisation’s retail and

distribution operations.

Mohamed is an experienced

international food manufacturing

executive, who has held senior

positions in Kellogg, Danone and

Godiva Chocolatier. He is currently

Executive Chair of Artisan du

Chocolat, and has previously held

non-executive director positions

including at Nomad Foods, a

company listed on the New York

Stock Exchange.

Appointed since

5 October 2011

Appointed since

17 March 2008 (Non-Executive

Director until 3 February 2013)

Appointed since

13 March 2006

Appointed since

1 February 2022

Appointed since

21 June 2021

Independent

Yes

Independent

n/a

Independent

n/a

Independent

n/a

Independent

Yes

Committee membership

Chair of Nominations Committee.

External appointments

Chair of DFS Furniture plc.

Non-Executive Chair – Warren

Partners & Director of Employee

Ownership Trust.

External appointments

Member of the Women’s Business

Council. Non-Executive Director

of Card Factory plc.

External appointments

Non-Executive Director and Chair

of the Audit Committee of The

Lakes Distillery Company plc.

Trustee Director of Business in

the Community. Trustee of

Greggs Foundation.

External appointments

Chair of the Employers Forum

For Reducing Re-offending.

Committee membership

Audit, Remuneration and

Nominations Committees.

External appointments

Executive Chair Artisan du Chocolat

Annual Report and Accounts 2021Greggs plc

BOARD OF DIRECTORS AND SECRETARY CONTINUED

KATE

FERRY

Non-Executive Director

HELENA

GANCZAKOWSKI

Non-Executive Director

SANDRA

TURNER

Non-Executive Director

JONATHAN

JOWETT

Company Secretary & General Counsel

Kate is CFO at McLaren Group. Prior to that

Kate was CFO of TalkTalk Group plc, having

previously held positions on the Dixons

Carphone plc Executive Committee,

originally joining the Carphone Warehouse

Group plc in 2010 as Corporate Affairs

Director to facilitate the demerger

from TalkTalk.

Kate began her career in audit with

PricewaterhouseCoopers, qualifying as

a Chartered Account before moving to

Merrill Lynch as a Director within the retail

sector equity research team, where she

spent the next ten years.

Helena worked for Unilever for 23 years

and held senior positions in brand

management and marketing, including

UK Marketing Director and ultimately

Head of Global Agencies. Helena has

a PhD in Engineering from the University

of Cambridge.

Sandra has been involved in the retail

sector throughout her career and was

employed by Tesco PLC, latterly as

Commercial Director for Tesco Ireland,

from 1987 to 2009. Prior to this she worked

in sales and marketing roles for Unilever

and Wilkinson Sword.

Sandra has held a number of non-

executive directorships in UK-listed

companies, including McBride plc

and Countrywide PLC

Jonathan is a lawyer by profession

and has held the position of Company

Secretary for a number of FTSE 250

and FTSE Smallcap companies.

His previous employers include Avon

Cosmetics Limited, SSL International plc,

Wagon plc and Bakkavor Group.

Appointed since

1 June 2019

Appointed since

2 January 2014

Appointed since

1 May 2014

Appointed since

12 May 2010

Independent

Yes

Independent

Yes

Independent

Yes

Independent

n/a

Committee membership

Chair of Audit Committee. Remuneration

and Nominations Committees member.

External appointments

CFO McLaren Group.

Committee membership

Chair of Remuneration Committee. Member

of Audit and Nominations Committees.

External appointments

Senior Independent Non-Executive Director

and Remuneration Committee Chair of Croda

International Plc. Owner and manager of a

consulting business working at a global level

with multi-national food businesses, helping

them to develop and implement strategies.

Committee membership

Senior Independent Non-Executive

Director and Non-Executive Director

having oversight of colleague

engagement. Member of Remuneration,

Audit and Nominations Committees.

External appointments

Non-Executive Director of Huhtämaki OYJ.

Committee membership

Secretary to Board and all its Committees.

External appointments

Member of the British Retail Consortium

Policy Board. Senior Independent

Non-Executive Director of Newcastle

Hospitals NHS Foundation Trust.

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Greggs plc

The Nominations Committee uses a skills matrix

as it assesses the requirements for new recruits.

This is shown below, with incumbents’ attributes:

Ian

Durant

Kate

Ferry

Helena

Ganczakowski

Mohamed

Elsarky

Sandra

Turner

Roger

Whiteside

Richard

Hutton

Roisin

Currie

UK PLC Executive Director experience

UK PLC Non-Executive Director

outside Greggs

Finance/banking

Mergers and acquisitions

HR and Remuneration Committee experience

Food manufacturing experience

Food retailing experience

Food safety, Health and safety

International experience

Broader consumer sector experience

Marketing expertise

Digital expertise

Gender diversity

Ethnicity diversity

Corporate governance

BOARD OF DIRECTORS AND SECRETARY CONTINUED

Annual Report and Accounts 2021Greggs plc

GOVERNANCE REPORT – CHAIR’S INTRODUCTION

” BENCHMARKING

SUGGESTS THAT

THE BOARD IS

HIGHLY EFFECTIVE.“

Grant Thornton

Board evaluation report

January 2022

Annual Report and Accounts 2021

STRATEGIC REPORT ACCOUNTS

Greggs plc

DIRECTORS’ REPORT

GOVERNANCE REPORT CONTINUED

Dear Shareholder,

Welcome to my introduction to the Governance section of

our 2021 annual report. As in 2020, much of our governance

focus has been on the health and safety of our colleagues

and customers and our ongoing response to the pandemic.

You can see from the table on page 73 that this has not

prevented us from overseeing a significant schedule of

business across the year, which has included Board

recruitment, operational updates and a strategic review

which was shared with shareholders in October.

Board composition and roles

Our Nominations Committee has had a busy year, appointing

both Executive and Non-Executive Directors. As I note in my

main statement at the front of this annual report, there is

more to do as we execute our succession plan by recruiting

additional Non-Executive Directors, and later in the year,

seeking a new Chair to replace me, in respect of which our

Senior Independent Director, Sandra Turner, will take the

lead. More information is set out in on pages 71 and 72.

The planning for our search for a new Chief Executive

commenced in 2019, but activity was suspended with the

onset of the pandemic. During 2021, in my conversations with

some of our largest institutional shareholders, I indicated

that we hoped to be making progress in the year, and that I

had been asked by the Board to remain as Chair beyond my

nine-year term on the Board to complete the succession.

As noted above, I anticipate stepping down later in 2022,

with a longstop date of our annual general meeting in 2023.

We were delighted to announce on 6 January 2022 the

appointment of Roisin Currie as our future Chief Executive.

Details of the appointment process are set out in this

report, and it is proposed that Sandra and I will meet with

institutional shareholders who would like to hear more

detail of the search.

We welcomed Mohamed Elsarky as a Non-Executive Director

in June, replacing Peter McPhilips who stood down after

seven years’ service. Otherwise all of the Directors served

throughout the year. Sandra Turner volunteered to take on

Peter’s role as our Non-Executive Director having oversight

of colleague engagement, and there is more information on

our activities and decisions on page 73.

Board operations and responsiveness

As the waves of Covid-19 have ebbed and flowed, we have

adjusted our Board arrangements to suit. At the start of

the year, our meetings were held virtually, but we were

delighted to be able to get together for our annual strategy

meeting in early summer, and for our meetings for the

remainder of the year. We were together in September,

when we toured our new state-of-the-art frozen food

distribution centre, and again in November when we

visited our savoury production facility.

The partial relaxation of Covid restrictions has also meant

that we have been able to resume our individual visits to

our shops, speaking to colleagues and learning how the

pandemic has affected them. We will be building on this

through 2022 as we hope society and business learn to

live with the legacy of the Covid-19 pandemic.

We undertook an externally facilitated evaluation of our

Board and practices towards the end of the year, and

appointed Grant Thornton (who have no connection with

the Company or any individual Director) to assist with this.

Further detail is set out on page 72. Whilst we were happy

that the Board is considered ‘highly effective’, there are

certainly areas for development, and with Board changes

in prospect over the next 18 months, Grant Thornton’s

report and suggestions will provide a useful focus.

Our people

The Board is cognisant that our decisions affect the lives of

our 25,000 employees and their dependents as well as those

of our many suppliers and contractors. Thankfully we have

not had to repeat the restructuring activity undertaken in

November 2020, and as we have opened up more shops and

reintroduced pre-pandemic shift patterns, we have been

recruiting people into the business.

Annual Report and Accounts 2021Greggs plc

GOVERNANCE REPORT CONTINUED

Culture

The way that our culture pervades the organisation is,

I believe, a fundamental tenet of the sustained success

that Greggs has achieved over recent years. It is a feature

of every recruitment that we undertake, to ensure that we

maintain our values of friendliness, inclusivity, honesty,

respectfulness, being hardworking and appreciative of

everyone. It is sometimes easy to underestimate the impact

of this when reading words in annual reports, but it is quickly

evident to anyone who joins or engages with the business.

We recognise that culture is not immutable and nor is it

consistent across a business of our size, and the Board

will continue to monitor this closely and challenge

ourselves accordingly.

Stakeholder engagement

We have continued throughout the year to engage with

colleagues, and examples of the sessions attended by

Directors are detailed on page 48. The Board has been kept

informed of the developments in the business for listening

to colleagues from minority sections of our workforce,

including groups set up to hear about ethnicity, gender and

sexual orientation, and how working for Greggs can have

both a positive and negative impact on our colleagues from

these parts of our society. We are committed to doing more

to hear from and support all colleagues in the hope that they

will recognise Greggs as a ‘great place to work’. Our diversity

and inclusion activities are among the ten commitments

launched in 2021 as part of The Greggs Pledge, and we are

pleased to be able to report good progress in this report.

We incorporate by reference pages 45 to 54 of this annual

report which set out how the Directors have met their

obligations under s172 Companies Act 2006.

At the beginning of 2021, our Remuneration Committee sought

the views of a number of institutional shareholders and proxy

agencies regarding the possibility of exercising its discretion

by allowing the vesting of a proportion of share-based awards,

even though financial performance criteria had not and

could not have been met as a result of the pandemic. Our

management teams had worked incredibly hard during 2020,

to overcome the significant impact of the pandemic, and the

Remuneration Committee was of the view that soundings be

taken from shareholders in the interests of fairness. Despite

support from a number of shareholders, it was clear that, on

balance, the Committee was unlikely to gain sufficient support

for the proposal and therefore it was not pursued.

Committees

As noted above our Nominations Committee has had a

busy year, as have other committees. Our Audit Committee

oversaw the appointment of RSM as our Auditor, replacing

KPMG after many years’ support.

The Greggs Pledge

Our commitment to developing our approach to economic,

social and governance (ESG) principles mainly comes in

the form of our Greggs Pledge commitments, which were

published in February 2021, and on which we provide our

first full update on progress on page 37 of this report and in

the separately published Greggs Pledge report 2021.

We are seeing increased interest in our approach to ESG

from a variety of stakeholders, and we will be building our

engagement levels, particularly as we set out on our journey

towards achieving net zero carbon in the years to come.

As an important milestone, we will now set science-based

targets for achieving our contribution to the reduction in

carbon emissions that is needed to protect

the future.

Our AGM 2022

Over the past two years we have greatly missed the

shareholders who regularly come to our annual general

meeting held in our native North East, and we hope that we

will be able to welcome as many as possible to our meeting

which will be held on 17 May 2022. We are planning for that

meeting to be ‘in person’ for the first time since 2019,

although we will have contingency plans in place should

the pandemic take its toll for a third year.

As always, I invite you to review the following pages which

set out how we have complied with the UK Corporate

Governance Code (2018) (which is available at www.frc.org.uk)

across the year, and also our statement on pages 45 to 54

describing how the Directors have fulfilled their duties to

our key stakeholders under section 172 of the Companies

Act 2006.

Ian Durant

Chair

8 March 2022

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Greggs plc

GOVERNANCE REPORT CONTINUED

Division of responsibility

The Board considers that all of the Non-Executive Directors

are independent. Sandra Turner is the Senior Independent

Director, and meets with the other Non-Executive Directors

in the absence of the Chair at least once per year. There is a

written statement of the responsibilities of the Senior

Independent Director, duly approved by the Nominations

Committee and the Board.

There is a clear written statement of the division of

responsibilities between the Chair and the Chief Executive,

and the Chair is considered by all of the Board to have been

independent on his appointment, and that he remains so.

As was highlighted in the annual report for 2020, and

following an informal consultation with a number of major

shareholders, the Board had asked the Chair to remain in

post beyond the nine years now expected of a Non-Executive

Director under the corporate Governance Code. This was to

enable him to oversee the process of the recruitment of a

new Chief Executive during 2021, and during a transition

period in 2022. Ian Durant was appointed as a Non-Executive

Director in December 2011, becoming Chair in May 2013, and

so has now been on the Board for ten years and three months

as at the date of this report. In this respect, the Company is

not compliant with Provision 19 of the Corporate Governance

Code. As set out later in this report, it is anticipated that in

2022 a new Chair will be appointed allowing Ian to step down.

Away from the Boardroom the Chair communicates regularly

with the Non-Executive Directors, both collectively and

individually, giving them plenty of opportunity to express

their opinions and raise any concerns that they may have.

The Board has three main committees, being Audit,

Remuneration and Nominations, details of which are set out

later in this report. Each committee has its own set of terms

of reference, which are reviewed at least annually to ensure

that they are compliant with the code and meet current

best practice.

During the year, the Board generally schedules six formal

meetings, and then on an ad hoc basis as required. Board

meetings are well attended, and Board and committee

attendance is set out in the following table:

Attendance

Main

Board

Audit

Committee

Remuneration

Committee

Nominations

Committee

Ian Durant 7/7 – – 9/9

Roger Whiteside 7/7 – – –

Richard Hutton 7/7 – – –

Helena Ganczakowski 7/7 4/4 6/6 8/9

Kate Ferry 7/7 4/4 5/6 9/9

Sandra Turner 7/7 4/4 6/6 9/9

Mohamed Elsarky 4/4 2/2 2/3 2/5

Peter McPhillips 3/5 2/3 2/4 4/5

Notes:

Mohamed Elsarky joined the Board on 21 June 2021. For a period towards the end

of the year he was undergoing medical treatment in Australia and was not able to

attend all of the scheduled Nominations and Remuneration Committees.

Roisin Currie joined the Board on 1 February 2022, and consequently was

not present at Board meetings during the year other than as an attendee

on various topics.

Peter McPhillips stepped down from the Board on 31 July 2021. He did not attend

the strategy meeting held in June 2021, and was absent during a suite of meetings

held in May for personal health reasons.

Board composition, succession and evaluation

During the year, there were two changes to the Board of

Directors. Peter McPhillips stepped down from the Board

on 31 July 2021, and Mohamed Elsarky joined the Board on

21 June 2021 ahead of the two-day strategy meeting.

Since the turn of the year, on 6 January 2022 the Board

announced that Roisin Currie, its then Retail and Property

Director would join the Board on 1 February 2022 as CEO

Designate, and would become Chief Executive following the

AGM scheduled for 17 May 2022. Roger Whiteside gave notice

of his retirement from the Company on 5 January 2022, and

he will step down from the Board following the AGM, and leave

the Company on 5 January 2023.

NON-EXECUTIVE

DIRECTOR INDUCTION

In June 2021, the Board appointed Mohamed

Elsarky as an Independent Non-Executive

Director. Details of Mohamed’s background

are set out on page 65.

As part of the appointment of any new Director, a

number of engagements with colleagues are set

up to familiarise the Director with all operations,

including those in shops, at production and

distribution sites, and at Head Office. On joining

the Board, Mohamed was taken around a variety

of Greggs and competitor shops by the Retail

Director and a Head of Retail, and around a supply

site and a distribution centre with the Supply

Chain Director. Mohamed also met with all of

the Operating Board Directors and members of

their teams.

Once a new Non-Executive Director has been on

the Board for around six months, they are asked to

present to the Board their ‘first impressions’. This

provides feedback on strategy, processes and

procedures including the induction process, and a

view on key strategic priorities for the future. This

facilitates further debate and discussion around

the Board table, with agreed areas for attention in

the coming months. In particular it helps identify

areas within the induction process where greater

or lesser focus may be appropriate.

Annual Report and Accounts 2021Greggs plc

GOVERNANCE REPORT CONTINUED

The Board will continue through a period of change, and

is now setting about recruiting at least one further Non-

Executive Director in the first half of 2022, to replace Helena

Ganczakowski and Sandra Turner whose terms expire in

2023 having then served for nine years on the Board. Sandra

will lead the Nominations Committee in the appointment of a

new Chair, expected to occur during the second half of 2022.

The Nominations Committee’s responsibilities are set out in

written terms of reference, available on the Company’s

website. Its primary responsibility is to ensure plans are in

place for orderly succession to the Board and Operating

Board. The Board Chair is chair of the Committee, and all

Non-Executive Directors are members. The Chief Executive

is a regular attendee at meetings, and from time to time the

Finance Director is also invited. The CEO Designate will also

be in attendance on occasion.

During 2021, the Nominations Committee was tasked with

recruiting a new Chief Executive, anticipating that Roger

Whiteside would wish to retire before reaching the age of 65.

The Nominations Committee appointed Heidrick & Struggles

(who have no connection with the Company or any individual

Director) to advise and assist in the search for a Chief

Executive. The key stages of that process are set out below,

and consisted of:

– A market mapping exercise to determine the candidate pool.

– The identification of 20 potential candidates, with 13 of

the 20 being approached to determine their interest, and

eight of the 13 being interviewed by Heidrick & Struggles.

– The Chair undertook a first meeting with eight external

candidates, three of which were female, before the external

selection was reduced to four contenders, who were met by

Sandra Turner and Helena Ganczakowski, and two

candidates were put forward to meet with the remaining

members of the Nominations Committee, Kate Ferry and

Mohamed Elsarky. External candidates were also measured

against the Heidrick & Struggles Culture Assessment

undertaken by the Board towards the end of 2020.

– At this point, an internal candidate, Roisin Currie, joined

the process.

– The two external candidates, one male, one female then

met Roger Whiteside, Chief Executive, and Richard

Hutton, Finance Director, for information gathering

purposes which included a discussion about the culture

and values within Greggs.

– Heidrick & Struggles interviewed the internal candidate

and drafted their confidential candidate report, and the

candidate had further interviews with the Chair and

Non-Executive Directors.

– All final candidates undertook psychometric testing

with a professionally-qualified psychologist partner at

Heidrick & Struggles who presented the results of the

psychometrics to the Non-Executive Directors.

– Finally, each of the three candidates gave a 90-minute

in-person presentation to the Non-Executive Directors,

plus the Chief Executive.

– A preferred candidate was identified, and negotiations

commenced, ultimately leading to an announcement.

The Nominations Committee has a ‘skills matrix’ which it

uses to assess the requisite skills that are needed on the

Board, and this is to be re-assessed by Heidrick & Struggles

ahead of the commencement of the further searches

for Non-Executive Directors and Chair in the coming 12

months. The Nominations Committee has considered the

contribution of each of the Directors, and has confirmed

to the Board that, save in respect of Roger Whiteside who

will step down from the Board, the Board recommends

their re-appointment at the annual general meeting.

It goes without saying that the Board recommends that

shareholders elect Roisin Currie as a Director at the annual

general meeting, following which she will be appointed as

Chief Executive.

During the year, the Board received a presentation from the

Chief Executive on the succession plan for Operating Board

Directors, to include a review of potential candidates, and

their proximity to being ready to take up an appointment as

and when appropriate. This plan was used to determine the

appointments to the Operating Board of a new Retail Director

and a Property Director, both of whom were internal

appointments, following Roisin’s elevation to CEO Designate.

Board evaluation and focus

As required by the Corporate Governance Code, the Board

undertakes an annual evaluation of its activities, and in 2021,

following an informal tender process run by the Company

Secretary (who kept the Chair apprised of his activities), it

appointed Grant Thornton to provide external facilitation of

that evaluation. This represented a change of adviser from

the Board’s two previous externally facilitated evaluations,

both of which had been conducted by Nigel Davies of NJMD

Corporate Services.

The process agreed between the Board and Grant Thornton

consisted of:

– A survey undertaken using a Board Clic questionnaire,

completed by all members of the Board, plus the Company

Secretary, and also a shorter more specific questionnaire

completed by all Operating Board Directors.

– A review of key governance documentation and

Board papers.

– An interview with all Directors, the Company Secretary,

and Operating Board Directors.

– Attendance at a suite of Board and Committee meetings

held in person (and also observed online).

– Review meetings with the Chair and Company Secretary.

– The circulation of a detailed report and presentation of

key findings at a Board meeting.

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Greggs plc

GOVERNANCE REPORT CONTINUED

The Board then met to discuss and agree an action plan

prepared by the Company Secretary.

Grant Thornton concluded that there are three key areas

for the Board to develop its action plan, being:

– Reviewing the Board’s balance of focus between

operational activities and the strategic long-term

success drivers.

– An assessment of the assurance that the Board can

gain that there are capacity and skills in the organisation

to implement and execute strategic plans.

– Documenting how the Board considers its appetite

for risk.

In summary however, Grant Thornton reported that:

“Benchmarking data suggests the Board is highly effective,

… and that there is clear evidence of this …given the Board’s

achievements over the past five years.”

In benchmarking the 2020 annual report, Grant Thornton

concluded that “key areas of strength include Board

leadership and purpose where Greggs is one of the top

five organisations within the FTSE 350.”

The Board made a number of key decisions across the year,

including a phased commitment to achieving net zero carbon

emissions, and monitoring the implementation of the

systems and processes needed to implement Natasha’s Law.

Further details of certain matters considered by the Board

during the year are set out in the table on this page.

Matters considered across the year:

January Budget, risk review, evaluation outcomes,

annual report

March Next Generation Greggs with a focus on the

evolving delivery arrangements with Just Eat,

AGM plans, new articles, pension scheme

funding and the preliminary results

May Supply chain review including SAP rollout, Triton

cold store progress, the shop production and

allergen labelling system (Natasha’s Law),

information security update, review of The

Greggs Pledge progress and planning for an

externally facilitated Board evaluation.

Appointment of Mohamed Elsarky as a

Non-Executive Director

June Board strategy including review of five-year plan

July Review of strategy day actions, RCF review,

interim results, and confirmation of Non-

Executive Director with colleague engagement

oversight

September Broking report and share register review, Covid

insurance claim litigation, succession planning

and franchise partners review

November Investor relations strategy development,

Diversity & Inclusion programme update and

report on employee opinion survey outcomes,

Greggs Foundation update, first thoughts of

Mohamed Elsarky after six months on the

Board, food safety and health & safety

performance review

December/

January

Appointment of new Chief Executive

Diversity & inclusion

The Board as a whole, rather than the Nominations

Committee, monitors the gender balance in the Company.

69% of our employees are women, with female workers

largely within retail shops. There is a strong representation

of women at the most senior level. Of the five Non-Executive

Directors (including the Chair) three are female, placing

us 7th in the FTSE 250. Greggs will be one of 19 FTSE 350

companies to be led by a female Chief Executive. At

Operating Board level, including the three Executive

Directors, four out of 12* are women and approximately 46%

of roles reporting into an Operating Board Director are held

by women. Until his anticipated retirement from the Board

on 17 May, our Chief Executive Roger Whiteside sits on the

Women’s Business Council. Further information on our

statutory gender reporting can be found on page 44.

In 2021, whilst working towards achieving the National

Equality Scheme accreditation, we worked with EY who

undertook a survey to assess our cultural health across

different demographic groups. The findings from that work

concluded that:

– Greggs values are well embedded, and consistently

appeared in the top ten current cultural traits selected

across all demographic groups; and

– There is very little difference in the current cultural health

and experience between different demographic groups.

The culture of Greggs is especially important, and we know

we cannot be complacent in this area. We will continue to

focus on understanding our culture, and how we can measure

its progress through our annual engagement survey.

* following Roger Whiteside stepping down as Chief Executive on 17 May 2022,

the ratio will be four women out of 11 members of the Operating Board

Annual Report and Accounts 2021Greggs plc

GOVERNANCE REPORT CONTINUED

We expanded our colleague networks and listening groups in

2021. Our LGBTQ+ colleague network continued to grow and

expanded to include colleagues from Retail and Supply. We

also set up groups for our ethnically diverse colleagues and

those colleagues with disabilities, each sponsored by

members of the Operating Board. All these sessions have

allowed us to gather valuable feedback and insight into the

way we do things at Greggs and how we can be more

inclusive of colleagues from minority groups.

A more comprehensive outline of our achievements can

be found on page 49 and in The Greggs Pledge report

available at corporate.greggs.co.uk/responsibility/

the-greggs-pledge.

As part of the DTR 7.2.8A disclosure, pages 36, 37 and 49

are incorporated by reference into this Directors' report.

Other disclosures

Directors and their interests

The names of the Directors in office during the year, together

with their relevant interests in the share capital of the

Company at 2 January 2021 and 1 January 2022 are set out in

the Directors’ remuneration report on page 104. Details of

the Directors’ share options are set out in the Directors’

remuneration report on page 103.

Directors’ indemnities and conflicts

As at the date of this report, indemnities are in force under

which the Company has agreed to indemnify the Directors,

to the extent permitted by law, in respect of losses arising

out of, or in connection with, the execution of their duties,

powers or responsibilities as Directors of the Company. The

indemnities do not apply in situations where the relevant

Director has been guilty of fraud or wilful misconduct.

Under the authority granted to them in the Company’s

articles of association, the Board has considered carefully

any situation declared by any Director pursuant to which

they have or might have a conflict of interest and, where

it considers it appropriate to do so, has authorised the

continuation of that situation. In exercising their authority,

the Directors have had regard to their statutory and other

duties to the Company. All Directors have access to the

Company Secretary as and when required.

Substantial shareholdings

At 7 March 2022 the only notified holdings of substantial

voting rights in respect of the issued share capital of the

Company (which may have altered since the date of such

notification, without any requirement for the Company to

have been informed) were:

Shareholder

Number of shares

held

Percentage of

issued share

capital

Royal London Asset Management 6,147,139 6.03%

Blackrock, Inc 5,514,881 5.40%

MFS Investment Management 5,049,548 4.95%

Aviva plc 3,900,428 3.83%

Additional information

– Future business developments: details of future business

developments can be found throughout the strategic

report on pages 1 to 63.

– Financial risk management: details of our financial risk

management policies and objectives can be found in

Note 2 of the accounts.

– The information set out within the governance report in

pages 68 to 76 forms part of the Directors’ report.

– Greenhouse gas emissions: All disclosures concerning

the Group’s greenhouse gas emissions (as required to be

disclosed under the Companies Act 2006 (strategic report

and Directors’ report) Regulations 2013) are contained in

the sustainability report on page 43.

– Dividends: details of the dividends declared and paid are

given in Note 23 of the accounts.

Non-financial reporting regulations

The information required by sections 414CA and 414CB of the

Companies Act 2006 is included within the strategic report

on pages 1 to 63 and the Directors’ report on pages 64 to 107.

Authority to purchase shares

At the AGM on 14 May 2021, the shareholders passed a

resolution authorising the purchase by the Company of its

own shares to a maximum of 10,150,000 ordinary shares of

two pence each.

That authority had not been used as at 1 January 2022.

The authority remains in force until the conclusion of the

AGM in 2022 or 13 August 2022, whichever is the earlier.

It is the Board’s intention to seek approval at the 2022 AGM

for the renewal of this authority.

Takeover directive information

Following the implementation of the European Directive on

Takeover Bids by certain provisions of the Companies Act

2006, the Company is required to disclose certain additional

information in the Directors’ report. This information is set

out below:

– The Company has one class of share in issue being

ordinary shares of 2 pence each. As at 8 March 2022, there

were 101,899,371 such ordinary shares in issue. There are

no shares in the Company that grant the holder special

rights with regard to the control of the Company;

– At general meetings of the Company, on a show of hands,

every shareholder present in person or by proxy has one

vote only and, in the case of a poll, every shareholder

present in person or by proxy has one vote for every

share in the capital of the Company held;

– The Company’s articles of association set out the

circumstances in which shares may become

disenfranchised. No shareholder is entitled, unless the

Directors otherwise determine, in respect of any share

held to be present or vote at a general meeting either

personally or by proxy (or to exercise any other right in

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Greggs plc

GOVERNANCE REPORT CONTINUED

relation to meetings of the Company) in respect of that

share in certain circumstances if any call or other sum

is payable and remains unpaid, if the shareholder is in

default in complying with a duly-served notice under

section 793(1) of the CA 2006 or if any shareholder has

failed to reply to a duly-served notice requiring them

to provide a written statement stating they are the

beneficial owner of the shares;

– A notice convening a general meeting can contain a

statement that a shareholder is not entitled to attend and

vote at a general meeting unless their name is entered

on the register of members of the Company at a specific

time (not more than 48 hours before the meeting) and if

a shareholder’s name is not so entered, they are, not

entitled to attend and vote;

– Under the Company’s articles of association the Directors

may, in their absolute discretion, refuse to register the

transfer of a share in certified form in certain

circumstances where the Company has a lien on the share

(provided that the Directors do not exercise their

discretion so as to prevent dealings in partly paid shares

from taking place on an open and proper basis), where a

shareholder has failed to reply to a duly-served notice

under section 793(1) CA 2006 or if a transfer of a share is

in favour of more than four persons jointly. In addition,

the Directors may decline to recognise any instrument of

transfer unless it is in respect of only one class of share

and is deposited at the address at which the register of

members of the Company is held (or at such other place

as the Directors may determine) accompanied by the

relevant share certificate(s) and such other evidence as

the Directors may reasonably require to show the right of

the transferor to make the transfer. In respect of shares

held in uncertificated form the Directors may only refuse

to register transfers in accordance with the

Uncertificated Securities Regulations 2001 (as amended

from time to time);

– Under the Company’s code on dealings in securities in the

Company, persons discharging managerial responsibilities

and some other senior executives may in certain

circumstances be restricted as to when they can transfer

shares in the Company;

– There are no agreements between shareholders known

to the Company which may result in restrictions on the

transfer of shares or on voting rights;

– Where, under an employee share plan operated by the

Company, participants are the beneficial owners of

shares but not the registered owner, the voting rights

are normally exercised by the registered owner at the

direction of the participant;

– The Company’s articles of association may only be

amended by special resolution at a general meeting

of the shareholders;

– The Company’s articles of association set out how

Directors are appointed and replaced. Directors can be

appointed by the Board or by the shareholders in a general

meeting. At each annual general meeting, any Director

appointed by the Board since the last annual general

meeting must retire from office but is eligible for election

by the shareholders. Furthermore, the Board has resolved

that, in line with Corporate Governance Code (2018

revision), all the Directors will be subject to annual

re-election by shareholders. Under the CA 2006 and

the Company’s articles of association, a Director can

be removed from office by the shareholders in a

general meeting;

– The Company’s articles of association set out the powers

of the Directors. The business of the Company is to be

managed by the Directors who may exercise all the powers

of the Company and do on behalf of the Company all such

acts as may be exercised and done by the Company and

are not by any relevant statutes or the Company’s articles

of association required to be exercised or done by the

Company in general meeting, subject to the provisions

of any relevant statutes and the Company’s articles of

association and to such regulations as may be prescribed

by the Company by special resolution;

– Under the CA 2006 and the Company’s articles of

association, the Directors’ powers include the power to

allot and buy back shares in the Company. At each annual

general meeting resolutions are proposed granting and

setting limits on these powers;

– The Company is not party to any significant agreements

which take effect, alter or terminate upon a change in

control of the Company, following a takeover bid; and

– There are no agreements between the Company and its

Directors or employees providing for compensation for

loss of office or employment (whether through

resignation, purported redundancy or otherwise) that

occurs because of a takeover bid. Details of the Directors’

service agreements and terms of appointment are set

out in the Directors’ remuneration report on page 93.

However, provisions in the employee share plans

operated by the Company may allow options to be

exercised on a takeover.

Significant relationships

The Group does not have any contractual or other

relationships with any single party which are essential to the

business of the Group and, therefore, no such relationships

have been disclosed.

Annual Report and Accounts 2021Greggs plc

GOVERNANCE REPORT CONTINUED

Colleagues

What makes Greggs so special is its culture – the way our

people behave and support each other. We want everyone to

feel welcome at Greggs and our colleagues to be able to be

themselves at work, whatever their background, preferences,

or views. In the event our colleagues require adjustments to

be made to support their employment then every effort will be

made to ensure they are supported. Greggs is committed to

creating a work environment free of discrimination, bullying,

harassment and victimisation, where everyone is treated

equally with dignity and respect. This applies in all aspects of

employment including, recruitment and selection, promotion,

transfer, training or other developmental opportunities, pay

and benefits, other terms of employment, discipline and

selection for redundancy.

Accountability, audit and going concern

The Board acknowledges its responsibility to present a fair,

balanced and understandable assessment of the Company’s

position and prospects. In order to assist the Board to

comply with the requirements within the Corporate

Governance Code, each year the Audit Committee is

requested to undertake an assessment of the annual report

and to make a recommendation to the Board. This request

has been enshrined within the Audit Committee’s terms of

reference, which are available at corporate.greggs.co.uk.

The actions undertaken by the Audit Committee in confirming

its advice to the Board included the consideration of a

detailed review that has been undertaken by the Head of

Business Assurance and reviewing the annual report as a

whole to confirm that it presents a fair, balanced and

understandable assessment. In considering the advice of

the Audit Committee, and having reviewed the annual report

including the contents of the strategic report on pages 1 to 63,

together with the statutory accounts themselves, the Board

duly considers the annual report and accounts, taken as a

whole, is fair, balanced and understandable, and provides the

necessary information for shareholders to assess the

Company’s performance, business model and strategy.

A statement of Directors’ responsibilities in respect of the

preparation of accounts is given on page 107. A statement

of auditor’s responsibilities is given in the report of the

auditor on page 113.

After making enquiries, the Directors have a reasonable

expectation that the Group has adequate resources to

continue in operational existence for the foreseeable

future. For this reason, they continue to adopt the going

concern basis in preparing the accounts (see basis of

preparation on page 125). The Board’s viability statement

made in accordance with Corporate Governance Code

Provision 31 can be found on page 63.

Policies

Freedom of association

At Greggs, we recognise the right of all employees to

freedom of association and collective bargaining. Whilst

we do not have a formal Freedom of Association policy, the

Company encourages all its employees in supply sites, shops

and offices to become, and remain, members of a union.

Bribery and corruption

Greggs has an Anti-Bribery and Corruption policy which

applies to all employees and prohibits the offering, giving,

seeking or acceptance of any bribe in any form to any person

or company by acting on its behalf, in order to gain an

advantage in an unethical way.

Business conduct

We have a specific policy that sets out the standards of

ethical behaviour that are expected of all employees.

All graded managers, and members of the procurement

department, are required to make an annual confirmation

of their compliance with the policy.

Whistle-blowing

Our ‘whistle-blowing’ policy creates an environment where

employees are able to raise concerns without fear of

disciplinary action being taken against them as a result of any

disclosure. Any matters raised are treated in confidence and an

independent review will be undertaken where it is appropriate.

The Chair of the Audit Committee is the designated first point

of contact for any concerns which cannot be addressed

through normal management processes.

Political donations

Greggs has a clear policy forbidding political donations

or contributions. This includes financial and in-kind

contributions made by the Company.

Disclosure of information to the auditor

Each of the Directors who held office at the date of

approval of this Directors’ report confirms that, so far

as they are individually aware there is no relevant audit

information of which the Company’s auditor is unaware

and that they have taken all the steps that they ought to

have taken as a Director to make themselves aware of

any relevant audit information and to establish that the

Company’s auditor is aware of that information.

By order of the Board

Jonathan D Jowett

Company Secretary

8 March 2022

Greggs plc (CRN 502851)

Greggs House, Quorum Business Park

Newcastle upon Tyne

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Greggs plc

AUDIT COMMITTEE REPORT

Dear Shareholder

As Chair of the Audit Committee, I am

pleased to present the Committee’s report

for the 52 weeks ended 1 January 2022.

The Committee plays an important part in the governance

of the Company with its principal activities focused on the

integrity of financial reporting, quality and effectiveness of

internal and external audit, risk management and the system

of internal control.

In this report, I aim to share some of the Committee’s

discussions from the year, providing insight regarding the

role of the Committee, the main matters considered by it

during the year and the conclusions drawn. The Committee

meets formally at key times within the reporting calendar

and the agendas for its meetings are designed to cover

all significant areas of risk over the course of the year and

to provide oversight and challenge to the key financial

judgements, controls and processes that operate within

the Company.

The Committee continues to keep its activities under review

in the light of regulatory developments and the emergence

of best practice.

During 2021 it has continued to ensure that the impact of

the ongoing pandemic and the Company’s recovery from

it is clearly reported and accounted for. It has overseen the

transition of external auditor from KPMG LLP to RSM UK

Audit LLP. It has also overseen a review of the Company’s

risk management processes, facilitated by Marsh Advisory,

which has resulted in the implementation of a new ‘enterprise

risk management’ model.

The Committee has also overseen the production of the

Company’s first report in line with the requirements of the

Task Force on Climate-related Financial Disclosures (TCFD)

which is set out on 38 to 43.

Key topics for consideration by the Committee in 2022 will

be the review of auditor performance after the first full audit

cycle for RSM, the continuing development of our enterprise

risk management model and the further development of the

Company’s ESG reporting.

Overall, I am satisfied that the activities of the Committee

enable it to gain a good understanding of the key matters

impacting the Company during the year along with oversight

of the governance and operation of its key controls, and

ultimately to draw the conclusions set out in the following

report. I will be available at the AGM to answer any questions

about our work.

Kate Ferry

Chair of the Audit Committee

8 March 2022

Annual Report and Accounts 2021Greggs plc

AUDIT COMMITTEE REPORT CONTINUED

Composition

The Audit Committee is comprised of the following:

Kate Ferry (Chair)

Helena Ganczakowski

Sandra Turner

Mohamed Elsarky (appointed as Director and Audit

Committee member on 21 June 2021).

Peter McPhillips retired as a Director and member of the

Audit Committee on 31 July 2021.

It is the practice of the Company for all independent

Non-Executive Directors to serve as members of the

Audit Committee.

Training is provided for any new members of the Audit

Committee by way of a thorough induction process which

includes access to the external auditor, the Head of Business

Assurance and relevant members of management.

The Directors’ biographies on pages 65 and 66 detail

the Committee members’ previous experience and

demonstrate that they have experience individually in

a range of disciplines relevant to Greggs’ business.

The Board considers that Kate Ferry has recent and

relevant financial experience.

Role and responsibilities

The Terms of Reference of the Committee can be accessed

at: corporate.greggs.co.uk/investors/corporate-

governance/company-documents.

The key responsibilities of the Audit Committee are:

– ensuring that the accounting and financial policies of

the Company are proper and effective;

– assisting the Board in fulfilling its oversight

responsibilities by monitoring the integrity of the

accounts and information published by the Company

and reviewing significant financial judgements

contained in them;

– advising the Board on whether it believes the annual

report and accounts, taken as a whole, is fair, balanced

and understandable and provides the information

necessary for shareholders to assess the Company’s

position and performance, business model and strategy;

– reviewing the internal financial controls and the Group’s

approach to risk management;

– overseeing whistle-blowing arrangements;

– monitoring compliance with the Listing Rules and the

recommendations of the Governance Code;

– overseeing the Company’s internal auditors and reviewing

the effectiveness and objectivity of the audit process;

– overseeing the Company’s external auditors, reviewing

their independence and objectivity and monitoring the

effectiveness of the audit process;

– developing and implementing policy on the external

auditor’s provision of non-audit services; and

– reporting to the Board on how it has discharged

its responsibilities.

Meetings during the year

The Audit Committee met four times during the year. Details

of Committee members’ attendance are given on page 71.

The Committee normally invites the Company Chair, the

Executive Directors, the Head of Business Assurance and

the external auditor to attend its meetings. Time is set aside

bi-annually for discussion with the external auditor and with

the Head of Business Assurance, in each case in the absence

of all Executive Directors. The Committee also has access to

the Company’s management team and to its auditor and can

seek further professional advice, at the Company’s cost, if

required. The Chair has regular contact with the Finance

Director, and internal and external auditors, in addition to

scheduled Committee meetings to ensure that emerging

issues are addressed. She also has access to an audit

partner independent of the partner responsible for the audit.

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Greggs plc

Area of focus Action taken

Impairment of assets

Property, plant and equipment and right-of-use assets are reviewed for impairment if events or changes

in circumstances indicate that the carrying value may not be recoverable. When a review for impairment

is conducted the recoverable amount is estimated based on either value-in-use calculations or fair value

less costs of disposal. Value-in-use calculations are based on management’s estimate of future cash

flows generated by the assets and an appropriate discount rate. Consideration is also given to whether

the impairment assessments made in prior years remain appropriate based on the latest expectations in

respect of recoverable amount. Where it is concluded that the impairment has reduced, a reversal of the

impairment is recorded.

The Covid-19 crisis meant that during 2020 all shops had periods of no, or reduced, sales. This was

deemed to be an impairment trigger and as a result assets in company-managed shops were tested for

impairment. Sales have recovered during 2021 but in some locations the level of sales is still below that

seen in 2019. As recovery from the pandemic continues, there remains inherent uncertainty in the rate

of sales.

An impairment review was carried out for the company-managed shop estate using the assumptions

set out in the basis of preparation on page 126. As a result of this review a net impairment release of

£2.2 million has been recognised in 2021 resulting in an impairment of £4.9 million remaining at 1 January

2022 in respect of shop fittings and right-of-use assets for 59 shops. In 2020 £5.3 million of impairment

was recognised in respect of 38 shops which did not reopen following the lockdown period and a further

£8.7 million in respect of 87 shops where the carrying value was not considered to be recoverable in full.

In addition to the above £1.3 million has been released to the income statement in 2021 in respect of land

and bakery plant and machinery which is no longer considered to be impaired.

The sensitivities of the assumptions on this amount are set out on page 127.

The Committee reviewed management’s assessment of the impact of the Covid-19 crisis on the shop

estate and the ongoing recovery and concurred that all shops should be re-tested for impairment at

the end of 2021. It has reviewed the assumptions made and the resulting impairment releases and has

concluded that the principles and judgements applied were appropriate.

AUDIT COMMITTEE REPORT CONTINUED

Financial reporting

In 2021 the Audit Committee reviewed the 2020 annual report, interim results, preliminary

results announcement and reports from the external auditor on the outcome of their reviews

and audits.

During the year, and up to the date of this report, the Committee considered key accounting

issues and judgements and related disclosures in the Group’s accounts. The significant areas

of judgement considered by the Committee in relation to the accounts for the 52 weeks ended

1 January 2022 are as follows:

Annual Report and Accounts 2021Greggs plc

AUDIT COMMITTEE REPORT CONTINUED

Area of focus Action taken

Accounting for leases

IFRS 16 Leases became effective for 2019 and was adopted by the Group on 30 December 2018. As a

result of this, lease liabilities, representing the obligation to make lease payments, are recognised on

the balance sheet together with corresponding right-of-use assets. In the income statement rent costs

were replaced by a straight-line depreciation charge on each right-of-use asset and an interest charge

that reduces over the lease term.

At the end of 2021 the Group has recognised right-of-use assets of £263.6 million (2020: £270.1 million)

and lease liabilities totalling £283.2 million (2020: £291.7 million). Charges to the income statement of

£48.7 million (2020: £51.9 million) in respect of depreciation and £6.3 million (2020: £6.5 million) in

respect of interest were recognised.

The sensitivities of the assumptions on these amounts are set out on page 127.

The Committee continues to review and monitor developments in this area to ensure that

judgements made are up to date and remain valid and that the approach adopted is still

appropriate to the Group’s circumstances.

The Committee considers that the judgements made are appropriate to the Group’s

particular circumstances.

Accounting for defined benefit pension schemes

The valuation of the defined benefit obligation depends on the selection of certain assumptions

including the discount rate, inflation rates and mortality rates.

In addition, judgement is required in determining the appropriate accounting under IAS 19 and IFRIC 14 –

The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction as to

whether a net pension surplus should be recognised and whether a liability should be recognised

for any minimum funding requirements.

The net liability recognised in relation to defined benefit pension schemes at the end of 2021 was

£2.4 million (2020: £11.9 million).

The sensitivities of the assumptions on these amounts are set out in Note 21 to the accounts.

Pension scheme liabilities are assessed on behalf of the Company by independent actuaries.

The Committee assessed the underlying assumptions and concluded that they were appropriate

and also discussed the appropriateness of the assumptions with the external auditor.

The Committee also considered and discussed the judgements involved in applying the requirements of

IFRIC 14 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction,

including whether the Group has an unconditional right to refund.

Fair, balanced and understandable

The Committee is responsible for advising the Board on whether it believes the annual report

and accounts, taken as a whole, is fair, balanced and understandable.

The Committee received a report from the Head of Business Assurance who is not involved in the

preparation of the annual report and accounts and who conducted an independent review of it.

The following factors were considered during the course of this review:

– ensuring that all the statements are consistent with one another;

– verifying that figures in the narrative sections are consistent with the relevant financial detail;

– identifying any duplication of information;

– ensuring that the disclosure of non-underlying items is balanced;

– confirming that ‘bad news’ is included, as well as ‘good news’; and

– highlighting any inappropriate use of technical language or jargon.

The Audit Committee considered the feedback from this report alongside its own review of

the annual report and accounts when making its recommendation to the Board regarding fair,

balanced and understandable.

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Greggs plc

Area of focus Action taken

Going concern

The accounts continue to be prepared on a going concern basis. Information provided by the Finance Director regarding future financial plans, risks and liquidity was

presented to the Committee to enable it to determine whether the going concern basis of accounting

remained appropriate.

The Committee reviewed and challenged the assumptions used and concluded that the Board is able

to make the going concern statement on page 76 of the Directors’ report.

Viability

The Board is required to consider the period over which it is able to conclude that the Company

will remain viable, having taken into account severe but plausible risks and risk combinations.

The Committee reviewed the process undertaken by management to support and allow the Directors to

assess the Group’s long-term prospects and make its viability statement. The Committee considered

and provided input into the determination of which of the Group’s principal risks and combinations

thereof might have an impact on the Group’s liquidity and solvency.

The Committee reviewed the results of management’s scenario modelling and the stress testing of

these models. The Committee reviewed and challenged the assumptions used and concluded that

the Board is able to make the viability statement on page 63 of the strategic report.

The Committee considered the accounting requirements of

IAS 1 relating to the separate disclosure of material items of

income or expense together with the FRC’s guidance on the

subject. It concluded that there were no material items in the

year (2020: £0.8 million) where separate disclosure should be

made and consequently has not included the understanding

and treatment of exceptional items as a significant

judgement in the table above.

The Committee also considered other key accounting issues

and related disclosures in the Group’s accounts as follows:

– whether any changes in accounting policy were required

following changes in the business or in legislation;

– whether the Company’s tax policy remains appropriate;

– the impact of changes in accounting standards and their

relevance, if any, to the Company;

– reports from the Company Secretary and Finance

Director which assess the Company’s compliance

with the Listing Rules.

External audit

Assessing external audit effectiveness

The Audit Committee discussed and agreed the scope of

the audit with the external auditor and agreed their fees in

respect of the audit.

The Committee reviewed the effectiveness of the external

audit in line with the Financial Reporting Council’s ‘Practice

aid for audit committees’ (December 2019). It sought

feedback from senior management, by way of a detailed

questionnaire, in respect of the effectiveness of the audit

process with particular reference to audit planning, design

and execution of a partly remotely-conducted audit.

The Committee also considered the effectiveness of the

audit through the reporting from and communications with

the auditor and an assessment of the auditor’s approach to

key areas of judgement and any errors identified during the

course of the audit.

The Committee concluded that the audit was effective and

that the relationship and effectiveness of the external

auditor be kept under review.

Appointing the auditor and safeguards on

non-audit services

The Committee’s policy on auditor appointment is to

consider annually whether to conduct an audit tender

for audit quality or independence reasons. During 2020

the Audit Committee conducted a full tender exercise

for the appointment of a new auditor which resulted in

the appointment of RSM UK Audit LLP (RSM) as auditor

at the AGM in May 2021.

It is the responsibility of the Committee to monitor the

independence and objectivity of the external auditor

(including the impact of any non-audit work undertaken

by it) and its suitability for reappointment.

AUDIT COMMITTEE REPORT CONTINUED

Annual Report and Accounts 2021Greggs plc

AUDIT COMMITTEE REPORT CONTINUED

The Company has a formal policy to ensure that the provision

of non-audit services by the external auditor for non-audit

work does not compromise the auditor’s independence or

objectivity. It monitors the level and type of non-audit fees

on an annual basis and ensures that the overall level of

non-audit fees remains in line with current ethical

guidance governing the accounting profession.

The Audit Committee favours a presumption that non-audit

work will be awarded to a firm other than the audit firm

unless there is a good reason to use the auditor. An annual

base plan for non-audit fees paid to the external auditor is

agreed in advance by the Audit Committee. Expenditure in

accordance with this plan can then be committed without

further referral to the Audit Committee. Expenditure that is

not included in the agreed plan is subject to strict authority

limits and is reviewed by the Committee.

All use of the external auditor for non-audit work must

be reported to and approved by the Committee. In

circumstances where non-audit fees are significant relative

to the audit fee an explanation would be provided in the

subsequent Audit Committee Report. In addition, the Audit

Committee ensures that the external auditor has its own

policies and is subject to professional standards designed

to safeguard their independence as auditor.

The Audit Committee has reviewed whether, and is satisfied

that, the Company’s current auditor, RSM, continues to be

objective and independent of the Company. During 2021 the

Committee approved RSM to provide non-audit services in

respect of the review of turnover certificates as required by

certain shop landlords. No fees were billed in respect of this

service during 2021, although the work started in the year.

Appointment of auditor

In accordance with Section 489 of the Companies Act 2006,

a resolution for the reappointment of RSM UK Audit LLP will

be proposed at the forthcoming AGM.

Risk management and internal control

Internal control

The Group has an internal control environment designed to

protect the business from the material risks which have been

identified. Management is responsible for establishing and

maintaining adequate internal controls and the Audit

Committee has responsibility for ensuring the effectiveness

of these controls. The Committee receives updates from

Business Assurance on the internal control environment at

each meeting, covering both risk management and internal

audit perspectives. This regular reporting ensures timely

review of any key issues. Whilst the Committee is updated on

all internal audit activity, those reports which conclude only

limited assurance are considered in greater detail. This gives

Committee members assurance that appropriate actions

have been taken or are in progress to implement the

audit recommendations.

The Committee considers the matters described above to

be the main features of the Group’s internal control and risk

management systems in relation to the financial reporting

process for the undertakings included in the consolidation

as a whole.

Whistle-blowing

The Company’s whistle-blowing policy is available to all

employees via the intranet, as well as via posters displayed

across the business. This gives information regarding how to

raise a concern in strict confidence, and incorporates three

escalation levels. Our Audit Committee Chair is the final

contact and resolution point for this process, and received

two calls during the year. Both of these were investigated,

and no action was required as a result.

Risk management process

The Audit Committee receives an update on risk

management at each of its meetings, and an annual report

providing detail on the overall process, and key activities

during the year. This process ensures that the Committee

meets its obligation to oversee the effectiveness of risk

management, and allows it to confirm to the Main Board

that arrangements are appropriate.

The risk management process is explained in more detail

on page 59.

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Greggs plc

Key areas subject to specific review by the Committee include the following:

Area of focus Action taken

Financial reporting All judgemental areas in the accounts are considered by the Committee, to provide

independent challenge to the process.

Task Force on Climate-related

Financial Disclosures (TCFD)

The Committee considered and confirmed the proposed statement regarding TCFD

requirements.

Cyber risk and information security Cyber risk and information security is considered at every Audit Committee meeting,

within the Head of Business Assurance’s activity update. In particular, there have been

regular updates on the implementation of a new Information Security Management System.

This allows the Committee to satisfy itself as to the adequacy of current arrangements

and future plans.

Enterprise Risk Management The Audit Committee has received updates on the new Enterprise Risk Management model

being implemented by the business.

New and emerging risks New and emerging risks are raised and discussed by members of the Risk Committee

at each of its meetings.

Any significant matters are escalated to the Audit Committee for further discussion.

Review of principal risks and uncertainties The Risk Committee discussed the key risks faced by the business during 2021 and used this

to develop the content of the statement of principal risks and uncertainties. This in turn was

considered by the Audit Committee after the year end, and approved for inclusion in this

report, on pages 61 and 62.

Viability and going concern status As part of the annual report review, the Committee has considered and agreed the viability

statement and the various scenarios modelled within it as part of the assessment.

The Company’s adoption of a going concern basis for accounts preparation was reviewed

at the mid-year, as well as during the consideration of the annual report.

Internal audit function The Committee has reviewed the work and output of the internal audit function,

and concluded as to its effectiveness throughout the year.

Internal audit

The work of the internal audit function is set out in more

detail within the principal risks and uncertainties statement

on pages 61 and 62 of this annual report. The team is led by

the Head of Business Assurance, supported by 26 auditors,

along with the Data Protection Analyst. The majority of the

audit resource is dedicated to the retail estate, including

our franchise shops, providing the Audit Committee with

assurance that the required controls for safe operation

within the shops are in place and operating effectively.

The Business Assurance team presents an annual plan to the

Audit Committee for approval, setting out how the resource

will be allocated across the business. Progress against this

plan is monitored at subsequent meetings throughout the

year. The effectiveness of the team and its level of resource

are reviewed by the Committee on an annual basis, including

a consideration of outputs, and customer feedback received.

Committee effectiveness

As noted in the Governance report on page 72 there was

an externally facilitated evaluation of the Board and its

committees during 2021. We are pleased that the overall

conclusion in respect of the Audit Committee is that it is

effective and valuable and has a good balance of skills,

experience, diversity, independence and knowledge to

enable it to discharge its responsibilities effectively. The

evaluation has identified areas for development, including

integrating risk management processes more closely

with strategy and we will look to build on the evaluation

feedback in the coming year.

Kate Ferry

Chair of the Audit Committee

8 March 2022

AUDIT COMMITTEE REPORT CONTINUED

Annual Report and Accounts 2021Greggs plc

DIRECTORS’ REMUNERATION REPORT

Dear Shareholders

On behalf of the Remuneration Committee (the ‘Committee’), I am

pleased to present our Directors’ remuneration report for 2021. I would

like to thank my colleagues for their engagement throughout the year

and welcome Mohamed Elsarky as a new member of the Committee.

DIRECTORS’ REMUNERATION

REPORT

As outlined in the Chair’s statement, 2021 was a year of further recovery for Greggs as we

navigated the ongoing challenges posed by the pandemic. The Committee continues to

have a transparent and open approach to remuneration at Greggs, taking into account the

experience of our colleagues, shareholders and wider stakeholders. Our report aims to be

clear, simple and easy to read, providing explanations and rationale for our decision-making

throughout and in particular in response to the continued uncertainty that we faced

through 2021.

The report is made up of three key sections:

– My annual Chair’s letter;

– A summary of our three-year Directors’ remuneration policy, which was formally agreed

at our AGM held on 13 May 2020; and

– Our annual remuneration report, split into sections that set out:

A. How our policy links to strategy and reward across the wider workforce;

B. Remuneration Committee activity for the 52 weeks ended 1 January 2022;

C. How Directors’ remuneration will be implemented in 2022 in line with the approved

policy; and

D. How our remuneration policy was implemented in 2021. This is an audited section of

the report outlining the remuneration of the Executive and Non-Executive Directors

during the 52 weeks ended 1 January 2022.

The annual remuneration report, together with this Chair’s statement, will be subject

to an advisory shareholder vote at the 2022 AGM.

Remuneration policy

Our remuneration policy consists of the following elements:

– fixed pay – base salary, pension and benefits; and

– variable pay – annual bonus (paid in both cash and deferred shares) and performance

share plan (PSP) measuring long-term performance and delivered in shares.

As we move into year three of the policy, the Committee believes that this structure has

served us well. It is simple and consistent, with pay outcomes dependent upon performance

linked to our business strategy and growth plans as well as taking into account our wider

workforce remuneration and specific Greggs culture. It ensures a significant proportion of

pay is delivered in shares to provide alignment with investors and incorporates other best

practice features in line with the UK Corporate Governance Code and investor guidelines.

We are comfortable that in the final year of its application, the policy continues to ensure that

the team running the business is incentivised appropriately. Accordingly, there are no formal

changes to our proposed policy for 2022.

During 2022, we will start the process of reviewing the remuneration policy and engaging with

stakeholders ahead of presenting a new policy for shareholder approval at our AGM in 2023.

Business performance in 2021 and incentive outcomes

As outlined in the Chair’s statement and the Chief Executive’s review, 2021 was a year of further

recovery for Greggs as we navigated the ongoing challenges posed by the pandemic. The team

continued to react to changing conditions and produced a strong 2021 financial result in the face

of ongoing disruption to demand and in our supply chain. As we reported at the half year, the

improved performance and trading outlook resulted in us deciding to repay all Coronavirus Job

Retention Scheme (CJRS) support claimed in the first half of 2021.

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Greggs plc

Consideration of the wider workforce

The Committee monitors and reviews the effectiveness of the Directors’ remuneration policy

and its impact on and alignment with the remuneration policies in the wider workforce. To

support decisions on Executive Directors’ pay, the Committee is provided with information

detailing the pay and benefits of the wider workforce which gives additional context for the

Committee to make informed decisions. The Remuneration Committee engaged with a

representative group of colleagues in 2021 to explain how remuneration for Directors aligns

with wider Company pay policy. Through 2022 we are looking to engage with our colleagues

on the terms of Executive Director remuneration and the development of the new three-year

remuneration policy.

In recognition of the magnificent job our teams have done in coping under such difficult

circumstances through 2021 and to recognise their hard work we brought forward the planned

2022 pay award for our operational teams by five months and for our graded management

team by two months. This 3.5% increase in pay (with an additional 3% for our lowest paid

colleagues in retail) was therefore implemented in 2021 and was in addition to the pay award

the teams received earlier in the year.

As well as this, as we had a strong year of profit delivery (with 10% of all our profits being

shared with eligible colleagues), the profit share payment this year will be at a record level

for the wider workforce.

Bonus 2021

As disclosed last year, the annual bonus scheme for 2021 was set up with performance

targets based on profit (50%), sales (20%) and strategic objectives (30%). We set target ranges

which were designed to ensure that bonus payments would only be made for appropriately

stretching levels of performance. This included profit targets designed to incentivise growth

after a challenging 2020, and sales targets aimed at minimising the shortfall (on a like-for-like

basis) with 2019, a record-breaking year.

Despite continued disrupted trading conditions, Greggs came back strongly in 2021, restoring

profitability and increasing the pace of growth in the shop estate. Our results and

achievements in 2021 show that we have emerged from the crisis both stronger and better as

a business. Through the year, demand in our walk-in channels rose alongside strong delivery

sales. We had done well to accelerate our services in the delivery channel as Covid struck and,

now that walk-in footfall was returning, delivery demand was proving to be incremental to this,

extending the reach of our shops beyond customers passing by. Employee absence and skill

shortages contributed to the broader challenges we experienced in our supply chain. Despite

all these challenges we continued to deliver positive like-for-like sales growth and, as a

consequence of this financial performance over the year, both the profit (50%) and sales (20%)

elements of the bonus were met in full and achieved maximum payout.

The strategic objectives comprised three separate elements with 10% based on business

efficiency/cost savings, 10% on food waste targets and 10% on sustainability.

Cost pressures remained significant in 2021; we worked to keep a tight control on these, resulting

in the business efficiency/cost saving element of the bonus paying out the maximum of 10%.

The 10% food waste element was split equally between reducing food waste and increasing

food redistribution. These were challenging targets and the teams across the business

worked hard to meet them. For food waste reduction, the stretch target was a 10% reduction

in food waste across our supply sites based on our 2019 year end waste figure of £5.4 million.

The teams actually achieved an impressive 17.7% reduction, resulting in a full 5% pay out of this

element. For food redistribution, the stretch target was 29.25% of unsold food redistributed

versus the 2019 year end actual of 19.5%. Again, the teams did a tremendous job, achieving

28.4%, resulting in 4.7% of this element of the bonus paying out.

The final 10% of the bonus was based on our 2040 ‘net zero’ ambition as outlined in

The Greggs Pledge. The metric involved a comprehensive analysis and modelling of Scope 3

carbon emissions with the stretch target being a robust and clear action plan for the top two

focus areas as identified through the modelling. The Board was satisfied with both the modelling

that was undertaken, in that it clearly mapped out the key elements of the Scope 3 emissions,

and the action plan that was subsequently produced. The outputs of the work were externally

verified by a third party, the Carbon Trust, and as such the Committee agreed all elements were

met in full and achieved maximum payout. We will be actioning key elements of this carbon

reduction plan in 2022 and will carry forward the work completed in 2021 into the remuneration

policy review, where we will explore broadening the use of ESG/strategic measures in our

variable pay metrics in 2023 and beyond.

The Committee is cognisant that the payout of the bonus is very near to maximum but is

satisfied that this outcome aligns well with the business performance in what were tough

trading conditions in 2021. The Committee carefully reviewed management’s performance

against these targets, taking the full business context and stakeholder experience into

account and determined that this level of payout was appropriate with no need to apply

discretion. Overall, annual bonuses were paid at a level of 99.7% of the maximum equating

to payments of 124.6% (out of a maximum of 125%) and 99.7% (out of a maximum of 100%) of

salary to the Chief Executive and Finance Director, respectively. Any element of the bonus

earned above 50% of the maximum will be paid in shares and will be subject to a two-year

Annual Report and Accounts 2021Greggs plc

holding period. As previously mentioned, as we had a strong year of profit delivery (with 10% of

all our profits being shared with eligible colleagues), the profit share payment this year will be

at a record level for the wider workforce.

PSP vesting in 2022

The three-year performance period for the PSP awards made in April 2019, and due to vest

in April 2022, ended on 1 January 2022. As noted in the 2020 remuneration report, the

Committee made no adjustments to the targets for these awards, and had assumed then that,

due to the impact of Covid-19, the threshold performance targets for both EPS and ROCE were

unlikely to be met. However, due to the exceptional recovery in performance of the business

through 2021 a proportion of these awards will now vest.

50% of these awards were based on EPS growth of 5-11% p.a. over three financial years to

1 January 2022, with the other 50% based on average annual ROCE over the period of 24-28%.

In the event, EPS grew by 22.7% p.a. and our average annual ROCE was 23.18%. This meant that

the EPS performance condition vested in full but the ROCE performance condition was not

met, therefore delivering a 50% vesting rate for this award.

The Committee has reviewed this outcome in the context of wider business performance and

stakeholder experience, and is very comfortable that vesting is justified at this level with no

need to apply discretion to adjust the outcome.

Approach for 2022

Having demonstrated our resilience as a business over the last two years, we held a capital

markets day in October in which we set out our ambitious plan to double sales in the next

five years. The fundamental strategic pillars of our business model have not changed but we

have identified four key growth drivers which will become the focus of our plan to reach our

potential in the years ahead. In delivering the strategic pillars, the four key growth drivers and

The Greggs Pledge, it is vital that there continues to be a sustained focus and alignment to our

remuneration policy and approach. As noted above we will start the process of reviewing the

remuneration policy in 2022 and whilst we continue to act with restraint in remuneration

matters, it is important that we set policy and incentive plans that strike the right balance

between achievability and stretch, driving the right decisions for the business, supporting

the wider workforce and shareholders, and at the same time motivating and enabling the

retention and recruitment of senior talent.

Appointment of new Chief Executive

As announced on 6 January 2022, Roger Whiteside has given notice of his intention to retire

from the Company and it has been agreed that he will step down from the Board at the close

of the 2022 AGM, remaining available to support the transition process until his notice period

expires on 5 January 2023.

Roisin Currie has been appointed Chief Executive, effective from the date of the AGM in May

2022, subject to shareholder approval. Pending this appointment, she joined the Board as

CEO Designate and as an Executive Director with effect from 1 February 2022.

The Committee has approved good leaver status for Roger Whiteside. His leaving

arrangements are in line with the provisions of the Directors’ remuneration policy and good

practice, and are set out later in this report. In brief, Roger will continue to receive his normal

remuneration package until the AGM, after which he will continue to receive salary, benefits

and pension throughout his notice period. Any bonus earned for 2022 will be only in respect of

the period served to the AGM. His outstanding PSP awards remain subject to the satisfaction

of the relevant performance conditions and will be scaled back for the proportion of the

vesting period that he is employed.

The reward package for Roisin Currie has been set in line with the existing remuneration

policy. Further details are set out below and in the rest of this report.

Salaries and fees

In recognition of the magnificent job our teams have done in coping under such difficult

circumstances through 2021 and to recognise their hard work, we brought forward the

planned 3.5% pay award for our operational teams (with an additional 3% for our lowest paid

colleagues in retail) by five months and for our graded management team by two months,

meaning that their 2022 pay increases took effect in 2021.

With effect from 1 January 2022, the Committee agreed a salary increase of 3.5% for

the Finance Director, in line with the base increase for the workforce generally. The same

increase was agreed for the Chair and a consistent approach was taken by the Board in

relation to the Non-Executive Directors’ fees. Due to Roger Whiteside’s impending retirement,

the base pay award was not applied to his salary. This early implementation of the pay award

for our wider workforce was not applied to our Executive Directors, Non-Executive Directors

or Operating Board.

DIRECTORS’ REMUNERATION REPORT CONTINUED

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Greggs plc

Roisin Currie’s salary as CEO Designate was set at £400,000 with effect from the date of

her appointment to the Board (1 February 2022). This will rise to £600,000 with effect from

the AGM, when she becomes Chief Executive. This salary level is in line with the salary

Roger Whiteside would have received for 2022 were he continuing as Chief Executive

(and remains well below median compared with relevant peer companies). Roisin Currie’s

pension contribution will be in line with the rate applying to the majority of the workforce,

at 4% of salary (significantly below the pension contribution for Roger Whiteside).

The Committee will carry out a review of the fee for the Board Chair in 2022 as part of the

process of appointment of a new Chair, to ensure that the fee is appropriate in the context

of attracting high-quality talent and reflective of the demands of the role. The Board

(excluding the Non-Executive Directors) has separately reviewed the fee levels for

Non-Executive Directors.

Annual bonus

The maximum bonus opportunity for Roger Whiteside as Chief Executive will remain at 125%

of salary although, as noted above, he will participate in the bonus scheme only until the AGM in

May. The Committee has decided to increase the annual bonus opportunity for Richard Hutton,

the Finance Director, from 100% to 125% of basic salary to align with the current bonus level

for the Chief Executive and the limit in the remuneration policy to further incentivise him to

drive outperformance during a period of management change and to help ensure his ongoing

commitment and retention. Roisin Currie has a bonus opportunity of 100% of salary for the

period she serves as CEO Designate, rising to 125% with effect from her appointment as

Chief Executive.

The Committee believes that the current performance measures – profit (50%), sales (20%)

and strategic objectives (30%) remain appropriate and no changes are proposed to these

weightings. The strategic objectives will continue to comprise three separate elements with

10% based on business efficiency/cost savings, 10% based on evening sales and 10% based

on an element of The Greggs Pledge (food waste targets).

Targets for these measures for the 2022 bonus will be set in line with the financial plan for the

business for the year and the rolling strategic plan and will continue to be stretching. Due to

the commercial sensitivity of the 2022 bonus targets they are not disclosed within this report,

but will be disclosed retrospectively in next year’s report.

PSP

For the 2022 PSP, the Finance Director, Richard Hutton will receive an award at a level of 150%

of salary. Although the normal maximum grant level under the remuneration policy is 125% of

salary, we can grant up to 150% in exceptional circumstances. The Committee believes such

circumstances now exist, as the Company undergoes an evolution in leadership and Richard

Hutton is critical in helping to support this transition. The Committee believes his knowledge

and experience will be essential and therefore his long-term incentive award should be

appropriately pitched to reflect the key contribution he is expected to make over the next

few years. Roisin Currie will receive an award at a level of 150% of salary following her

appointment as Chief Executive in May. Roger Whiteside will not receive an award in 2022.

The Committee has considered the performance conditions and has determined that EPS

and ROCE should continue to be used, with an equal weighting given to each. We have set

appropriately stretching performance targets for each measure reflecting the strategic

plan and business outlook over the performance period, whilst taking into account the

impact of corporation tax changes on the metrics. Full details of the targets are set out

later in this report.

The Committee will be reviewing the performance measures for future PSP awards later in

2022 as part of the remuneration policy review including the possibility of including strategic

measures linked to elements of The Greggs Pledge.

UK Corporate Governance Code

In line with the remuneration policy, as a new Executive Director, the CEO Designate will be

required to maintain a shareholding in the Company for at least two years following cessation of

their employment. We do not currently apply the post-employment shareholding requirements

for the Executive Directors who were in place when the Directors’ remuneration policy was

approved in 2020, i.e. the Finance Director and the outgoing Chief Executive. As previously

explained, the Committee did not apply the policy for the incumbent Directors as their PSP and

deferred bonus awards are considered to provide a very significant post-employment interest

stretching out several years from the point of cessation. The Committee intends to address this

when reviewing the remuneration policy ahead of the 2023 AGM with a view to proposing an

updated policy encompassing all Executive Directors.

As previously reported, the pension contribution rates for the Finance Director and the

outgoing Chief Executive are reducing over a five-year period until they match those

contributions available to the workforce. As such, the Company was not fully compliant with

Provision 38 of the Code during the year under review. As noted above, and in line with the

Directors’ remuneration policy for new Executive Directors, the CEO Designate’s pension

rate is aligned with that of the wider workforce.

Annual Report and Accounts 2021Greggs plc

Shareholder engagement

We continue to welcome all feedback from our shareholders as their views help us inform

our thinking on remuneration matters and in particular when evaluating and setting the

remuneration strategy. The Committee is committed to continue consulting with key

shareholders and we hope we can rely on your ongoing support as we commence the work

in 2022 on our new three-year remuneration policy, for which formal approval will be sought

at the 2023 AGM.

AGM

We trust that you will find this report transparent, clear and informative. The Committee has

remained focused on ensuring that executive remuneration is closely aligned to the delivery

of Greggs’ business strategy whilst continuing to take account of stakeholder experience,

best practice and the wider workforce.

I look forward to receiving your support at this year’s AGM with regards to the annual report

on remuneration. If you would like to contact me directly to discuss any aspect of this report

then please email me at investorrelations@greggs.co.uk.

Yours faithfully

Dr Helena Ganczakowski

Chair of the Remuneration Committee

8 March 2022

Remuneration policy report

This section of our report is a summary of the remuneration policy for all Executive and

Non-Executive Directors at Greggs. It explains the purpose and strategy of each element of

the package and demonstrates how the policy will incentivise Executive Directors to achieve

sustainable long-term growth and value to best serve the interests of the Company, its

shareholders, its colleagues and other stakeholders.

The current Directors’ remuneration policy was approved by shareholders at our AGM on

13 May 2020 and became effective for three years from that date. There are no proposed

changes to this policy in 2022.

The policy for the remuneration of the Executive and Non-Executive Directors is set out

in the tables below:

Executive Directors

Element Purpose and strategy Operation Maximum opportunity

Base salary To attract and retain

high-calibre

individuals in order

to promote the

long-term success

of the business.

Reviewed and set annually

in January.

Benchmarked periodically by the

Committee against the remuneration

levels for executives in similar roles

in companies of a comparable size.

Individual performance and

contribution are recognised in

setting salary levels.

Salaries are paid monthly in cash.

No maximum limit is

prescribed. Key

reference points for

salary increases are

market and economic

conditions and, in line

with our values, the

approach to colleague

pay throughout the

organisation.

Benefits To support a

competitive

remuneration

package in the

marketplace.

Benefits include provision of a

company car (or cash in lieu), private

medical health care, life assurance

and permanent health insurance.

No maximum limit is

prescribed, particularly

as the cost of providing

insured benefits

fluctuates over time.

However, the

Committee monitors

on an annual basis the

overall cost of the

benefit provision.

DIRECTORS’ REMUNERATION REPORT CONTINUED

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Greggs plc

Element Purpose and strategy Operation Maximum opportunity

Pension To support a

competitive

remuneration

package in the

marketplace and

ensure that pension

contributions are

aligned to the rate

applying to the

majority of the

workforce over time.

Executive Directors can elect to

either:

– participate in the Company

defined contribution pension

scheme (up to a cap). Above the

cap Executive Directors receive

a salary supplement; or

– take cash in lieu of this

contribution paid as a supplement

to their salary on a monthly basis.

The Executive Directors are able to

make this choice on an annual basis.

The Executive Directors in place

when this remuneration policy was

approved are having their pension

contributions reduced over five

years, commencing in the financial

year 2021. The reduction will be in

equal proportions until their

contribution rate matches that

of the majority of the workforce.

Up to 22.5% of base

salary contribution for

the current Chief

Executive and up to 15%

of base salary for the

Finance Director, but

reducing to the

percentage pension

contribution of the

majority of the

workforce over time.

All new Executive

Directors (including the

CEO Designate) will

have their pension

contribution aligned

to the rate applying to

the majority of the

workforce.

Annual bonus

(including

profit share)

To incentivise

achievement of

annual targets and

objectives consistent

with the short to

medium-term

strategic needs of

the business, so

as to encourage

sustainable growth

in the Company’s

operating profits.

The bonus will be based on a mix of

business KPIs, with operating profit

being the largest component of the

mix of metrics and this will not be

less than 50% of the overall mix.

Targets for each metric are set in

advance and in line with business

planning objectives set by the

Committee.

Capped at 150% of base

salary for the Chief

Executive and 125% of

base salary for other

Executive Directors.

On target performance

delivers no more than

50% of the maximum.

No more than 25% of

the bonus opportunity

is payable under each

element for threshold

performance.

Element Purpose and strategy Operation Maximum opportunity

Annual bonus

(including

profit share)

continued

Each Executive Director is entitled to

participate in the Company’s

profit-sharing scheme available to all

colleagues. The value of this is then

deducted from their annual bonus

and is subject to the individual cap.

The Committee will use appropriate

underpins for any non-profit based

element of the annual bonus such

that payment under these elements

may be scaled back (potentially to

zero), at the discretion of the

Committee, if the operating profit

performance for the year is judged to

be running significantly below that

required for the achievement of the

long-term strategy.

The Committee will be able to adjust

the formula-driven outcome from

any bonus plan if, in the judgement of

the Committee, this does not reflect

broader Company performance or

the shareholder experience, or the

payment level is otherwise

inappropriate.

Any bonus paid in excess of 50%

of the maximum will be payable in

shares, which (after any sales to pay

tax and other statutory deductions)

must be held in the Employee Benefit

Trust for two years after receipt.

The dividends payable on deferred

bonus shares are paid to the

individual as they fall due.

Annual Report and Accounts 2021Greggs plc

Element Purpose and strategy Operation Maximum opportunity

Annual bonus

(including

profit share)

continued

Recovery and withholding provisions

allow the Company to recoup annual

bonus payments within three years in

the event of misstatement of

performance, error, misconduct,

reputational damage or corporate

failure where this has led to an

overpayment in the view of the

Committee. There is a flexible

mechanism which allows the

Company to withhold outstanding

deferred or future remuneration

or recover the overpayment direct

from the individual concerned.

Element Purpose and strategy Operation Maximum opportunity

Performance

Share Plan

(PSP)

To incentivise

long-term value

creation, retention

of our talent and

ensure alignment of

Executive Directors’

and shareholders’

interests.

Awards are granted under the PSP

annually at the discretion of the

Committee.

Performance conditions will be

based on appropriate financial

measures with targets being set

for each metric which reflect

the strategic plan and business

outlook over the respective

performance period.

Performance will be measured over a

three-year period with an additional

mandatory holding period of two

years for the vested shares (net of

tax and other deductions).

A PSP award holder may be entitled

to a dividend equivalent payment in

respect of any vested shares.

The Committee will be able to adjust

the formula-driven outcome from

the PSP if, in the judgement of the

Committee, this does not reflect

broader Company performance

or the shareholder experience,

or the vesting level is otherwise

inappropriate.

Recovery and withholding provisions

allow the Company to recoup vested

PSP awards within three years in the

event of misstatement of

performance, error, misconduct,

reputational damage or corporate

failure where this has led to an

overpayment in the view of the

Committee. There is a flexible

mechanism which allows the

Company to withhold outstanding

deferred or future remuneration, or

recover the overpayment directly

from the individual concerned.

150% of base salary for

Chief Executive and

125% of base salary

for other Executive

Directors (150% of base

salary in exceptional

circumstances).

Threshold vesting at

25% of the maximum.

DIRECTORS’ REMUNERATION REPORT CONTINUED

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Greggs plc

Element Purpose and strategy Operation Maximum opportunity

Savings-

Related Share

Option

Schemes

(SAYE

and SIP)

To encourage

colleagues at all

levels within the

Company to

understand better

and so participate

in the growth in value

of the Company.

No performance conditions have

been attached to options granted

pursuant to the Company’s SAYE

and SIP Schemes, which are available

for all colleagues.

Executive Directors

may enter into a

contract to save up to

an agreed saving limit in

line with all colleagues

in the business and

HMRC guidelines.

retention

guidelines

To further align

the interests of

Executive Directors

to those of

shareholders.

Executive Directors are required to

build up a shareholding of 200% of

base salary. Where an Executive

Director has not reached the

required level, 50% of the shares

vesting from incentive schemes

must be held until this requirement

has been met.

This is achieved through vested

awards granted via the PSP and

deferred bonus shares.

For any new Executive Directors

appointed there will be a two-year

post-employment holding

requirement at the lower of the level

of the shareholding guideline

immediately prior to departure or the

actual shareholding at departure.

n/a

Non-Executive Directors

Element Purpose and strategy Operation Maximum opportunity

Non-

Executive

Chair and

Directors’

fees

To attract and retain

high-quality and

experienced

Non-Executive

Chair and Directors.

The Chair is paid an all-

encompassing fee.

Non-Executive Directors are paid a

basic fee and the Chairs of the Main

Board Committees and the Senior

Independent Director are paid an

additional fee to reflect their

additional responsibilities.

These fees are usually reviewed

and set annually. Additional fees may

be paid where there is a material

increase in the time commitments,

responsibilities required of

Non-Executive Directors or following

a review of market rates.

Non-Executive Directors are not

eligible for pension scheme

membership, bonus or incentive

arrangements.

They are entitled to reimbursement

of reasonable business expenses

and tax thereon. They may also

receive limited travel or

accommodation-related benefits

in connection with their role as

a Director.

There is no prescribed

maximum.

Annual Report and Accounts 2021Greggs plc

Choice of performance measures and policy discretion

The remuneration policy provides the Remuneration Committee with the flexibility to choose

appropriate performance conditions for the annual bonus scheme and for PSP awards,

subject to the constraints set out in the table above. The choice of metrics will depend upon

the strategic focus for the Group at the time decisions around the awards are taken. The

specific measures and the targets used to assess performance will be disclosed in the

Directors’ remuneration report on an annual basis.

The Committee will operate incentive plans in accordance with their respective rules,

the Listing Rules and HMRC limits where relevant. The Committee, consistent with

market practice, retains discretion over a number of areas relating to the operation and

administration of certain plan rules. These include (but are not limited to) the following:

– who participates;

– the timing of the grant of award and/or payment;

– the size of an award (up to plan/policy limits) and/or a payment;

– discretion relating to the measurement of performance in the event of a change of control

or reconstruction;

– determination of a good leaver (in addition to any specified categories) for incentive plan

purposes and the treatment of leavers; and

– adjustments required in certain circumstances (e.g. rights issues, corporate restructuring

and special dividends); and the ability to adjust, but not waive, existing performance

conditions for exceptional events so that they can still fulfil their original purpose.

Legacy arrangements

For the avoidance of doubt, in approving this policy report, authority is given to the Company

to honour any commitments entered into with current or former Directors (such as the

payment of a pension or the unwinding of legacy share schemes) that have been disclosed

to shareholders in previous remuneration reports. Details of any of these payments to

former Directors will be set out in the annual report on remuneration as they arise.

Policy on recruitment remuneration

The Committee will set a new Executive Director’s remuneration package in line with the

Company’s approved policy at the time of appointment. In arriving at a total package and in

considering the quantum for each element of that package, the Committee will take into

account the skills and experience of the candidate, the market rate for a candidate of that

experience as well as the importance of securing the best available candidate.

Annual bonus and PSP awards will not exceed the policy maxima (not including any

arrangements to replace forfeited deferred pay). Participation in the annual bonus plan will

normally be pro-rated for the year of joining. The Committee may make one-off additional

cash and/or share-based awards as it deems appropriate, and if the circumstances so

demand, to take account of deferred pay forfeited by an Executive Director on leaving a

previous employer. Awards to replace deferred pay forfeited would, where possible, reflect

the nature of awards forfeited in terms of delivery mechanism (cash or shares), time horizons,

attributed expected value and performance conditions. Other payments may be made in

relation to relocation expenses and other incidental expenses as appropriate. Any buyout

awards would be made under existing arrangements where possible or as permitted under

the Listing Rules.

In the case of an internal appointment, any variable pay element awarded in respect of

the prior role would be allowed to pay out according to its terms and any other ongoing

remuneration obligations existing prior to appointment would continue.

In line with our Remuneration Policy, all new Executive Directors will have their pension

contribution aligned to the rate applying to the majority of the workforce.

For the appointment of a new Chair or Non-Executive Director, the fee arrangement

would be set in accordance with the approved remuneration policy at that time.

DIRECTORS’ REMUNERATION REPORT CONTINUED

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Greggs plc

Service contracts and policy on cessation

Executive Directors’ service contracts contain the following remuneration-related aspects:

Provision Detailed terms

Remuneration – Salary, pension and benefits;

– company car or cash allowance;

– private medical health care for the Director;

– permanent health insurance;

– participation in annual bonus and profit share

(subject to scheme rules);

– participation in long-term incentive schemes or similar

arrangements (subject to scheme rules); and

– life assurance.

Notice period – the Chief Executive’s service contract is terminable on 12

months’ notice served by either the Company or the Director;

– the Finance Director’s service contract is terminable on

12 months’ notice served by the Company or by six months’

notice served by the Director;

– the CEO Designate’s service contract is terminable on 12 months’

notice served by either the Company or the Director; and

– any future Executive Directors’ service contracts will be

terminable on up to 12 months’ notice served by either party.

Termination payment – Payment in lieu of notice equal to any unexpired notice of

termination given by either party; and

– payment in lieu shall not include:

– any bonus payment;

– any payment in respect of benefits which the Director

would have been entitled to receive; and

– any payment in respect of any holiday entitlement that would

have accrued during the period for which the payment in lieu

is made.

Details of the circumstances in which the Committee has the

ability to exercise discretion with regards to termination payments

are set out below.

Under their service contracts, if notice is served the Executive Directors are entitled to salary,

pension contributions and benefits for their notice period save where a payment in lieu is to

be made. The Company would seek to ensure that any payment is mitigated by use of phased

payments and offset against earnings elsewhere in the event that an Executive Director finds

alternative employment during their notice period. There are no contractual provisions in

force other than those set out above that impact any termination payment.

Areas where the Committee can exercise discretion with regards to termination payments

are set out below:

– any right to annual bonus in the year of departure would lapse unless the individual is

leaving in good leaver circumstances, in which case a bonus may be payable pro-rated

for that part of the year worked;

– deferred bonus shares must normally be retained in trust until the end of their two-year

holding period, but may be released early in exceptional circumstances, such as ill-health;

– any unvested awards held under the PSP will lapse at cessation, unless the individual is

leaving in good leaver circumstances (defined under the plan as death, injury, ill-health,

disability, redundancy, retirement, their office or employment being with either a company

which ceases to be a Group member or relating to a business or part of a business which is

transferred to a person who is not a Group member, a change of control or any other reason

the Committee so decides). In these circumstances, unvested awards will normally vest at

the normal vesting date (other than on death or where the Committee decides they should

vest at cessation) subject to performance conditions being met and scaling back in respect

of actual service as a proportion of the total vesting period (unless the Committee decides

that scaling back is inappropriate). Vested awards will normally be subject to the mandatory

two-year holding period although the Committee will have discretion to waive this in

exceptional circumstances; and

– the Committee may agree to payment of disbursements such as legal costs and

outplacement services if appropriate and depending on the circumstances of cessation.

The table below sets out the details of the Executive Directors’ service contracts:

Director Date of contract

Roger Whiteside 4 February 2013

Richard Hutton 7 April 2006

Roisin Currie 1 February 2022

The service contracts are available for inspection during normal business hours

at the Company’s registered office, and are available for inspection at the AGM.

Annual Report and Accounts 2021Greggs plc

Expected value of the proposed annual remuneration package for Executive

Directors

The following charts indicate the level of remuneration payable to Executive Directors

(whilst on the Board) in 2022 based on policy at minimum remuneration, remuneration

in line with ‘on target’ Company performance, and the maximum remuneration available.

Finance Director – Richard Hutton

PSP

Bonus

Fixed remuneration

30%

39%

49%

25%

32%

27%

100%

45%

29%

24%

£1,800,000

£1,600,000

£1,400,000

£1,200,000

£1,000,000

£800,000

£600,000

£400,000

£200,000

50%

share price

appreciation

StretchOn targetMinimum

£445,329

£982,020

£1,813,685

£1,518,710

£0

Minimum On target Stretch

50% share price

appreciation

Fixed remuneration:

– Salary £393,300 £393,300 £393,300 £393,300

– Pension £39,330 £39,330 £39,330 £39,330

– Benefits £12,699 £12,699 £12,699 £12,699

Bonus – £241,716 £483,431 £483,431

Performance Share Plan – £294,975 £589,950 £884,925

Total £445,329 £982,020 £1,518,710 £1,813,685

CEO Designate – Roisin Currie

PSP

Bonus

Fixed remuneration

35%

44%

54%

23%

28%

24%

100%

42%

27%

22%

£2,500,000

£2,000,000

£1,500,000

£1,000,000

£500,000

50%

share price

appreciation

StretchOn targetMinimum

£541,021

£1,283,024

£2,475,027

£2,025,027

£0

Minimum On target Stretch

50% share price

appreciation

Fixed remuneration:

– Salary £490,860 £490,860 £490,860 £490,860

– Pension £19,634 £19,634 £19,634 £19,634

– Benefits £30,537 £30,537 £30,537 £30,537

Bonus – £292,003 £584,006 £584,006

Performance Share Plan – £450,000 £900,000 £1,350,000

Total £541,021 £1,283,024 £2,025,027 £2,475,027

Assumptions used in the charts:

Base salary levels as at 1 January 2022 (Richard Hutton) or date of appointment (Roisin Currie).

The value of taxable benefits is based on the cost of supplying those benefits at the agreed level for Richard Hutton.

The value for Roisin Currie is estimated based on the cost of supplying those benefits at the agreed level and her

expected travel arrangements.

Bonus

Minimum remuneration – assumes no award is earned under the annual bonus plan.

On target remuneration – the annual bonus plan assumes the target level is reached for each of the elements, resulting

in a pay-out of 50% of the maximum.

Stretch remuneration – assumes satisfaction of all performance conditions for all elements under the annual bonus plan

and therefore full pay out.

PSP element is calculated as award percentage of base salary multiplied by the relevant vesting percentage.

Share price movement and dividend accrual have been excluded, other than in the 50% share price appreciation model.

Minimum remuneration – assumes no vesting is achieved under the PSP.

On target remuneration – assumes 50% vesting is achieved.

Stretch remuneration – assumes 100% vesting is achieved.

DIRECTORS’ REMUNERATION REPORT CONTINUED

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Greggs plc

Terms of appointment of Non-Executive Directors

Non-Executive Directors are appointed subject to the Company’s articles of association,

retiring and seeking election at the first AGM after appointment.

Thereafter, every Director will be subject to annual re-election by shareholders. The

Nominations Committee advises the Board as to whether Directors should be nominated for

re-election. Non-Executive Directors are not entitled to compensation for early termination

of their appointments prior to the date on which they would next be due to offer themselves

for election or re-election, or if not re-appointed at such time.

The letters of appointment for the Non-Executive Directors are available for inspection during

normal business hours at the Company’s registered office, and are available for inspection at

the AGM.

The following table shows the effective date of appointment for each Non-Executive Director:

Non-Executive Director Original date of appointment

Ian Durant 5 October 2011

Helena Ganczakowski 2 January 2014

Sandra Turner 1 May 2014

Kate Ferry 1 June 2019

Mohamed Elsarky 21 June 2021

Current Non-Executive Directors are appointed on an understanding that the appointment

will last for at least six years, but without any commitment by either party.

All new Non-Executive Directors, from June 2019, are appointed for an initial term of

three years unless terminated earlier by either party giving to the other party three months’

written notice.

A. How our remuneration links to strategy and reward across the wider workforce

Link to strategy

Growth drivers – remuneration at Greggs is intended to incentivise sustainable and profitable

business growth. This is reflected in key metrics in the variable pay incentive plans including

operating profit, like-for-like sales, EPS, ROCE and cost savings.

Strategic pillars and key drivers of growth – delivery against the four strategic pillars and

key drivers of growth is incentivised as appropriate by strategic metrics in the annual bonus

scheme – for example specific project delivery.

The Greggs Pledge – our commitment to deliver these goals is supported with the inclusion

of ESG (e.g. food waste) targets.

Reward across the wider workforce

The remuneration policy for the Executive Directors is designed having regard to the policy

for colleagues across the Group as a whole and wider workforce remuneration and related

policies. Through 2022 we are looking to engage with our colleagues on the terms of Executive

Director remuneration and the development of the new three year Remuneration policy.

The Remuneration Committee engaged with a representative group of colleagues in 2021

to explain how remuneration for Directors aligns with wider Company pay policy and plans

further engagement sessions in 2022.

There are differences in salary levels and in the levels of potential reward depending upon

seniority and responsibility, although a key reference point for Executive Director salary

increases is the average base pay increase across the general workforce.

We share 10% of our profits annually with our colleagues across the business, and everyone

is eligible to participate in this profit-sharing scheme after six months’ service. A higher

proportion of the Executive Directors’ remuneration package is delivered through

performance-related incentive schemes, much of which is in share-based form, which

provides a good link to long-term Company performance and shareholder experience.

Share option incentive schemes and bonus participation extends below Board level, with

a separate share option scheme in place for Senior Management colleagues and a bonus

scheme for graded management. Both the share option and management bonus schemes

are aligned to those of the Executive Directors and are subject to the same performance

targets and measures.

Annual Report and Accounts 2021Greggs plc

All colleagues with one year’s service or more may participate in the Sharesave scheme

(where colleagues can save to purchase shares at the end of a three-year period at a discount

to the price at the date of grant) and in the Share Incentive Plan (SIP) (where colleagues can

purchase shares from pre-tax salary subject to HMRC limits). These schemes are generally

offered annually.

Compliance with the UK Corporate Governance Code

The Directors’ remuneration policy is fully compliant with the relevant factors set out in the

UK Corporate Governance Code:

Clarity We are open and transparent in our approach to remuneration taking into

account the experience of our colleagues, shareholders and stakeholders.

We regularly engage with stakeholders on remuneration matters.

Simplicity Our remuneration policy is simple and consistent in its approach. Senior

management share option and management bonus schemes are aligned

to those of the Executive Directors and are subject to the same

performance criteria.

Predictability Our remuneration policy clearly outlines the details of maximum

opportunity levels for each component of pay. Incentive levels vary

depending on the level of performance against specific metrics.

The typical award levels and potential pay-outs are disclosed in the

remuneration policy and it has been demonstrated in this statement

how outcomes have been aligned with performance and strategy.

Proportionality, risk and

alignment to culture

Pay outcomes are dependent upon performance linked to our business

strategy and growth plans as well as taking into account our wider

workforce remuneration and specific Greggs culture. This ensures a

significant proportion of pay is delivered in shares to provide alignment

with investors and incorporates other best practice features in line with

the UK Corporate Governance Code and investor guidelines.

The use of annual bonus deferral and PSP holding periods provides a

clear link to the ongoing performance of the business and therefore

alignment with shareholders.

The Committee has the discretion to apply malus and clawback in

both annual bonus and PSP.

B. Remuneration Committee activity for the 52 weeks ended 1 January 2022

Meetings during the year

The Remuneration Committee met four times during the year. Details of the Committee

members’ attendance are given on page 71.

All members are considered to be independent for the purpose of the UK Corporate

Governance Code. The Company Secretary acts as Secretary to the Committee.

Role and responsibilities

Responsibility is delegated to the Remuneration Committee to ensure that an effective

remuneration policy is in place for the Chief Executive, other Executive Directors, the

Chair and senior management whilst reviewing and taking into account wider workforce

remuneration and the Company values and culture. It is the Committee’s role to establish a

remuneration policy that promotes both long-term shareholdings by Executive Directors

and ensures alignment of policies and practices to support business strategy, promote

the long-term sustainable success of the business and meet shareholder expectations.

Summary of Committee activity during 2021

Details of some of the activities the Committee has undertaken have been outlined in the

Chair’s letter as well as being summarised below.

– Consulted in January 2021 with our largest shareholders on the potential of permitting

some of the 2018-2020 PSP award to vest. We concluded that we would not exercise

discretion and this decision was outlined in the 2020 Directors’ remuneration report;

– Reviewed all colleague remuneration and agreed the early implementation of the 2022

pay award for colleagues;

– Discussed and reviewed Directors’ salaries;

– Agreed the challenging targets for the 2021 bonus and PSP in a particularly uncertain

and challenging environment;

– Discussed the 2021 bonus outturn and 2019 PSP award vesting in light of the wider

socio-economic environment and the wider workforce;

– Reviewed the 2022 bonus metrics;

– Approved grants under the share option scheme (to senior managers below

Operating Board level);

– Approved the all-colleague SAYE and SIP scheme grants;

DIRECTORS’ REMUNERATION REPORT CONTINUED

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Greggs plc

– Reviewed Executive Directors’ and senior management’s shareholdings in the Company,

in the context of shareholding guidelines;

– Held a listening group with colleagues to support understanding of the work of

the Remuneration Committee;

– Agreed the leaving terms for Roger Whiteside;

– Agreed the appointment terms for Roisin Currie; and

– Reviewed and agreed changes to the variable pay elements of Richard Hutton’s

remuneration package.

Structure and content of the remuneration report

The remuneration report has been prepared in accordance with the provisions of the

Companies Act 2006 (the ’Act’) and The Large and Medium-sized Companies and Groups

(Accounts and Reports) (Amendment) Regulations 2013 (the ‘Regulations’). It also meets

the requirements of the UK Listing Authority’s Listing Rules.

The Regulations also require our auditor to report to shareholders on the audited information

within this remuneration report and to state whether, in their opinion, the relevant sections

have been prepared in accordance with the Act and the Regulations. The auditor’s opinion is

set out on pages 108 to 115 and we have indicated appropriately the audited sections of this

remuneration report.

Remuneration advice

The Chief Executive along with Jonathan Jowett (Company Secretary and General Counsel),

and Emma Walton (People Director) are normally invited to attend the Committee meetings

in order to provide advice and support to the Committee. The Finance Director attends where

required. During the year Korn Ferry (who have no connection to the Company or any individual

Director) provided remuneration advice the Committee. Korn Ferry were appointed as

advisors by the Committee in December 2017 following an informal tender process.

Korn Ferry is a signatory to the Remuneration Consultants’ Code of Conduct in relation to

executive remuneration consulting in the UK.

The Committee reviewed the operating processes in place at Korn Ferry and is satisfied that

the advice it receives is objective and independent. Fees paid to Korn Ferry during the year

were £65,000. Korn Ferry did not provide any other services to the Company during 2021.

Shareholder dialogue

The Committee actively engages with shareholders and their views and these are taken

into account in shaping both remuneration policy and practice.

AGM voting outcomes

The voting outcome from the 2021 AGM reflected both strong individual and institutional

shareholder support and the results are outlined below.

Approve the remuneration report

Total number

of votes

% of

votes cast

For 64,565,155 97.32%

Against 1,780,311 2.68%

Total votes cast (excluding votes withheld) 66,345,439 100.00%

Votes withheld 5,354,514

Total votes cast (including votes withheld) 71,699,980

Shareholders were asked to approve the remuneration policy at the 2020 AGM and the results

are outlined below:

Approve the remuneration policy

Total number

of votes

% of

votes cast

For 66,782,219 95.71%

Against 2,990,047 4.29%

Total votes cast (excluding votes withheld) 69,772,266 100.00%

Votes withheld 4,777,374

Total votes cast (including votes withheld) 74,549,640

Annual Report and Accounts 2021Greggs plc

C. How our remuneration policy will be implemented in 2022 – Executive Directors

The section below summarises the implementation of our remuneration policy for 2022.

Base salary 2022

The annual base salaries for the Executive Directors were reviewed with effect from 1 January

2022; increases and current salaries are outlined below:

Director

Salary

1 January 2021

Salary

1 January 2022 % increase

Roger Whiteside (Chief Executive) £575,209 £575,209 0%

Richard Hutton (Finance Director) £380,000 £393,300 3.5%

Salary

1 February 2022

(CEO Designate)

Salary

17 May 2022

(Chief Executive)

Roisin Currie £400,000 £600,000

With effect from 1 January 2022 the Committee agreed a salary increase of 3.5%

for the Finance Director, in line with the base increase for the workforce generally.

As Roger Whiteside is under his period of notice through to 5 January 2023 he was not

awarded the annual base salary increase. His current salary and benefits will be payable

up to and including 5 January 2023.

There will be a transition period for Roisin Currie prior to becoming Chief Executive. As of

1 February 2022, Roisin Currie was appointed as an Executive Director in the role of CEO

Designate. Following the AGM, and subject to election by shareholders, she will be appointed

as Chief Executive with immediate effect. Roger Whiteside will step down from the Board

at the AGM.

Pension contribution 2022

As per our remuneration policy, contributions for the current Chief Executive (Roger

Whiteside) and Finance Director will reduce following a glide path over a five-year period

from 1 January 2021, reducing by 3.7% and 2% of salary p.a., respectively, until contributions

are aligned to the rate applying to majority of the workforce.

On appointment as an Executive Director on 1 February 2022, in accordance with our

Remuneration Policy, the pension contribution for Roisin Currie will be 4%, in line with

the pension contribution of the majority of the workforce.

The pension contribution rates for 2022 (all of which are cash in lieu) are:

Roger Whiteside 15.1%

Richard Hutton 10.0%

Roisin Currie 4.0%

Annual bonus 2022

The annual bonus opportunity for 2022 is outlined below:

Chief Executive

Maximum opportunity of 125% of base salary. Bonus in excess of 50%

of maximum will be payable in shares deferred for two years.

CEO Designate

Maximum opportunity of 100% of base salary. Bonus in excess of 50%

of maximum will be payable in shares deferred for two years.

Finance Director

Maximum opportunity of 125% of base salary. Bonus in excess of 50%

of maximum will be payable in shares deferred for two years.

Any bonus for Roger Whiteside for 2022 will be on the basis of his employment up to 17 May

2022. He will not be entitled to receive a bonus for the period from 18 May 2022.

Richard Hutton’s bonus opportunity will increase from 100% to 125% of basic salary to align

with the current bonus level for the Chief Executive and the limit in the remuneration policy

to further incentivise him to drive outperformance during a period of management change,

and to help ensure his ongoing commitment and retention.

Roisin Currie’s maximum bonus opportunity will be 100% of base salary for the period she is in

the role of CEO Designate from 1 February 2022 to 16 May 2022. As of 17 May 2022, when Roisin

Currie is appointed as Chief Executive, her bonus opportunity will increase to 125% of salary.

The annual bonus is based on performance against a range of financial and strategic

performance measures. This range of metrics measures achievement of the Company’s key

operational objectives. The Committee reviews the key performance indicators (KPIs) each

year and varies them as appropriate to reflect the priorities for the business in the year ahead.

Where appropriate a sliding scale of targets is set for each KPI to encourage continuous

improvement, or sustained high performance with a maximum of 10% bonus paid out for

threshold performance for the profit and sales elements of the bonus.

Targets are normally set at the start of the year by the Committee using the outturn and

performance in the previous year, as well as the business plan, to determine appropriately

stretching sliding scales. Bonus targets for the forthcoming year are considered to be

DIRECTORS’ REMUNERATION REPORT CONTINUED

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

Greggs plc

commercially sensitive. Retrospective disclosure of the targets and performance against

them will be made in next year’s annual report on remuneration.

The bonus metrics are:

Measure Profit Sales Strategic objectives

Weighting 50% of total 20% of total 30% of total

Detail and link

to strategy

Reflects the profit of the

Group (excluding exceptional

items) before tax. This will

be based on meeting and

exceeding budget for

the year.

Based on company-

managed shop like-for-

like sales excluding any

additional shops opened

during the bonus year.

Outlined below.

The strategic objectives for each bonus cycle are based on measures which will provide a

strong link to strategy and our four key growth drivers as well as recognising our responsibility

and commitments in The Greggs Pledge. For the 2022 bonus there will be three strategic

objectives each relating to 10% of the bonus opportunity. They are:

– 10% based on business efficiency/cost savings;

– 10% based on growth in evening sales; and

– 10% based on an element of The Greggs Pledge (food waste targets).

Following a review of performance by the Committee, any payment under the non-profit-

based element of the bonus may be scaled back (potentially to zero) at the discretion of the

Committee, in the event that the profit performance for the year is judged to be running

significantly below that required for the achievement of the long-term strategy.

PSP award 2022

PSP awards will be granted as follows:

Chief Executive (Roisin Currie) 150% of base salary

Finance Director 150% of base salary

Richard Hutton will receive an award at a level of 150% of salary. Although the normal

maximum grant level under the remuneration policy is 125% of salary, we can grant up to 150%

in exceptional circumstances. The Committee believe such circumstances now exist, as the

Company undergoes an evolution in leadership and Richard Hutton is critical in helping to

support this transition. The Committee believe his knowledge and experience will be essential

and therefore his long-term incentive award should be appropriately pitched to reflect the key

contribution he is expected to make over the next few years.

The PSP awards for the Executive Directors are normally granted in the period following the

announcement of the financial results for the prior year. This will continue to be the case for

the 2022 PSP award for the Finance Director.

The 2022 PSP award for Roisin Currie will be granted the day after her appointment into the

role of Chief Executive, 18 May 2022.

In light of his retirement, no PSP award will be granted to Roger Whiteside in 2022.

Performance conditions will continue to be based on an equal split of two different financial

measures, EPS and ROCE. These measures provide a rounded assessment of our overall

profitability against stretching targets set in line with the strategic plan and business outlook

over the performance period. For these awards both the EPS and ROCE range have been

set to ensure that the targets remain appropriate in light of our business strategy over the

coming three-year period, whilst taking into account the impact of corporation tax changes

on the metrics. For 2022 we will be reverting to the percentage growth in EPS instead of

absolute growth.

For the 2022 awards the target ranges will be as follows:

– The EPS performance condition will require average annual growth in EPS over

the performance period to be between 3.0% and 8.0%; and

– The ROCE condition will require average ROCE over the performance period to be

between 19.6% to 22.6%.

In both cases 25% of an award will vest on achieving threshold performance and thereafter

straight-line sliding scales will apply until stretch performance is achieved.

The EPS and ROCE targets represent a significant increase compared to the targets for

the 2020 PSP awards.

A holding period is attached to vested PSP awards, requiring the vested shares to be held

(net of tax and other deductions) for a further two years.

100

Annual Report and Accounts 2021Greggs plc

How our remuneration policy will be implemented in 2022 – Non-Executive Directors

In order to ensure that no Director is involved in deciding their own remuneration, the fees

payable to Non-Executive Directors are set, after consultation with the Chair, by a Committee

of the Board consisting only of the Executive Directors. The fees payable to the Chair are set

by the Remuneration Committee.

The Non-Executive Directors are paid an annual base fee and additional responsibility fees

for the role of Senior Independent Director (SID) or for chairing a Board Committee.

These fees are usually reviewed and set annually. The fees were increased by 3.5% on

1 January 2022 in line with the base salary increase for the whole workforce. Following

a review of both the Audit and Remuneration committee chair roles and the Senior

Independent Director role, the additional fee for these roles was increased to £12,000 pa

from 1 April 2022. This is to ensure the fee reflects both the time commitment required

and the current market rates.

Details of the fees being paid to Non-Executive Directors in 2022 are set out below:

Name Position Base fee

Annual

additional fee

to 31 March

2022

Annual

additional fee

from 1 April

2022

Fee

to 31 March

2022

Fee

from 1 April

2022

Ian Durant Chair £205,256 – – £205,256 £205,256

Kate Ferry Chair of the Audit

Committee £52,630 £10,526 £12,000 £63,156 £64,630

Helena

Ganczakowski

Chair of the

Remuneration

Committee £52,630 £10,526 £12,000 £63,156 £64,630

Sandra Turner Non-Executive

Director & SID £52,630 £7,894 £12,000 £60,524 £64,630

Mohamed Elsarky Non-Executive

Director £52,630 – – £52,630 £52,630

These fees may be subject to change during the year based on any change in responsibility or time commitment or to ensure

they remain in line with the current market rates.

D. How our remuneration policy was implemented in 2021

Total Executive Director remuneration payable for 2021 (audited).

The following table presents the remuneration payable for 2021 (showing the equivalent

figures for 2020) for the Executive Directors.

Salary

Pension

contribution

(including

salary in lieu)

Taxable

benefits

Total fixed

remuneration

Annual incentives

(including profit

share)

Performance

Share Plan

Total variable

remuneration

Total

remuneration

Roger Whiteside

2021 575,209 108,139 12,644 695,992 716,854 547,022 1,263,876 1,959,868

2020 518,461

116,654 14,204

649,319 – – – 649,319

Richard Hutton

2021 380,000 44,387 9,500 433,887 378,860 258,121 636,981 1,070,868

2020 312,586

42,549 10,441 365,576 – – – 365,576

Notes:

1 The value of the PSP award for 2021, due to vest on 11 April 2022, is based on the level of vesting (50%) and the average share

price over the final three months of the financial year of £30.78. The amount attributable to share price appreciation is

£221,797 for Roger Whiteside and £104,661 for Richard Hutton. This figure will be trued up in the 2022 report to reflect

the share price at the vesting date.

2 For the period of 1 April 2020 to 31 August 2020 the salaries of the Executive Directors were voluntarily reduced by 20%.

3 Taxable benefits relate to cash-in-lieu of a company car, private medical health care and travel expenses paid.

4 This figure has been amended to include taxable travel expenses which were omitted in the 2020 report.

Fees for Non-Executive Directors (audited)

The fees for Non-Executive Directors were as follows:

2021 2020

Ian Durant £198,315 £178,750

Helena Ganczakowski £61,020 £51,575

Peter McPhillips* £29,663 £45,833

Sandra Turner £58,478 £53,565

Kate Ferry £61,020 £55,000

Mohamed Elsarky** £26,966 –

* Peter McPhillips retired from the Board on 31 July 2021

** Mohamed Elsarky joined the Board on 1 June 2021

For the period 1 April 2020 to 31 August 2020 the fees of the Chair and Non-Executive Directors

were voluntarily reduced by 20%.

DIRECTORS’ REMUNERATION REPORT CONTINUED

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Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

101

Greggs plc

Annual bonus 2021 (audited)

The table below outlines the bonus performance conditions in respect of the 2021 bonus

scheme.

Measure Strategic objective Weighting Entry Target Stretch Actual %

Profit

(£)

To deliver target

profit before tax

(excluding

exceptional items

and property profits)

50% £98.0m £103.0m £108.0m £145.6m 50.0%

Sales

(%)

Two-year like-for-

like sales

performance

20% (8.0%) (7.0%) (6.0%) (3.3%) 20.0%

Strategic

(£)

Cost savings 10% £3.0m £5.0m £7.0m £7.78m 10.0%

Strategic Reduction in

food waste

5% £5.13m £4.86m 17.7%

reduction

to £4.44m

5.0%

Strategic Increase food

redistribution*

5% 21.45% 29.25% 28.4% 4.7%

Strategic Sustainability* 10% See below Achieved 10.0%

Total weighting based on

balanced scorecard

100% 99.7%

* further details on the strategic targets are set out below

Reduction in food waste (5%)

Metric Maximum 10%

A 10% reduction in food

waste across our supply

sites based on our 2019

year end waste figure

(£5.4m)

5% reduction in total

food waste across our

supply sites to £5.13m

sliding scale to… 10% reduction in total

food waste across our

supply sites to £4.86m

Increase food redistribution (5%)

Metric Maximum 5%

Distribute an increased

percentage of unsold

food ahead of the 2019

end of year actual

of 19.5%

10% increase in amount

of unsold food

redistributed year-on-year

to 21.45%

sliding scale to… 50% increase in amount

of unsold food

redistributed year-on-year

to 29.25%

Sustainability (10%)

Metric Maximum 10%

Undertake analysis and

modelling of Scope 3

carbon emissions in line

with our Greggs Pledge

ambition to be ‘net zero’

by 2040

Undertake analysis

and modelling of Scope 3

carbon emissions and

present findings to

the Board

Agree and sign off with

the Board a clear, robust

action plan for the top

two focus areas as

identified through the

analysis and modelling

Bonus achieved for 2021

As % of maximum

Roger Whiteside 99.7%

Richard Hutton 99.7%

There were no bonus payments made in 2021 and therefore no deferred shares were awarded

to the Executive Directors in 2021 in respect to the 2020 bonus year.

Performance Share Plan award for performance over 2019-2021(audited)

The PSP award granted in 2019 measured EPS performance by reference to the three financial

years to 1 January 2022 and average annual ROCE over the three-year performance period

2019 to 2021. The performance targets that were set, together with the performance

delivered, are set out in the table below.

Metric Condition Threshold target Stretch target Actual* % vesting

Earnings per

share (50%)

Normalised **

average annual

EPS growth of

5 – 11% per annum

over three

financial years

5% p.a.

(12.5% vesting)

11% p.a.

(50%vesting)

22.7% 50%

ROCE (50%) Average annual

ROCE over the

three-year

performance

period

24%

(12.5% vesting)

28%

(50% vesting)

23.13% 0%

Total vesting 50%

* from 30 December 2018 the Company implemented IFRS 16 and chose to use the modified transition approach. The figures

for 2018 (which form the base for the measurement of the awards granted in 2019) were not restated and, as a result, were

determined on a different accounting basis to the 2021 results. The Remuneration Committee agreed at the time IFRS 16

was implemented to make appropriate adjustments to reflect the impact of IFRS 16. The adjustment figure is an increase to

102

Annual Report and Accounts 2021Greggs plc

profit before tax of £4.749 million giving an adjusted figure of £150.0 million. The tax charge is increased by £0.890 million to

give an adjusted profit after tax of £121 million. For the calculation of ROCE the total assets less current liabilities have been

reduced by £245.872 million to reflect the impact of the inclusion of right-of-use assets and current lease liabilities.

** normalised EPS is the Company’s reported earnings per share excluding exceptional items

The figures used for the measurement of PSP performance can be reconciled to the

statutory accounts as follows:

EPS

2021 as reported

(see page 116)

£m

IFRS 16

adjustments

£m

2021 for PSP

calculations

£m

Profit before tax 145.6 4.7 150.3

Income tax (28.1) (0.9) (29.0)

Profit after tax 117.5 3.8 121.3

Weighted average number of ordinary shares during

the year (see Note 9) 101,488,573 101,488,573 101,488,573

Earnings per share 115.7p 3.8p 119.5p

When compared to the 2018 base EPS of 71.1p the 2021 adjusted figure of 119.5p gives

an annual average increase of 22.7%.

ROCE

2021 as reported

£m

IFRS 16

adjustments

£m

2021 for PSP

calculations

£m

Profit before tax (see page 116) 145.6 4.7 150.3

Capital employed

Opening 586.5 (235.4) 351.1

Closing 681.5 (245.9) 435.6

Average 633.6 (240.6) 393.3

Return on capital employed 23.0% 38.2%

Adjusted ROCE in 2019 and 2020 was 33.6% and (2.4%), respectively, and when combined

with the adjusted figure for 2021 of 38.2% this gives an average of 23.13%

These awards will vest on 11 April 2022.

Performance Share Plan awards granted in 2021 (audited)

Performance Share Plan Awards granted during 2021 are as follows:

Executive

Type of

award

Basis of

award granted

Share price

at date of

grant (6 April

2021)

Number of

shares over

which award

was granted

Face value

of award

% of face

value that

would vest at

threshold

performance

Vesting

performance

measurement

period

Roger Whiteside

Nil-cost

options

150%

of salary £22.72 37,975 £862,812

25%

Financial

year 2023

Richard Hutton

125%

of salary £22.72 20,906 £475,000

For the 2021 grant there are two independent performance targets applying to an award.

Each performance target accounts for 50% of the award:

– 50% is subject to a performance target based on the Company’s earnings per share

(pence per share) in 2023 being between 77.2p and 105.3p.

– 50% is subject to a performance target based on the Company’s return on capital

employed being in 2023 to be in the range 14.8 % to 19.5%.

For each metric, 25% of the award will vest on achieving threshold performance and thereafter

straight-line sliding scales will apply until stretch performance is achieved. A holding period is

attached to vested PSP awards requiring the vested shares to be held (net of tax) for a further

two years.

DIRECTORS’ REMUNERATION REPORT CONTINUED

103

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

103

Greggs plc

Outstanding share awards (audited)

The following table sets out details of the PSP and savings-related share options (all of which

were granted at a £nil cost to the Executive Director concerned) held by, or granted to, each

Executive Director who served during the year:

At 23 January

2021 or date of

appointment

Granted

number

Exercised

number

Lapsed

number

At 1 January

2022 number

Exercise price

Date of grant

Market price of

each share at

date of grant

Date from

which

exercisable

Expiry date

Scheme

Roger Whiteside

57,303 – 57,303

– – £nil May 17 £10.72 May 20 May 27 PSP

52,800 – – 52,800 – £nil Mar 18 £11.96 Mar 21 Mar 28 PSP

35,543 – – – 35,543 £nil Apr 19 £18.30 Apr 22 Apr 29 PSP

46,228 – – – 46,228 £nil Oct 20 £14.07 Oct 23 Oct 30 PSP

– 37,975 – – 37,975 £nil Apr 21 £22.72 Apr 24 Apr 31 PSP

124 – 124

– – £9.54 Apr 18 Jun 21 Nov 21 SAYE

84 – – – 84 £14.84 Apr 19 Jun 22 Nov 22 SAYE

88 – – – 88 £14.24 Apr 20 Jun 23 Nov 23 SAYE

– 75 – – 75 £16.72 Apr 21 Jun 24 Nov 24 SAYE

192,170 38,050 57,427 52,800 119,993

Richard Hutton

27,041 – 27,041

– _ £nil May 17 £10.72 May 20 May 27 PSP

24,916 – – 24,916 – £nil Mar 18 £11.96 Mar 21 Mar 28 PSP

16,772 – – – 16,772 £nil Apr 19 £18.30 Apr 22 Apr 29 PSP

23,024 – – – 23,024 £nil Oct 20 £14.07 Oct 23 Oct 30 PSP

– 20,906 – – 20,906 £nil Apr 21 £22.72 Apr 24 Apr 31 PSP

124 – 124

– – £9.54 Apr 18 Jun 21 Nov 21 SAYE

84 – – – 84 £14.84 Apr 19 Jun 22 Nov 22 SAYE

88 – – – 88 £14.24 Apr 20 Jun 23 Nov 23 SAYE

– 75 – 75 £16.72 Apr 21 Jun 24 Nov 24 SAYE

92,049 20,981 27,165 24,916 60,949

Notes:

1 The market value on the date of exercise was £22.78 and the resultant gain on exercise was £1,305,362.

2 The market value on the date of exercise was £25.72 and the resultant gain on exercise was £2,006.

3 The market value on the date of exercise was £24.74 and the resultant gain on exercise was £668,994.

Options granted under the all-colleague SAYE scheme are not subject to performance

conditions. All PSP options are subject to performance conditions as detailed elsewhere

in this report.

The mid-market price of ordinary shares in the Company as at 1 January 2022 was £33.37.

The highest and lowest mid-market prices of ordinary shares during the financial year were

£34.16 and £17.71, respectively.

Legacy defined benefit pension scheme (audited)

The following table sets out the change in each Director’s accrued pension in the Company’s

defined benefit pension scheme during the year and their accrued benefits in the scheme at

the year end:

Executive Director Date of birth

Date service

commenced

Accrued

annual

pension

entitlement

as at

3 January

2021 £

Accrued

annual

pension

entitlement

as at

1 January

2022£

Increase in

accrued

pension

entitlement

for the year

Increase in

accrued

pension

entitlement

for the year

net of

inflation of

1.297%

Transfer

value of

increase in

accrued

pension

entitlement

for the year

Richard Hutton 3/6/68 1/1/98 18,522 18,522 – – –

Notes:

1 The pension entitlement shown is that which would be paid annually on retirement based on service to the end of the year,

but excluding any statutory increases which would be due after the year end.

2 The inflation rate of 1.297% shown in the table above is that published by the Secretary of State for Work and Pensions in

accordance with Schedule 3 of the Pensions Schemes Act 1993.

Cash equivalent

transfer value as

at 2 January 2021

Cash equivalent

transfer value as

at 1 January 2022

Increase in the

cash equivalent

transfer value

since 3 January

2021

Richard Hutton 392,930 412,351 –

Note:

Cash equivalent transfer values have been calculated in accordance with Actuaries Guidance Note GN11 and the increase is

stated net of contributions made by the Director. The transfer values disclosed above do not represent a sum paid or payable

to the individual Director. Instead they represent a potential liability of the pension scheme.

The main features of the defined benefit pension scheme are:

– Pension at normal retirement age of 1/60th of member’s final pensionable salary for each complete year and a

proportionate amount for each additional complete month of service from the date of joining the scheme until

5 April 2008 when the scheme was closed to future accrual;

– choice of giving up part of the pension in exchange for a tax-free cash sum subject to a limit of 25% of the total value

of the member’s benefits under the scheme;

– pension payable in the event of ill health;

– spouse’s pension on death; and

– normal retirement at age 65.

104

Annual Report and Accounts 2021Greggs plc

Chief Executive pay compared to performance

The graph below shows a comparison of the total shareholder return for the Company’s shares

for each of the last ten financial years against the total shareholder return for the companies

comprised in the FTSE 250 Index (excluding Investment Trusts) and the FTSE 350 Index

(excluding Investment Trusts).

These indices were chosen for this comparison because they include companies of broadly

similar size to the Company.

1000

900

800

700

600

500

400

300

200

100

31 Jan 11

29 Dec 12

28 Dec 13

03 Jan 15

02 Jan 16

31 Dec 16

30 Dec 17

29 Dec 18

28 Dec 19

01 Jan 22

02 Jan 21

FTSE 350

(excluding investment trusts)

GreggsFTSE 250

(excluding investment trusts)

Remuneration outcomes for Chief Executive over last ten years

The table below shows the total remuneration figure for the Chief Executive over the same

ten-year period as the graph above. The total remuneration figure includes the annual bonus,

pension and PSP/option awards which vested based on performance in those years.

2012 2013 2014 2015

2016

2017

2018

2019

2020

2021

Total remuneration £635,030 £1,011,381 £1,238,248 £2,473,695 £2,147,229 £1,689,265 £1,7 37,953 £2,540,966 £649,319 £1,959,868

Bonus (% of max potential) 18.0% 20.0% 100.0% 93.7% 86.7% 64.3% 59.2% 97.7% 0.0% 99.7%

PSP/options (% max potential) 78.3% n/a n/a 100% 100% 100% 80.2% 100% 0.0% 50%

total remuneration adjusted in these years to include expenses omitted in previous reports

Directors’ shareholding and share interests (audited)

Details of the shareholdings of each Executive Director and their connected persons as

at 1 January 2022 and their interests in shares are detailed below with the percentage

holding calculated using the share price at that date. As stated in the Directors’ remuneration

policy, Executive Directors are required to build a shareholding equivalent in value to 200%

of basic salary.

Director

Beneficially

owned at

1 January 2022

Beneficially

owned at

2 January 2021

Outstanding PSP

awards

Outstanding

option awards

% shareholding

achieved at

1 January 2022

Roger Whiteside 88,661 161,846 119,746 247 514%

Richard Hutton 98,391 94,014 60,702 247 864%

Ian Durant 11,700 11,700 – – n/a

Helena

Ganczakowski 1,100 1,100 – – n/a

Sandra Turner 1,000 1,000 – – n/a

Kate Ferry 562 562 – – n/a

Mohamed Elsarky – –

1 As at date of appointment (21 June 2021)

There have been no changes since 1 January 2022 in the Directors’ interests noted above. Further details of outstanding share

awards are given on page 103.

Roisin Currie was appointed to the Board as CEO Designate on 1 February 2022. As at the date of this report, she had a beneficial

interest in 3,188 shares, options over 247 shares and outstanding PSP awards over 42,510 shares.

DIRECTORS’ REMUNERATION REPORT CONTINUED

105

Annual Report and Accounts 2021

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

105

Greggs plc

Exit payments or payments to past Directors (audited)

No payments for compensation or loss of office were paid to, or receivable by, any former

Director during the current or prior year.

Roger Whiteside will step down as Chief Executive and from the Board on 17 May 2022.

Prior to this date, he will receive his salary, pension and benefits as normal. As stated on page

98, his pension contribution rate for 2022 is set at 15.1% of his base salary. During the balance

of his notice period (which ends on 5 January 2023), he will receive monthly payments of his

salary, pension and benefits. During this period he will also be available to support the

transition process.

As he is retiring, the Remuneration Committee and the Board have agreed to treat Roger as a

good leaver. He will be entitled to receive an annual bonus for 2022 for the period worked up

to 17 May, with any bonus payment pro-rated to cover this period only. The bonus outcome will

depend on the achievement of the specific targets set for the year, and will be determined at

the normal time in early 2023.

His outstanding PSP awards will continue to vest at the normal time and be subject to the

satisfaction of the agreed performance targets. The awards granted in 2020 and 2021 will be

pro-rated to reflect the proportion of the vesting period completed by the time employment

ceases at the end of the notice period.

External directorships

Executive Directors may take up one Non-Executive Directorship outside of the Company

subject to the Board’s approval and provided that such an appointment is not likely to lead

to a conflict of interest. It is recognised that this can support a Director’s development and

enhance experience as well as benefit the Company. Executive Directors will be entitled to

retain the fees of such an appointment.

Roger Whiteside was appointed as Non-Executive Director of Card Factory plc effective from

4 December 2017. He retains the fees that he earns. In 2021 this fee was £45,000 (2020: £45,000).

Richard Hutton was appointed as Non-Executive Director of The Lakes Distillery Company plc

effective from 1 June 2018. He retains the fees that he earns. In 2021 this fee was £25,000

(2020: £19,167).

Relative importance of spend on pay

The Committee is aware of the importance of pay across the business and the table below

shows the expenditure and percentage change in the overall spend on all colleague costs

compared to other key financial indicators.

2021 £m 2020 £m

% increase/

(decrease)

All colleague costs 429.3 414.8 3.5%

Dividends 15.3 0.0 100%

Percentage change in remuneration of all Directors

The table below sets out the percentage change in remuneration for all Directors

(Executive and Non-Executive) compared to the wider workforce.

For this purpose the wider workforce is defined as all full-time head office management

colleagues as they too are entitled to receive benefits and annual bonus awards.

2021 2020

Salary

% change

Benefits

% change

Bonus

% change

Salary

% change

Benefits

% change

Bonus

% change

Roger Whiteside 10.9% (11.0%) 100.0% (8.3%) (39.2% ) (100.0%)

Richard Hutton 21.6% (9.0%) 100.0% (3.3%) (13.6%) (100.0%)

Ian Durant 10.9% n/a n/a (2.8%) n/a n/a

Helena Ganczakowski 18.3%

n/a n/a 7.5%

n/a n/a

Sandra Turner 9.2% n/a n/a (5.0%) n/a n/a

Kate Ferry 10.9% n/a n/a (8.3%)

n/a n/a

Peter McPhillips 10.9%

n/a n/a (4.5%) n/a n/a

Mohamed Elsarky n/a

n/a n/a n/a n/a n/a

All colleagues 1.9% (1.2%) 100% 4.1% 3.2% (100%)

1 For the period of 1 April 2020 to 31 August 2020 the salaries of the Executive Directors and Non-Executive Directors

were voluntarily reduced by20%

2 Helena Ganczakowski was appointed Chair of the Remuneration Committee during 2020 and therefore received an

additional payment for this role for part of the year

3 In order to provide a meaningful comparison where a director was appointed or retired during the year, the percentage

change figures have been calculated on a full-year equivalent value

4 Mohamed Elsarky was appointed during 2021 and therefore no annual change is shown

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Chief Executive pay ratio reporting

Outlined below is the ratio of the Chief Executive’s single figure of total remuneration for

2021 expressed as a multiple of total remuneration for UK colleagues.

The three ratios referenced below are calculated by reference to the colleagues at the 25th,

50th and 75th percentile. We additionally disclose the total pay and benefits and base salary

of the colleagues used to calculate the ratios.

In time, the table below will build to represent ten years of data:

Financial year Method

25th percentile

pay ratio Median pay ratio

75th percentile

pay ratio

2021 Option B 99:1 98:1 68:1

2020 Option B 30:1 30:1 28:1

2019 Option B 132:1 126:1 108:1

The 25th, median and 75th percentile data were calculated as at 21 February 2022.

Full year pay data for the 2021 financial year has been used to calculate the ratios.

Disclosure of colleague data used to calculate the ratios 25th percentile Median 75th percentile

Total pay and benefits £19,824 £19,966 £28,792

Base salary £18,853 £18,963 £26,577

The following adjustments have been made in order to calculate the figures above:

– We have used the assumption of a 40-hour week in order to calculate the hourly rate

for the Chief Executive from the single total remuneration figure; and

– As the hours our colleague work vary week to week we have converted their hourly rate

of pay into the equivalent 40-hour week in order that this is directly comparable with the

hourly rate for the Chief Executive.

Of the three options set out in the legislation for calculating the Chief Executive pay ratio,

we are using Option B – which uses Gender Pay Gap (GPG) data – to calculate the pay ratio.

We believe the steady nature of our workforce ensures that the representative group remains

the same as those individuals who are identified through the GPG reporting process. The

individuals represented at the 25th, median and 75th percentile are all colleagues within our

retail shops. The nature of our workforce and demographics are such that we have over 80% of

our colleagues working in our front-line shop operations which is characteristic of our sector.

As required in the regulations, we confirm our belief that the median pay ratio for the year

is consistent with the Company’s wider pay, reward and progression policies affecting our

colleagues and the impact that Covid-19 has had on executive remuneration.

Our pay reflects the key market in which we operate, although we also support our colleagues

with additional benefits such as profit share and SAYE participation. As previously outlined in

both our Chair’s statement and this report, we worked hard to support our colleagues in 2021.

In recognition of the magnificent job our teams have done in coping under such difficult

circumstances through 2021 and to recognise their hard work we brought forward the planned

2022 pay award for our operational teams by five months and for our graded management

team by two months. This increase in pay for these teams was therefore implemented in 2021

and was in addition to the pay award the teams received earlier in the year.

Changes in the basic salary of our Chief Executive have consistently been in line with the base

award given to all our colleagues over the last five years. Due to the impact of Covid-19 the

base pay award for our Chief Executive was cancelled in 2020 and he voluntarily took a 20%

reduction in base salary for the five-month period between April and August 2020. His variable

pay was also impacted in 2020.

Although the variable pay of the Chief Executive has increased over the representative period,

this was due to a strong 2021 financial result. Subsequently all eligible colleagues will benefit

from a record profit share pay out in their March 2022 pay.

This report was approved by the Board on 8 March 2022.

Signed on behalf of the Board

Dr Helena Ganczakowski

Chair of the Remuneration Committee

8 March 2022

DIRECTORS’ REMUNERATION REPORT CONTINUED

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STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

107

Greggs plc

The Directors are responsible for preparing the strategic report and the Directors’ report,

the Directors’ remuneration report and the accounts in accordance with applicable law

and regulations.

Company law requires the Directors to prepare Group and Parent Company accounts for each

financial year. The Directors have elected under company law and are required under the

Listing Rules of the Financial Conduct Authority to prepare the Group financial statements

in accordance with UK-adopted International Accounting Standards. The Directors have

elected under company law to prepare the Company accounts in accordance with UK-adopted

International Accounting Standards.

The Group and Parent Company financial statements are required by law and UK-adopted

International Accounting Standards to present fairly the financial position of the Group and

the Parent Company and the financial performance of the Group; the Companies Act 2006

provides in relation to such accounts that references in the relevant part of that Act to

accounts giving a true and fair view are references to their achieving a fair presentation.

Under company law the Directors must not approve the accounts unless they are satisfied

that they give a true and fair view of the state of affairs of the Group and the Parent Company

and of the profit or loss of the Group for that period.

In preparing each of the Group and Parent Company financial statements, the Directors

are required to:

a. select suitable accounting policies and then apply them consistently;

b. make judgements and accounting estimates that are reasonable and prudent;

c state whether they have been prepared in accordance with UK-adopted International

Accounting Standards;

d. prepare the accounts on the going concern basis unless it is inappropriate to presume

that the Group and the Parent Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient

to show and explain the Group’s and the Parent Company’s transactions and disclose with

reasonable accuracy at any time the financial position of the Group and the Parent Company

and enable them to ensure that the accounts and the Directors’ remuneration report comply

with the Companies Act 2006. They are also responsible for safeguarding the assets of the

Group and the Parent Company and hence for taking reasonable steps for the prevention and

detection of fraud and other irregularities.

Directors’ statement pursuant to the disclosure and transparency rules

Each of the Directors, whose names and functions are listed in the Directors’ report confirm

that, to the best of each person’s knowledge:

a. the accounts, prepared in accordance with the applicable set of accounting standards,

give a true and fair view of the assets, liabilities, financial position and profit of the Parent

Company and the undertakings included in the consolidation taken as a whole; and

b. the strategic report and the Directors’ report contained in the annual report includes a

fair review of the development and performance of the business and the position of the

Company and the undertakings included in the consolidation taken as a whole, together

with a description of the principal risks and uncertainties that they face.

The Directors are responsible for the maintenance and integrity of the corporate and financial

information included on the Greggs plc website.

Legislation in the United Kingdom governing the preparation and dissemination of accounts

may differ from legislation in other jurisdictions.

Roger Whiteside Richard Hutton

Chief Executive Finance Director

8 March 2022

STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND ACCOUNTS

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GREGGS PLC

Opinion

We have audited the financial statements of Greggs plc (the ‘Parent Company’) and its

subsidiaries (the ‘Group’) for the 52 weeks ended 1 January 2022 which comprise the

Consolidated Income Statement, the Consolidated Statement of Comprehensive Income,

Balance Sheets, Statements of Changes in Equity, Statement of Cashflows and notes to

the financial statements, including significant accounting policies. The financial reporting

framework that has been applied in the preparation of the Group financial statements is

applicable law and UK-adopted International Accounting Standards. The financial reporting

framework that has been applied in the preparation of the Parent Company financial

statements is applicable law and UK-adopted International Accounting Standards and,

as regards the Parent Company financial statements, as applied in accordance with the

provisions of the Companies Act 2006.

In our opinion:

– the financial statements give a true and fair view of the state of the Group’s and of the

Parent Company’s affairs as at 1 January 2022 and of the Group’s profit for the 52 weeks

then ended;

– the Group financial statements have been properly prepared in accordance with UK-

adopted International Accounting Standards;

– the Parent Company financial statements have been properly prepared in accordance

with UK-adopted International Accounting Standards and as applied in accordance

with the Companies Act 2006; and

– the financial statements have been prepared in accordance with the requirements

of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs

(UK)) and applicable law. Our responsibilities under those standards are further described in

the Auditor’s responsibilities for the audit of the financial statements section of our report.

We are independent of the Group and Parent Company in accordance with the ethical

requirements that are relevant to our audit of the financial statements in the UK, including

the FRC’s Ethical Standard as applied to listed public interest entities and we have fulfilled our

other ethical responsibilities in accordance with these requirements. We believe that the audit

evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Summary of our audit approach

Key audit matters Group and Parent Company

– Valuation of lease liabilities

– Impairment of property, plant and equipment and right of use assets

– Accounting for defined benefit pension arrangements

Materiality Group

– Overall materiality: £7.00 million

– Performance materiality: £4.55 million

Parent Company

– Overall materiality: £6.90 million

– Performance materiality: £4.48 million

Scope Our audit procedures covered 100% of revenue, total assets and profit

before tax.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most

significance in our audit of the Group and Parent Company financial statements of the

current period 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

Group and Parent Company financial statements as a whole, and in forming our opinion

thereon, and we do not provide a separate opinion on these matters.

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GREGGS PLC

Key audit matters continued

Valuation of lease liabilities

Key audit matter description Refer to page 80 – Audit Committee report

Refer to page 127 and 128 – Basis of preparation (Key estimates and judgements)

Refer to page 146 and 147 – Note 11, Leases

Lease Liability – £283.2 million (2020: £291.7 million)

As the Group occupies and manages approximately 1,700 shops/leases, the application of IFRS 16 is considered to give rise to a significant risk of material

misstatement. IFRS 16 involves a significant element of judgement and estimation derived from a number of key assumptions. We consider the most

significant assumptions affecting the valuation of lease liabilities to be:

– the lease term assumed in determining the lease liability (particularly in respect of circumstances where the Group remains in occupation using rights

from the Landlord and Tennant Act 1954); and

– the discount rate applied to calculate the lease liability.

Changes to the assumptions included above are likely to have a material impact on the valuation of lease liabilities and given the value of these liabilities in

comparison to Group materiality, as well as the significant estimates and judgements involved, we consider this area to represent a significant audit risk.

How the matter was addressed in the audit Our audit work relating to the valuation of lease liabilities included:

1. Testing the accuracy and completeness of the underlying information used in the application of IFRS 16.

2. Critically assessing the key assumptions utilised by management including the lease term and discount rate.

3. Testing that the calculations made were accurate through reperformance.

4. Assessing the application of and accounting for changes throughout the year including the treatment of new leases, modifications to leases,

the unwinding of interest and capital payments in respect of lease liabilities.

5. Reviewing disclosures relating to lease liabilities to ensure they are in accordance with the applicable financial reporting framework.

Key observations Our audit work in respect of the valuation of lease liabilities concluded that the related balances are not materially misstated, and the disclosures

management have made are appropriate.

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Impairment of property, plant and equipment and right of use assets

Key audit matter description Refer to page 79 – Audit Committee report

Refer to page 126 – Basis of preparation (Key estimates and judgements)

Refer to pages 148 to 151 – Note 12, Property, plant an equipment

Net impairment reversal of £3.5 million (2020: £14.0 million impairment charge)

The emergence of Covid-19 during the prior year, the resultant closure of stores during lockdown and the impact on footfall/demand following reopening

gave rise to risks relating to the impairment of property, plant and equipment and right of use assets.

As a result, significant impairment charges were recognised in the prior year. While Covid-19 has impacted the early part of 2021 with further national

lockdowns, a strong recovery in performance across the business in the remainder of 2021 resulted in reversals of impairment. There remains significant

uncertainty in respect of the ongoing impact of the Covid-19 pandemic with sales in some locations remaining below 2019 (pre-pandemic) levels.

Property, plant and equipment includes the assets located in shops associated with the direct service of customers and supply chain assets fundamental

to manufacture and delivery of products to shops and right of use assets principally comprise the Groups’ approximately 1,700 company-managed shops.

In assessing impairment, management’s discounted cash flow analysis incorporates a number of significant judgements, estimates and

assumptions including:

– the use of historic cashflows (particularly where the environment in which the shops operate is fundamentally different as a result of Covid-19)

– attributable overheads

– growth rates

– discount rates

– the remaining lease term and whether it is appropriate to assume a longer period in performing the impairment assessment.

The existence of significant elements of judgement and estimation, combined with the rapidly changing economic environment means that

we considered the impairment/reversal of impairment of property, plant and equipment and right of use assets to be a significant audit risk.

How the matter was addressed in the audit In addressing the risk relating to impairment of property, plant and equipment and right of use assets we:

1. Assessed the appropriateness of underlying assumptions applied in the impairment calculations in the context of current and future forecast

performance of the underlying assets in line with IAS 36.

2. Performed sensitivity analysis to assess the level of headroom in the impairment calculations and to identify the most sensitive assumptions

on which we should focus our work.

3. Reviewed key inputs such as the discount rate and long-term growth rates, utilising valuation specialists in respect of discount rates.

4. Discussed future plans with key management outside of the finance function to further assess the assumptions used in the model.

5. Assessed the accuracy of historic forecasts to support the assumptions used in the current year model.

6. Checked for consistency of the forecast information used and sensitivities applied in respect of the impairment of assets to other areas

considered as part of the audit which rely on similar information and assumptions, including going concern.

7. Reviewed the adequacy of disclosures made in respect of key estimates and judgements used in impairment reviews.

Key observations Our audit work in respect of the impairment of property, plant and equipment and right of use assets concluded that the related balances

were not materially misstated, and the disclosures management have made are appropriate.

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GREGGS PLC

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111

Accounting for defined benefit pension arrangements

Key audit matter description Refer to page 80 – Audit Committee report

Refer to page 128 – Basis of preparation (Key estimates and judgements)

Refer to pages 156 to 160 – Note 21, Employee benefits

Defined Benefit Pension Liability – £2.4 million net liability (2020: £11.9 million net liability)

The liability recognised in respect of defined benefit pension scheme obligations is based on a valuation undertaken by an actuary

and key estimates and assumptions include:

– discount rates

– inflation rates

– mortality rates

– future pension increases

– commutation

– guaranteed minimum pension

These assumptions are subject to significant management judgement on concluding if the actuarial assumptions are appropriate and are also

sensitive to small changes.

In addition, judgement is required in determining whether under IAS 19 and IFRIC 14 a net pension surplus should be recognised and whether a liability

should be recognised for any minimum funding requirements. Specifically judgements include assessing whether the Group have an unconditional

right to refund and estimating the recoverable amount of any potential refunds. The Group committed during the year to make additional payments

of £2.5 million per year, of which £12.5 million were outstanding at 1 January 2022.

How the matter was addressed in the audit Our audit work relating to the valuation of lease liabilities included:

1. Utilising an actuarial expert to review the adequacy of the key actuarial assumptions.

2. Reviewing management’s assessment of IFRIC 14 including legal advice obtained. This included reviewing the Scheme Rules and consulting

with our actuarial expert in considering if management’s assessment was appropriate.

3. Considered the adequacy of the Group’s disclosures in respect of the sensitivity of the defined benefit pension scheme to the key actuarial

assumptions and the judgements involved in respect of the application of IFRIC 14.

Key observations Our audit work in respect of the defined benefit pension obligation concluded that the related balances were not materially misstated and the

disclosures management have made are appropriate.

Our application of materiality

When establishing our overall audit strategy, we set certain thresholds which help us to determine the nature, timing and extent of our audit procedures. When evaluating whether the effects

of misstatements, both individually and on the financial statements as a whole, could reasonably influence the economic decisions of the users we take into account the qualitative nature and

the size of the misstatements. Based on our professional judgement, we determined materiality as follows:

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GREGGS PLC

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Annual Report and Accounts 2021Greggs plc

Group Parent Company

Overall materiality £7.00 million £6.90 million

Basis for determining overall materiality 4.8% of profit before tax 4.7% of profit before tax

Rationale for benchmark applied Profit before tax is the primary measure used by the shareholders in assessing the performance of the Group and is a generally accepted auditing benchmark.

Performance materiality £4.55 million £4.48 million

Basis for determining

performance materiality

65% of overall materiality 65% of overall materiality

Reporting of misstatements to

the Audit Committee

Misstatements in excess of £350,000 and misstatements below that

threshold that, in our view, warranted reporting on qualitative grounds.

Misstatements in excess of £345,000 and misstatements below that

threshold that, in our view, warranted reporting on qualitative grounds.

The materiality for the audit was revisited during the audit to reflect the changes to expected

outturn for the period.

An overview of the scope of our audit

The Group consists of the Parent Company and nine subsidiaries all of which are dormant or

non-trading. The Group audit team audited the only significant component being the Parent

Company. In doing so the coverage achieved by our audit procedures was 100% of Group

revenue, total assets and profit before tax.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Directors’ use of the going

concern basis of accounting in the preparation of the financial statements is appropriate.

Our evaluation of the Directors’ assessment of the Group’s and Parent Company’s ability to

continue to adopt the going concern basis of accounting included:

1. Assessing the forward-looking assumptions used by management in their assessment

of going concern.

2. Corroborating key management assumptions to supporting evidence including financing

arrangements in place.

3. Challenging management’s assumptions including performing downside sensitivities in

respect of key assumptions.

4. Considering the adequacy of management’s scenario analysis and contingency plans.

5. Checking the integrity and mechanism of the forecast model provided by management.

6. Obtaining evidence of Board approval of the budgets and forecasts.

7. Assessing historical forecast accuracy.

8. Re-calculating management’s covenant calculations to assess the risk of forecast

non-compliance.

9. Evaluating the adequacy of going concern related disclosures in the financial statements.

Based on the work we have performed, we have not identified any material uncertainties

relating to events or conditions that, individually or collectively, may cast significant doubt

on the Group’s or the Parent Company’s ability to continue as a going concern for the period

of assessment to December 2023.

In relation to the entity reporting on how they have applied the UK Corporate Governance

Code, we have nothing material to add or draw attention to in relation to the Directors’

statement in the financial statements about whether the Directors considered it appropriate

to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the Directors with respect to going concern

are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the

financial statements and our auditor’s report thereon. The Directors are responsible for the

other information contained within the annual report. Our opinion on the financial statements

does not cover the other information and, except to the extent otherwise explicitly stated in

our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other

information is materially inconsistent with the financial statements or our knowledge obtained

in the course of the audit or otherwise appears to be materially misstated. If we identify such

material inconsistencies or apparent material misstatements, we are required to determine

whether this gives rise to a material misstatement in the financial statements themselves.

If, based on the work we have performed, we conclude that there is a material misstatement

of this other information, we are required to report that fact.

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GREGGS PLC

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GREGGS PLC

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, the part of the Directors’ remuneration report to be audited has been

properly prepared in accordance with the Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit:

– the information given in the strategic report and the Directors’ report for the financial

year for which the financial statements are prepared is consistent with the financial

statements; and

– the strategic report and the Directors’ report have been prepared in accordance with

applicable legal requirements.

Matters on which we are required to report

by exception

In the light of the knowledge and understanding of the Group and the Parent Company

and their environment obtained in the course of the audit, we have not identified material

misstatements in the strategic report or the Directors’ report.

We have nothing to report in respect of the following matters in relation to which the

Companies Act 2006 requires us to report to you if, in our opinion:

– adequate accounting records have not been kept by the Parent Company, or returns

adequate for our audit have not been received from branches not visited by us; or

– the Parent Company financial statements and the part of the Directors’ remuneration

report to be audited are not in agreement with the accounting records and returns; or

– certain disclosures of Directors’ remuneration specified by law are not made; or

– we have not received all the information and explanations we require for our audit.

Corporate governance statement

We have reviewed the Directors’ statement in relation to going concern, longer-term viability

and that part of the Corporate Governance Statement relating to the Parent Company’s

compliance with the provisions of the UK Corporate Governance Code specified for our

review by the Listing Rules.

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:

– Directors’ statement with regards the appropriateness of adopting the going concern

basis of accounting and any material uncertainties identified set out on page 125;

– Directors’ explanation as to their assessment of the Group’s prospects, the period

this assessment covers and why the period is appropriate set out on page 125;

– Director’s statement on whether it has a reasonable expectation that the Group

will be able to continue in operation and meets its liabilities set out on page 125;

– Directors’ statement on fair, balanced and understandable set out on page 76;

– Board’s confirmation that it has carried out a robust assessment of the emerging and

principal risks set out on page 60;

– Section of the annual report that describes the review of effectiveness of risk management

and internal control systems set out on page 82; and

– Section describing the work of the Audit Committee set out on pages 77 to 83.

Responsibilities of Directors

As explained more fully in the Directors’ responsibilities statement set out on page 107,

the Directors are responsible for the preparation of the financial statements and for being

satisfied that they give a true and fair view, and for such internal control as the Directors

determine is necessary to enable the preparation of financial statements that are free

from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Group’s

and the Parent Company’s ability to continue as a going concern, disclosing, as applicable,

matters related to going concern and using the going concern basis of accounting unless the

Directors either intend to liquidate the Group or the Parent Company or to cease operations,

or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as

a whole are free from material misstatement, whether due to fraud or error, and to issue an

auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,

but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect

a material misstatement when it exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be expected to

influence the economic decisions of users taken on the basis of these financial statements.

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GREGGS PLC

The extent to which the audit was considered capable of detecting irregularities,

including fraud

Irregularities are instances of non-compliance with laws and regulations. The objectives of

our audit are to obtain sufficient appropriate audit evidence regarding compliance with laws

and regulations that have a direct effect on the determination of material amounts and

disclosures in the financial statements, to perform audit procedures to help identify instances

of non-compliance with other laws and regulations that may have a material effect on the

financial statements, and to respond appropriately to identified or suspected non-compliance

with laws and regulations identified during the audit.

In relation to fraud, the objectives of our audit are to identify and assess the risk of material

misstatement of the financial statements due to fraud, to obtain sufficient appropriate

audit evidence regarding the assessed risks of material misstatement due to fraud through

designing and implementing appropriate responses and to respond appropriately to fraud

or suspected fraud identified during the audit.

However, it is the primary responsibility of management, with the oversight of those charged

with governance, to ensure that the entity’s operations are conducted in accordance with

the provisions of laws and regulations and for the prevention and detection of fraud.

In identifying and assessing risks of material misstatement in respect of irregularities,

including fraud, the Group audit engagement team:

– obtained an understanding of the nature of the industry and sector, including the legal

and regulatory framework that the Group and Parent Company operates in and how the

Group and Parent Company are complying with the legal and regulatory framework;

– inquired of management, and those charged with governance, about their own

identification and assessment of the risks of irregularities, including any known actual,

suspected or alleged instances of fraud; and

– discussed matters about non-compliance with laws and regulations and how fraud might

occur including assessment of how and where the financial statements may be susceptible

to fraud for regulated entities, as defined in ISA 250B: having obtained an understanding of

the effectiveness of the control environment.

The most significant laws and regulations were determined as follows:

Legislation/regulation Additional audit procedures performed by the Group audit engagement team included:

IFRS/UK adopted

IAS and Companies Act 2006

– Review of the financial statement disclosures and testing to supporting documentation

– Completion of disclosure checklists to identify areas of non-compliance

Tax compliance regulations – Inspection and review of tax computations prepared by management

– Input from a tax specialist was obtained regarding significant and complex matters

– Consideration of whether any matter identified during the audit required reporting to an appropriate authority outside the entity

Distributable profits legislation – Assessment of extent of compliance as part of our audit work relating to reserves

Pension legislation – Assessment of extent of compliance as part of our audit work relating to defined benefit pensions

Coronavirus Job Retention Scheme – Obtaining an understanding of the process by which claims were calculated and submitted

– Input from a tax specialist was obtained regarding significant and complex matters

– Inspection of correspondence with HMRC

Food Safety/Health and Safety/Employment/

General Data Protection Regulation

– Inquiry of management and Directors

– Inspection of correspondence with legal advisors and regulators (where applicable)

The areas that we identified as being susceptible to material misstatement due to fraud were:

Risk Audit procedures performed by the audit engagement team:

Revenue recognition – cut off – Testing a sample of transactions accounted pre and post year end for each significant revenue stream ensuring that revenue is recognised in

the correct accounting period in line with the Group’s accounting policy

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

– Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GREGGS PLC

A further description of our responsibilities for the audit of the financial statements is

located on the Financial Reporting Council’s website at: http://www.frc.org.uk/

auditorsresponsibilities. This description forms part of our auditor’s report.

Other matters which we are required to address

Following the recommendation of the Audit Committee, we were appointed by the

shareholders on 14 May 2021 to audit the financial statements for the 52-week period

ended 1 January 2022 and subsequent financial periods.

The period of total uninterrupted consecutive appointments is one year, covering the

52-week period ended 1 January 2022.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided

to the Group or the Parent Company and we remain independent of the Group and the

Parent Company in conducting our audit.

Our audit opinion is consistent with the additional report to the Audit Committee

in accordance with ISAs (UK).

Use of our report

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3

of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might

state to the Company’s members those matters we are required to state to them in an

auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not

accept or assume responsibility to anyone other than the Company and the Company’s

members as a body, for our audit work, for this report, or for the opinions we have formed.

Rachel Fleming (Senior Statutory Auditor)

For and on behalf of RSM UK Audit LLP, Statutory Auditor

Chartered Accountants

1 St. James’ Gate

Newcastle upon Tyne

NE1 4AD

8 March 2022

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CONSOLIDATED INCOME STATEMENT

FOR THE 52 WEEKS ENDED 1 JANUARY 2022 (2020: 53 WEEKS ENDED 2 JANUARY 2021)

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE 52 WEEKS ENDED 1 JANUARY 2022 (2020: 53 WEEKS ENDED 2 JANUARY 2021)

Note

2021

£m

2020

£m

Revenue 1 1 , 2 2 9 .7 81 1.3

Cost of sales (4 4 7.7) (3 0 0 . 4)

Cost of sales excluding exceptional items (4 4 7.7) (2 9 9 .6)

Exceptional items 4 – (0. 8)

Gross profit 78 2.0 5 10.9

Distribution and selling costs (56 7.6) (4 6 5 . 8)

Administrative expenses (6 1 . 2) (5 2 .1)

Operating profit/(loss) 15 3.2 (7. 0)

Finance expense (net) 6 (7. 6) (6 .7)

Profit/(loss) before tax 3-6 14 5.6 (1 3 .7)

Income tax 8 (2 8 .1) 0 .7

Profit/(loss) for the financial year attributable to equity holders of the Parent 11 7.5 (1 3 . 0)

Basic earnings/(loss) per share 9 1 1 5 .7p (1 2 .9p)

Diluted earnings/(loss) per share 9 11 4.3p (1 2 . 9p)

Note

2021

£m

2020

£m

Profit/(loss) for the financial year 11 7.5 (1 3 . 0)

Other comprehensive income

Items that will not be recycled to profit and loss:

Remeasurements on defined benefit pension plans 21 7.1 (11. 2)

Tax on remeasurements on defined benefit pension plans 8 (1 .7) 2 .1

Other comprehensive income for the financial year, net of income tax 5.4 (9 .1)

Total comprehensive income for the financial year 122 .9 (2 2 .1)

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Of the Group profit for the year

£117.6 million (2020: loss of

£12.9 million)is dealt with in

the books of the Parent Company.

The accounts on pages 116 to 167 were

approved by the Board of Directors on

8 March 2022 and were signed on its

behalf by:

Roger Whiteside

Richard Hutton

Company Registered Number 502851

Group Parent Company

Note

2021

£m

2020

£m

2021

£m

2020

£m

ASSETS

Non-current assets

Intangible assets 10 14. 9 15.6 14.9 15.6

Property, plant and equipment 12 34 3.8 3 45.3 344.4 345.9

Right-of-use assets 11 263.6 2 7 0 .1 263.6 270.1

Investments 13 – – 5.0 5.0

622 .3 6 31.0 627.9 636.6

Current assets

Inventories 15 2 7.9 22 .5 27.9 22.5

Trade and other receivables 16 3 7. 6 3 9.4 37.6 39.4

Assets held for resale 1.6 – 1.6 –

Current tax 19 0 .4 – 0.4 –

Cash and cash equivalents 17 198 .6 3 6.8 198.6 36.8

2 6 6 .1 9 8 .7 266.1 98.7

Total assets 888.4 7 2 9 .7 894.0 735.3

LIABILITIES

Current liabilities

Trade and other payables 18 (1 5 3 . 4) (9 1 .1) (161.1) (98.8)

Lease liabilities 11 (4 9 . 3) (4 8. 6) (49.3) (48.6)

Provisions 22 (4 . 2) (4. 4) (4.2) (4.4)

(206.9) (1 4 4 .1) (214.6) (151.8)

Non-current liabilities

Other payables 20 (3. 2) (3 .7) (3.2) (3.7)

Defined benefit pension liability 21 (2 . 4) (11.9) (2.4) (11.9)

Lease liabilities 11 (2 3 3 . 9) (24 3 .1) (233.9) (243.1)

Deferred tax liability 14 (1 0 . 0) (2 .3) (9.4) (1.8)

Long-term provisions 22 (2 . 8) (3 . 0) (2.8) (3.0)

(252.3) (2 6 4.0) (251.7) (263.5)

Total liabilities (4 5 9 . 2) (4 0 8 .1) (466.3) (415.3)

Net assets 429 . 2 3 21.6 427.7 320.0

EQUITY

Capital and reserves

Issued capital 23 2.0 2 .0 2.0 2.0

Share premium account 23 2 0.0 15. 7 20.0 15.7

Capital redemption reserve 23 0.4 0 .4 0.4 0.4

Retained earnings 406. 8 30 3.5 405.3 301.9

Total equity attributable to equity holders of the Parent 429 . 2 3 21.6 427.7 320.0

BALANCE SHEETS

AT 1 JANUARY 2022 (2020: 2 JANUARY 2021)

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STATEMENTS OF CHANGES IN EQUITY

FOR THE 52 WEEKS ENDED 1 JANUARY 2022 (2020: 53 WEEKS ENDED 2 JANUARY 2021)

Group

53 weeks ended 2 January 2021

Attributable to equity holders of the Company

Note

Issued

capital

£m

premium

£m

Capital

redemption

reserve

£m

Retained

earnings

£m

Total

£m

Balance at 29 December 2019 2.0 13. 5 0 .4 3 25.2 3 41 .1

Total comprehensive income for the year

Loss for the financial year – – – (1 3 . 0) (1 3. 0)

Other comprehensive income – – – (9 .1) (9 .1)

Total comprehensive income for the year – – – (2 2 .1) (2 2 .1)

Transactions with owners, recorded directly in equity

Issue of ordinary shares – 2.2 – – 2 .2

Sale of own shares – – – 1.5 1 .5

Purchase of own shares – – – (0 . 5) (0 .5)

Share-based payment transactions 21 – – – 0.9 0.9

Dividends to equity holders 23 – – – – –

Tax items taken directly to reserves 8 – – – (1.5) (1. 5)

Total transactions with owners – 2. 2 – 0 .4 2 .6

Balance at 2 January 2021 2.0 15.7 0.4 30 3.5 3 21.6

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STATEMENTS OF CHANGES IN EQUITY CONTINUED

FOR THE 52 WEEKS ENDED 1 JANUARY 2022 (2020: 53 WEEKS ENDED 2 JANUARY 2021)

Group

52 weeks ended 1 January 2022

Attributable to equity holders of the Company

Note

Issued

capital

£m

premium

£m

Capital

redemption

reserve

£m

Retained

earnings

£m

Total

£m

Balance at 3 January 2021 2.0 15 .7 0.4 303.5 32 1.6

Total comprehensive income for the year

Profit for the financial year – – – 1 1 7. 5 1 1 7. 5

Other comprehensive income – – – 5.4 5 .4

Total comprehensive income for the year – – – 12 2.9 122. 9

Transactions with owners, recorded directly in equity

Issue of ordinary shares – 4.3 – – 4. 3

Sale of own shares – – – 0. 3 0.3

Purchase of own shares – – – (1 0 . 0) (1 0 . 0)

Share-based payment transactions 21 – – – 2.2 2.2

Dividends to equity holders 23 – – – (1 5 . 3) (15 . 3)

Tax items taken directly to reserves 8 – – – 3. 2 3. 2

Total transactions with owners – 4.3 – (1 9 . 6) (1 5 .3)

Balance at 1 January 2022 2.0 20.0 0 .4 40 6.8 42 9. 2

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STATEMENTS OF CHANGES IN EQUITY CONTINUED

FOR THE 52 WEEKS ENDED 1 JANUARY 2022 (2020: 53 WEEKS ENDED 2 JANUARY 2021)

Parent Company

53 weeks ended 2 January 2021

Attributable to equity holders of the Company

Note

Issued

capital

£m

premium

£m

Capital

redemption

reserve

£m

Retained

earnings

£m

Total

£m

Balance at 29 December 2019 2.0 13.5 0.4 323.5 339.4

Total comprehensive income for the year

Loss for the financial year 7 – – – (12.9) (12.9)

Other comprehensive income – – – (9.1) (9.1)

Total comprehensive income for the year – – – (22.0) (22.0)

Transactions with owners, recorded directly in equity

Issue of ordinary shares – 2.2 – – 2.2

Sale of own shares – – – 1.5 1.5

Purchase of own shares – – – (0.5) (0.5)

Share-based payment transactions 21 – – – 0.9 0.9

Dividends to equity holders 23 – – – – –

Tax items taken directly to reserves 8 – – – (1.5) (1.5)

Total transactions with owners – 2.2 – 0.4 2.6

Balance at 2 January 2021 2.0 15.7 0.4 301.9 320.0

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STATEMENTS OF CHANGES IN EQUITY CONTINUED

FOR THE 52 WEEKS ENDED 1 JANUARY 2022 (2020: 53 WEEKS ENDED 2 JANUARY 2021)

Parent Company

52 weeks ended 1 January 2022

Attributable to equity holders of the Company

Note

Issued

capital

£m

premium

£m

Capital

redemption

reserve

£m

Retained

earnings

£m

Total

£m

Balance at 3 January 2021 2.0 15.7 0.4 301.9 320.0

Total comprehensive income for the year

Profit for the financial year 7 – – – 117.6 117.6

Other comprehensive income – – – 5.4 5.4

Total comprehensive income for the year – – – 123.0 123.0

Transactions with owners, recorded directly in equity

Issue of ordinary shares – 4.3 – – 4.3

Sale of own shares – – – 0.3 0.3

Purchase of own shares – – – (10.0) (10.0)

Share-based payment transactions 21 – – – 2.2 2.2

Dividends to equity holders 23 – – – (15.3) (15.3)

Tax items taken directly to reserves 8 – – – 3.2 3.2

Total transactions with owners – 4.3 – (19.6) (15.3)

Balance at 1 January 2022 2.0 20.0 0.4 405.3 427.7

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STATEMENTS OF CASHFLOWS

FOR THE 52 WEEKS ENDED 1 JANUARY 2022 (2020: 53 WEEKS ENDED 2 JANUARY 2021)

Group Parent Company

Note

2021

£m

2020

Restated

(see page 125)

£m

2021

£m

2020

Restated

(see page 125)

£m

Operating activities

Cash generated from operations (see page 123) 3 1 2 .1 61.6 312.1 61.6

Income tax paid (19.2) (1 0 .7) (19.2) (10.7)

Interest paid on lease liabilities 6 (6 . 3) (6 . 5) (6.3) (6.5)

Interest paid on borrowings and other related charges 6 (1 .1) (0. 8) (1.1) (0.8)

Net cash inflow from operating activities 285.5 43.6 285.5 43.6

Investing activities

Acquisition of property, plant and equipment (5 0 .5) (5 8 . 8) (50.5) (58.8)

Acquisition of intangible assets (3 . 8) (2. 8) (3.8) (2.8)

Proceeds from sale of property, plant and equipment 0.3 1.8 0.3 1.8

Interest received 6 – 0.6 – 0.6

Net cash outflow from investing activities (5 4 . 0) (59 .2) (54.0) (59.2)

Financing activities

Proceeds from issue of share capital 4.3 2 .2 4.3 2.2

Sale of own shares 0.3 1.5 0.3 1.5

Purchase of own shares (1 0 . 0) (0 .5) (10.0) (0.5)

Proceeds from loans and borrowings – 1 50.0 – 150.0

Dividends paid (1 5 . 3) – (15.3) –

Repayment of loans and borrowings – (1 5 0 .0) – (150.0)

Repayment of principal on lease liabilities (4 9 . 0) (4 2 .1) (49.0) (42.1)

Net cash outflow from financing activities (6 9 . 7) (3 8 .9) (69.7) (38.9)

Net increase/(decrease) in cash and cash equivalents 161.8 (5 4.5) 161.8 (54.5)

Cash and cash equivalents at the start of the year 17 36.8 91.3 36.8 91.3

Cash and cash equivalents at the end of the year 17 198.6 3 6.8 198.6 36.8

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STATEMENTS OF CASHFLOWS CONTINUED

FOR THE 52 WEEKS ENDED 1 JANUARY 2022 (2020: 53 WEEKS ENDED 2 JANUARY 2021)

Cash flow statement – cash generated from operations

Group Parent Company

Note

2021

£m

2020

£m

2021

£m

2020

£m

Profit/(loss) for the financial year 1 1 7. 5 (1 3. 0) 117.6 (12.9)

Amortisation 10 4.5 4.0 4.5 4.0

Depreciation – property, plant and equipment 12 5 4.2 5 6.9 54.2 56.9

Depreciation – right-of-use assets 11 4 8 .7 51.9 48.7 51.9

Net impairment (reversal)/charge – property, plant and equipment 12 (1 . 9) 5. 2 (1.9) 5.2

Net impairment (reversal)/charge – right-of-use assets (1 . 6) 8.8 (1.6) 8.8

Loss on sale of property, plant and equipment 0.9 0.5 0.9 0.5

Release of Government grants (0 . 5) (0 .5) (0.5) (0.5)

Share-based payment expenses 21 2. 2 0.9 2.2 0.9

Finance expense 6 7. 6 6 .7 7.6 6.7

Income tax expense 8 2 8 .1 (0.7) 28.0 (0.8)

(Increase)/decrease in inventories (5 . 4) 1 .4 (5.4) 1.4

Decrease/(increase) in receivables 1.8 (12 . 3) 1.8 (12.3)

Increase/(decrease) in payables 58.9 (4 8 . 2) 58.9 (48.2)

Decrease in provisions (0 . 4) – (0.4) –

Decrease in pension liability 21 (2 . 5) – (2.5) –

Cash from operating activities 3 1 2 .1 61.6 312.1 61.6

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NOTES TO THE CONSOLIDATED ACCOUNTS

Significant accounting policies

Greggs plc (the ‘Company’) is a company incorporated and domiciled in the UK. The Group accounts consolidate those of the Company and its

subsidiaries (together referred to as the ‘Group’). The results of the associate are not consolidated on the grounds of materiality. The Parent

Company accounts present information about the Company as a separate entity and not about its Group.

The accounts were authorised for issue by the Directors on 8 March 2022.

(a) Statement of compliance

On 31 December 2020, IFRS as adopted by the European Union at that date was brought into UK law and became UK-adopted International

Accounting Standards, with future changes being subject to endorsement by the UK Endorsement Board. The Group and Parent Company

transitioned to UK-adopted International Accounting Standards on 1 January 2021. This change constitutes a change in accounting framework.

However, there is no impact on recognition, measurement or disclosure in the period reported as a result of the change in framework.

The Group and Parent Company accounts have been prepared in accordance with UK-adopted International Accounting Standards and

with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards.

(b) Basis of preparation

The accounts are presented in pounds sterling, rounded to the nearest £0.1 million, and are prepared on the historical cost basis except the defined

benefit pension asset/liability, which is recognised as the fair value of the plan assets less the present value of the defined benefit obligation.

The Group’s business activities, together with the factors likely to affect its future development, performance and position are set out in the Directors’

report and strategic report on pages 1 to 107. The financial position of the Group, its cash flows and liquidity position are described in the Financial

Review on page 55 to 58. In addition, Note 2 to the accounts includes: the Group’s objectives, policies and processes for managing its capital; its

financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk.

The accounting policies set out below have been applied consistently throughout the Group and to all years presented in these consolidated

accounts except if mentioned otherwise. From 3 January 2021 the following amendments were adopted by the Group:

– Amendments to IFRS 9, IAS 39, IFRS 7 and IFRS 16: Interest Rate Benchmark Reform – Phase 2.

Their adoption did not have a material effect on the accounts.

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125

Significant accounting policies continued

(b) Basis of preparation continued

Restatement of comparatives

Due to a drafting error in the preparation of the accounts for the 53 weeks ended 2 January 2021 the figures in the cash flow statement for the

proceeds from and the repayment of loans and borrowings were incorrectly stated as £100.0 million. These figures should have been stated

as £150.0 million. The comparative financial information within financing activities for the 53 weeks ended 2 January 2021 has been restated.

The restatement does not impact upon the overall cash outflow from financing activities or on the net decrease in cash and cash equivalents

for the 53 weeks ended 2 January 2021 as previously presented.

Going concern

The Directors have considered the adoption of the going concern basis of preparation for these accounts in the context of recent trading

performance, the impact of the latest variant of Covid-19 and the trading outlook of the Group. At the end of the reporting period the Group had

available liquidity totalling £268.6 million, comprised of cash and cash equivalents of £198.6 million plus an undrawn revolving credit facility (RCF)

(which is committed to December 2024) of £70.0 million. The RCF includes financial covenants the Group must comply with related to maximum

leverage and a minimum fixed charge cover. How these covenants are measured and the required ratios are set out in Note 2.

The RCF was originally put in place in December 2020 to provide liquidity, specifically in the event of further lockdowns due to the Covid-19 pandemic.

Performance has recovered through 2021 and the Group has not needed to utilise the RCF at any point.

The Directors have reviewed cash flow forecasts prepared for the period up to December 2023 as well as covenant compliance for that period. In

reviewing the cash flow forecasts the Directors considered the current trading performance of the Group and the likely capital expenditure and

working capital requirements of its growth plans. The main uncertainty for the review period is the possibility of further lockdowns that would limit

or prevent the business from trading. Should such scenarios arise the Directors consider that the RCF provides significant additional liquidity based

on their experience through the pandemic. The Directors consider the likelihood of a complete closure scenario to be remote given the widespread

vaccination programme and the demonstrated ability of the sector to operate successfully in a Covid-secure environment.

After reviewing these cash flow forecasts and considering the continued uncertainties and mitigating actions that can be taken, the Directors believe

that it is appropriate to prepare the accounts on a going concern basis. After making enquiries, the Directors are confident that the Company and the

Group will have sufficient funds to continue to meet their liabilities as they fall due for at least 12 months from the date of approval of the accounts.

Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts.

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Significant accounting policies continued

(b) Basis of preparation continued

Key estimates and judgements

The preparation of financial information in conformity with adopted IFRSs requires management to make judgements, estimates and assumptions

that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and underlying

assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised

if the revision affects only that year, or in the year of revision and future years if the revision affects both current and future years.

Impairment

Property, plant and equipment and right-of-use assets are reviewed for impairment if events or changes in circumstances indicate that the carrying

value may not be recoverable. For example, shop fittings and right-of-use assets may be impaired if sales in that shop fall. When a review for

impairment is conducted the recoverable amount is estimated based on either value-in-use calculations or fair value less costs of disposal.

Value-in-use calculations are based on management’s estimates of future cash flows generated by the assets and an appropriate discount rate.

Consideration is also given to whether the impairment assessments made in prior years remain appropriate based on the latest expectations in

respect of recoverable amount. Where it is concluded that the impairment has reduced, a reversal of the impairment is recorded.

The Covid-19 crisis meant that during 2020 all shops had periods of no, or reduced, sales and was deemed to be an impairment trigger and as a result

assets in company-managed shops were tested for impairment. Sales have recovered during 2021 but in some locations the level of sales is still below

the 2019 level. As recovery from the pandemic continues, there remains inherent uncertainty in the rate of sales growth along with cost pressures

from increasing inflation.

As a result, an impairment review was carried out for the company-managed shop estate using the following assumptions:

– Shops have been categorised into different catchment areas (e.g., city centres, transport hubs) and assumptions made on the rate of like-for-like

sales recovery for each catchment;

– Like-for-like sales have been assumed to grow from December 2021 levels to a level equivalent to the pre-Covid-19 levels (on average across the

estate) by the end of 2022 (excluding the incremental impact of delivery). Like-for-like sales for the period 2023 to 2026 are then assumed to grow

by an average of 3% per annum;

– Where shops are currently used to fulfil orders for delivery, or are planned to offer delivery in 2022, the net cash flows for fulfilling these orders

are included within the estimated cash flows for the shop;

– Earnings before interest, tax, depreciation, amortisation and rent (EBITDAR) is used as a proxy for net cash flow excluding rental payments;

– The discount rate is based on the Group’s weighted average cost of capital (WACC) with an uplift for risk in the current environment and at

1 January 2022 was 6.9% (2 January 2021: 6.7%); and

– Consideration of the appropriate period over which to forecast cash flows, including reference to the lease term. Where considered appropriate

cashflows have been included for periods beyond the lease probable end date (to a maximum of five years in accordance with IAS 36).

NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED

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127

Significant accounting policies continued

(b) Basis of preparation continued

Key estimates and judgements continued

On the basis of these calculations and given the improved outlook, a net impairment release of £2.2 million has been recognised during the current

year (of which £0.6 million relates to fixtures and fittings and £1.6 million relates to right-of-use assets) resulting in an impairment provision of

£4.9 million being retained at 1 January 2022 in respect of 59 shops (of which £1.6 million relates to fixtures and fittings and £3.3 million relates to

right-of-use assets).

Given the uncertainties of the current trading environment, the sensitivities of these assumptions on the impairment calculation have been tested:

– A 1% increase in the discount rate would result in an increased impairment of £0.3 million, with the same number of shops impaired.

A 1% decrease in the discount rate would result in a reduced impairment of £0.4 million, with one fewer shop impaired.

– A 5% increase in the sales recovery assumption (per annum) would result in a reduced impairment of £1.6 million with 15 fewer shops impaired.

A 5% decrease in the sales recovery assumption would result in an increased provision of £2.1 million with an additional 11 shops impaired.

In addition to the impairment movements resulting from the review of company-managed shops noted above a further £1.3 million has been released

to the income statement in 2021 in respect of land and bakery plant and machinery which is no longer considered to be impaired.

Determining the rate used to discount lease payments

At the commencement date of property leases the lease liability is calculated by discounting the lease payments. The discount rate used should be

the interest rate implicit in the lease. However, if that rate cannot be readily determined, which is generally the case for property leases, the lessee’s

incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of

similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. As the Group had no suitable

external borrowings from which to determine that rate, judgement is required to determine the incremental borrowing rate to be used. At the start of

each month a risk-free rate is obtained, linked to the length of the lease and an adjustment is then made to reflect credit risk. During the year discount

rates in the range 1.5% to 2.5% were used. For the lease liabilities at 1 January 2022 a 0.1% change in the discount rate used for each lease would have

adjusted the total liabilities by £1.2 million.

Determining the lease term of property leases

At the commencement date of property leases the Group normally determines the lease term to be the full term of the lease, assuming that any option

to break or extend the lease is unlikely to be exercised and it is not reasonably certain that the Group will continue in occupation for any period beyond

the lease term. Leases are regularly reviewed and will be revalued if it becomes reasonably certain that a break clause or option to extend the lease

will be exercised.

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Significant accounting policies continued

(b) Basis of preparation continued

Key estimates and judgements continued

The leases typically run for a period of ten or 15 years. In England and Wales, the majority of the Group’s property leases are protected by

the Landlord and Tenant Act 1954 (‘LTA’) which affords protection to the lessee at the end of an existing lease term.

Judgement is required in respect of those property leases where the current lease term had expired but the Group had not yet renewed the lease.

Where the Group believes renewal to be reasonably certain and the lease is protected by the LTA it will be treated as having been renewed at the date

of termination of the previous lease term and on the same terms as the previous lease. Where renewal is not considered to be reasonably certain the

leases are included with a lease term which reflects the anticipated notice period under relevant legislation. The lease will be revalued when it is

renewed to take account of the new terms. As at 1 January 2022 the financial effect of applying this judgement was an increase in recognised lease

liabilities of £41.7 million (2020: £31.9 million).

In addition, where a shop is refurbished within two years of the contractual lease end date and the Group therefore expects to renew the lease,

the lease liability is revised to reflect an additional lease term. The impact of this judgement as at 1 January 2022 is an additional lease liability

of £7.7 million.

Post-retirement benefits

The determination of the defined benefit obligation of the Group’s defined benefit pension scheme depends on the selection of certain assumptions with

significant estimation uncertainty including the discount rate, inflation rate, mortality rates and commutation. Differences arising from actual experience

or future changes in assumptions will be reflected in future years. The key assumptions, sensitivities and carrying amounts for 2021 are given in Note 21.

The consolidated accounts include the results of Greggs plc and its subsidiary undertakings for the 52 weeks ended 1 January 2022. The comparative

period is the 53 weeks ended 2 January 2021.

(i) Subsidiaries

Subsidiaries are entities controlled by the Company. The Company controls an entity when it is exposed to, or has rights to, variable returns from its

involvement with the entity and has the ability to affect those returns through its power over the entity. The accounts of subsidiaries are included in

the consolidated accounts from the date on which control commences until the date on which control ceases.

(ii) Associates

Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Significant influence

is presumed to exist when the Group holds 20-50% of the voting power of another entity unless it can be clearly demonstrated that this is not the case.

At the year end the Group has one associate which has not been consolidated on the grounds of materiality (see Note 13).

(iii) Transactions eliminated on consolidation

Intragroup balances, and any unrealised gains and losses or income and expenses arising from intragroup transactions, are eliminated in preparing

the consolidated accounts.

NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED

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Significant accounting policies continued

(d) Exceptional items

Exceptional items are defined as items of income and expenditure which are material and unusual in nature and which are considered to be of

such significance that they require separate disclosure on the face of the income statement. Any future movements on items previously classified

as exceptional will also be classified as exceptional.

(e) Foreign currency

Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities

denominated in foreign currencies at the balance sheet date are translated at the foreign exchange rate ruling at that date. Non-monetary assets

and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

Foreign exchange differences arising on translation are recognised in the income statement.

(f) Intangible assets

The Group’s only intangible assets relate to software and the costs of its implementation which are measured at cost less accumulated amortisation

and accumulated impairment losses. Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the

specific asset to which it relates. All other expenditure is recognised in the income statement as incurred.

Amortisation is recognised in the income statement on a straight-line basis over the estimated useful lives of intangible assets from the date that

they are available for use. The estimated useful lives are five to seven years.

Assets in the course of development are recategorised and amortisation commences when the assets are available for use.

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Significant accounting policies continued

(g) Leases

(i) Lease recognition

At inception of a contract the Group assesses whether a contract is or contains a lease. A contract is, or contains, a lease if the contract conveys a

right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to

control the use of an identified asset, the Group uses the definition of a lease in IFRS 16.

For leases of properties in which the Group is a lessee, it has applied the practical expedient permitted by IFRS 16 and will account for each lease

component and any associated non-lease components as a single lease component.

(ii) Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease. Right-of-use assets are measured at cost, less accumulated

depreciation and impairment losses and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of

lease liabilities recognised, adjusted for any lease payments made at or before the commencement date, less any lease incentives received. Right-of-

use assets are depreciated over the shorter of the asset’s useful life or the lease term on a straight-line basis. Right-of-use assets are subject to,

and reviewed regularly for, impairment. Depreciation on right-of-use assets is included in selling and distribution costs in the income statement.

(iii) Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of the lease payments to be made over

the lease term. Lease payments include fixed payments less any lease incentives receivable and variable lease payments that depend on an index or

rate. Any variable lease payments that do not depend on an index or rate are recognised as an expense in the period in which the event or condition

that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date if the interest

rate implicit in the lease is not readily determinable. Generally the Group uses its incremental borrowing rate as the discount rate. When there are no

external borrowings, judgement would be required to determine an approximation, calculated based on UK Government gilt rates of an appropriate

duration and adjusted by an indicative credit premium.

After the commencement date, the lease liability is increased to reflect the accretion of interest and reduced for lease payments made. In addition,

the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term or a change in the fixed lease payments.

The remeasured lease liability (and corresponding right-of-use asset) is calculated using a revised discount rate, based upon a revised incremental

borrowing rate at the time of the change. Interest charges are included in finance costs in the income statement.

(iv) Short-term leases and leases of low-value assets

The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery and equipment that have a lease

term of less than 12 months and leases of low-value assets. Lease payments relating to short-term leases and leases of low-value assets are

recognised as an expense on a straight-line basis over the lease term.

NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED

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Significant accounting policies continued

(g) Leases continued

(v) Variable lease payments

Some property leases contain variable payment terms that are linked to sales generated from a shop. For individual shops, up to 100% of lease

payments are on the basis of variable payment terms. These payments are recognised in the income statement in the period in which the condition

that triggers them occurs. Under existing lease arrangements, where variable payment terms exist, the expected future cash outflow on an annual

basis is expected to be immaterial.

(h) Property, plant and equipment

(i) Owned assets

Items of property, plant and equipment are stated at cost or deemed cost less accumulated depreciation (see below) and impairment losses (see

accounting policy (l)). The cost of self-constructed assets includes the cost of materials and direct labour.

(ii) Subsequent costs

The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that

the future economic benefits embodied within the component will flow to the Group, and its cost can be measured reliably. The carrying value of

the replaced component is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in the income

statement as incurred.

(iii) Depreciation

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 20 to 40 years

Short leasehold properties 10 years or length of lease if shorter

Plant and machinery, fixtures and fittings 3 to 10 years

Freehold land is not depreciated.

Depreciation methods, useful lives and residual values (if not insignificant) are reassessed annually.

(iv) Assets in the course of construction

These assets are recategorised and depreciation commences when the assets are available for use.

(i) Investments

Non-current investments comprise investments in subsidiaries and associates which are carried at cost less impairment.

Current investments comprise fixed-term, fixed-rate bank deposits where the term is greater than three months.

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Significant accounting policies continued

(j) Inventories

Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of

business, less the estimated costs of completion and selling expenses. The cost of inventories includes expenditure incurred in acquiring the

inventories and direct production labour costs.

(k) Cash and cash equivalents

Cash and cash equivalents comprises cash at bank, in hand, debit and credit card receivables and call deposits with an original maturity of three

months or less. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a

component of cash and cash equivalents for the purpose of the statement of cash flows.

(l) Impairment

The carrying amounts of the Group and Company’s assets, other than inventories and deferred tax assets, are reviewed at each balance sheet date

to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. Impairment

reviews are carried out on an individual shop basis.

An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognised in

the income statement. Impairment losses recognised in prior years are assessed at each reporting date and reversed if there has been a change in

the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does

not exceed the carrying amount that would have been determined, net of depreciation, if no impairment loss had been recognised.

(m) Assets held for sale

Assets that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale. Immediately before

classification as held for sale, the assets are remeasured in accordance with the Group and Company’s accounting policies. Thereafter generally the

assets are measured at the lower of their carrying amount and fair value less cost to sell. Once classified as held for sale assets are no longer

depreciated or amortised.

(n) Share capital and reserves

(i) Repurchase of share capital

When share capital recognised as equity is repurchased for cancellation, the amount of the consideration paid, including directly attributable costs,

is recognised as a deduction from equity in the capital redemption reserve. Repurchased shares that are held in the employee share ownership plan

are classified as treasury shares and are presented as a deduction from total equity.

(ii) Dividends

Dividends are recognised as a liability when the Company has an obligation to pay and the dividend is no longer at the Company’s discretion.

(iii) Distributable reserves

All Parent Company retained earnings are distributable and are the only such reserves.

NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED

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Significant accounting policies continued

(o) Employee share ownership plan

The Group and Parent Company accounts include the assets and related liabilities of the Greggs Employee Benefit Trust (‘EBT’). In both the Group

and Parent Company accounts the treasury shares held by the EBT are stated at cost and deducted from total equity.

(p) Employee benefits

(i) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the

Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation

can be measured reliably.

(ii) Defined contribution pension plans

Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement when they are due.

(iii) Defined benefit pension plans

The Company’s net obligation in respect of defined benefit pension plans is calculated by estimating the amount of future benefit that employees

have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of

any plan assets (at bid price) is deducted. The Company determines the net interest on the net defined benefit asset/liability for the period by applying

the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net defined benefit asset/liability.

The discount rate is the yield at the reporting date on bonds that have a credit rating of at least AA, that have maturity dates approximating to the

terms of the Company’s obligations and that are denominated in the currency in which the benefits are expected to be paid.

Remeasurements arising from defined benefit pension plans comprise actuarial gains and losses and the return on plan assets (excluding interest).

The Company recognises them immediately in other comprehensive income and all other expenses related to defined benefit pension plans in

employee benefit expenses in the income statement.

When the benefits of a plan are changed, or when a plan is curtailed, the portion of the changed benefit related to past service by employees,

or the gain or loss on curtailment, is recognised immediately in the income statement when the plan amendment or curtailment occurs.

The calculation of the defined benefit obligation is performed by a qualified actuary using the projected unit credit method. When the calculation

results in a benefit to the Company, the recognised asset is limited to the present value of benefits available in the form of any future refunds from

the plan (net of tax) or reductions in future contributions and takes into account the adverse effect of any minimum funding requirements in

accordance with IFRIC 14.

(iv) Share-based payment transactions

The share option programme allows Group employees to acquire shares in the Company. The fair value of share options granted is recognised as

an employee expense with a corresponding increase in equity. The fair value is measured at grant date, using an appropriate model, taking into

account the terms and conditions upon which the share options were granted, and is spread over the period during which the employees become

unconditionally entitled to the options. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest

except where forfeiture is only due to share prices not achieving the threshold for vesting.

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Significant accounting policies continued

(p) Employee benefits continued

(v) Termination benefits

Termination benefits are expensed at the earlier of the date at which the Group can no longer withdraw the offer of these benefits and the date at which

the Group recognises costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the reporting date they are discounted.

(q) Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is

probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future

cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

(i) Restructuring

A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan, and the restructuring either

has commenced or has been announced publicly. Future operating costs are not provided for.

(ii) Onerous contracts

Provisions for onerous contracts are recognised when the Group believes that the unavoidable costs of meeting the contract obligations exceed

the economic benefits expected to be received under the contract. At this point and before a provision is established the Group recognises any

impairment loss on the associated assets.

(iii) Dilapidations

The Group provides for property dilapidations, where appropriate, based on the future expected repair costs required to restore the Group’s

leased buildings to their fair condition at the end of their respective lease terms, where it is considered a reliable estimate can be made.

(r) Revenue

(i) Retail sales

Revenue from the sale of goods is recognised as income on receipt of cash or card payment. Revenue is measured net of discounts,

promotions and value added taxation. Revenue from delivery services is included in retail sales and recognised on delivery.

(ii) Franchise sales

Franchise sales are recognised when goods are delivered to franchisees. Additional franchise royalty fee income, generally calculated as a

percentage of gross sales income, is recognised in line with the franchisees’ product sales in accordance with the relevant agreement. Pre-opening

capital fit-out costs are recharged to the franchisee and represent a key performance obligation of the overall franchise sales agreement. These

recharges are recognised as income on completion of the related fit-out. Sales are invoiced to franchisees on credit terms of less than three months.

(iii) Wholesale sales

Wholesale sales are recognised when goods are delivered to customers.

NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED

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Significant accounting policies continued

(r) Revenues continued

(iv) Loyalty programme/gift cards

Amounts received for gift cards or as part of the loyalty programme are deferred. They are recognised as revenue when the Group has fulfilled

its obligation to supply products under the terms of the programme or when it is no longer probable that these amounts will be redeemed.

Where customers are entitled to a free product after a set number of purchases under the loyalty programme, a proportion of the consideration

received is deferred so that the revenue is recognised evenly across all of the linked transactions.

The nature, timing and uncertainty of revenues arising from the above transaction types do not differ significantly from each other.

(s) Government grants

Government grants are recognised in the balance sheet initially as deferred income when there is a reasonable assurance that they will be received

and that the Group will comply with the conditions attaching to them. Grants that compensate the Group for expenses incurred are recognised

net of the related expenses in the income statement on a systematic basis in the same periods in which the expenses are incurred. Grants that

compensate the Group for the cost of an asset are recognised in the income statement over the useful life of the asset.

(t) Finance income and expense

Interest income or expense is recognised using the effective interest method.

(u) Income tax

Income tax comprises current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to items

recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable profit for the year, using tax rates enacted or substantively enacted at the balance sheet date,

and any adjustment to tax payable in respect of previous years. The amount of current tax payable is the best estimate of the tax amount expected

to be paid that reflects uncertainty related to income taxes, if any. Taxable profit differs from profit as reported in the income statement because

some items of income or expense are taxable or deductible in different years or may never be taxable or deductible.

Deferred tax is the tax expected to be payable or recoverable in the future arising from temporary differences between the carrying amounts of

assets and liabilities for financial reporting purposes and the amounts used in the calculation of taxable profit. It is accounted for using the balance

sheet liability method. The amount of deferred tax recognised is based on the expected manner of realisation or settlement of the carrying amounts

of assets and liabilities, using tax rates that are expected to apply when the temporary differences reverse, based on rates enacted or substantively

enacted at the balance sheet date. When the recovery of the carrying amount of an asset gives rise to multiple tax consequences which are not

subject to the same income tax laws, separate temporary differences are identified, and the deferred tax on these is accounted for separately,

including assessment of the recoverability of any deferred tax assets that arise.

Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a

business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent

that it is probable that they will not reverse in the foreseeable future.

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Significant accounting policies continued

(u) Income tax continued

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be

utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related deferred

tax benefit will be realised.

(v) Trade and other receivables

Trade receivables are recognised initially at the amount of consideration that is unconditional. They are subsequently measured at amortised

cost using the effective interest method, less loss allowance.

(w) Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid.

The amounts are unsecured and are usually paid within 45 days of recognition.

(x) Research and development

The Company continuously strives to improve its products and processes through technical and other innovation. Such expenditure is typically

expensed to the income statement when the related intellectual property is not capable of being formalised or capitalised within intangible assets.

(y) IFRSs available for early adoption not yet applied

The following amendments to standards which will be relevant to the Group were available for early adoption but have not been applied

in these accounts:

– Amendments to IAS 16: Property, Plant and Equipment – Proceeds before Intended Use (effective 1 January 2022);

– Amendments to IAS 37: Provisions, Contingent Liabilities and Contingent Assets: Onerous Contracts – Cost of Fulfilling a Contract (effective

1 January 2022); and

– Annual Improvements 2018-2020 (effective 1 January 2022).

Their adoption is not expected to have a material effect on the accounts.

NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED

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1. Segmental analysis

The Board is considered to be the ‘chief operating decision maker’ of the Group in the context of the IFRS 8 definition. In addition to its company-

managed retail activities, the Group generates revenues from its business to business channel which includes franchise and wholesale activities.

Both channels were categorised as reportable segments for the purposes of IFRS 8.

Company-managed retail activities – the Group sells a consistent range of fresh bakery goods, sandwiches and drinks in its own shops or via delivery.

Sales are made to the general public on a cash basis. All results arise in the UK.

Business to business channel – the Group sells products to franchise and wholesale partners for sale in their own outlets as well as charging a licence

fee to franchise partners. These sales and fees are invoiced to the partners on a credit basis. All results arise in the UK.

All revenue in 2021 and 2020 was recognised at a point in time.

In 2021 the Board has regularly reviewed the revenues and trading profit of each segment. During 2020 the Board regularly reviewed the revenues of

each segment. However, a review of the trading profit for each segment was not possible during 2020 as there was no basis on which meaningfully to

allocate costs during the period when company-managed shops were closed. The Board receives information on overheads, assets and liabilities on

an aggregated basis consistent with the Group accounts.

2021

Retail

company-

managed shops

£m

2021

Business to

business

£m

2021

Total

£m

2020

Retail

company-

managed shops

£m

2020

Business to

business

£m

2020

Total

£m

Revenue 1,098.2 131.5 1,229.7 715.3 96.0 811.3

Trading profit* 207.1 28.5 235.6 – – 66.4

Overheads including profit share (82.4) (73.4)

Operating profit/(loss) 153.2 (7.0)

Finance expense (7.6) (6.7)

Profit/(loss) before tax 145.6 (13.7)

* trading profit is defined as gross profit less supply chain costs and retail costs (including property costs) and before central overheads

2. Financial risk management

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

Retail sales represent a large proportion of the Group’s sales and present no credit risk as they are made for cash or card payments. The Group does

offer credit terms on sales to its wholesale and franchise customers. In such cases the Group operates effective credit control procedures in order

to minimise exposure to overdue debts.

Counterparty risk is also considered low. All of the Group’s surplus cash is held with highly-rated banks, in line with Group policy. Other receivables

generally relate to VAT and other sundry balances due from third parties. Credit risk is considered low as amounts are generally recoverable within

30-day terms.

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2. Financial risk management continued

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.

The Group usually operates with net current liabilities and is therefore reliant on the continued strong performance of the retail portfolio to meet its short-term liabilities.

Short and medium-term cash forecasting is used to manage liquidity risk. These forecasts are used to ensure the Group has sufficient liquidity to meet its liabilities when

due, under both normal and stressed conditions.

During 2020 the Group arranged a £100 million syndicated revolving credit facility with maturity in December 2023. During 2021 the Group exercised an option to extend

the maturity by one year to December 2024. There is a further option available for another one-year extension. This facility was undrawn at 1 January 2022 (2020: undrawn).

The covenants comprise: leverage (calculated as the ratio of net borrowings to EBITDA) does not exceed 3:1; and fixed charge cover (calculated as the ratio of EBITDA to

net rent and interest payable) cannot be below 1.75:1.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or the value of its

holdings of financial instruments.

Other than for pension scheme assets market risk is not significant and therefore sensitivity analysis would not be meaningful. Sensitivity analysis for pension scheme

assets is given in Note 21.

Currency risk

The Group has no regular material transactions in foreign currency although there are occasional purchases, mainly of capital items, denominated in foreign currency.

Whilst certain costs such as electricity and wheat can be influenced by movements in the US dollar, actual contracts are priced in sterling. In respect of those key costs

which are volatile, such as electricity and flour, the price may be fixed for a period of time in line with Group policy. All such contracts are for the Group’s own expected usage.

Interest rate risk

Interest rate risk is the risk that the interbank offered rates increase causing finance costs to increase. The Group’s interest rate risk arises from its revolving credit facility.

Whilst the facility remains undrawn increases in the interest rate will not impact on finance costs.

Equity price risk

The Group has no significant equity investments other than its subsidiaries and associate. As disclosed in Note 21 the Group’s defined benefit pension scheme

has investments in equity-related funds.

Capital management

The Group’s capital management objectives are:

– To ensure the Group’s ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for other stakeholders; and

– To provide an adequate return to shareholders by pricing products and delivering services commensurate with the level of risk.

NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED

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2. Financial risk management continued

Capital management continued

To meet these objectives the Group reviews the budgets and forecasts on a regular basis to ensure there is sufficient capital to meet the needs

of the Group through to profitability and positive cashflow.

The capital structure of the Group consists of shareholders’ equity as set out in the consolidated statement of changes in equity.

All working capital requirements are financed from existing cash resources and borrowings.

The Board reserves the option to purchase its own shares in the market dependent on market prices and surplus cash levels.

The trustees of the Greggs Employee Benefit Trust also purchase shares for future satisfaction of employee share options.

Financial instruments

Group and Parent Company

All of the Group’s surplus cash or cash equivalents is invested as cash placed on deposit or fixed-term deposits.

The Group’s treasury policy has as its principal objective the achievement of the maximum rate of return on cash balances whilst maintaining

an acceptable level of risk. Other than mentioned below there are no financial instruments, derivatives or commodity contracts used.

Financial assets and liabilities

A financial asset is measured at amortised cost if it meets both of the following conditions:

– It is held within a business model whose objective is to hold assets to collect contractual cash flows; and

– Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount

outstanding.

The Group’s main financial assets comprise cash and cash equivalents and fixed-term deposits. Other financial assets include trade and

other receivables arising from the Group’s activities. These financial assets all meet the conditions to be recognised at amortised cost.

Other than trade and other payables and lease liabilities, the Group had no financial liabilities as at 1 January 2022 (2020: £nil).

Fair values

The fair value of the Group’s financial assets and liabilities is not materially different from their carrying values. Financial assets and liabilities

comprise principally of trade and other receivables and trade and other payables and the only interest-bearing balances are the bank deposits

and borrowings which attract interest at variable rates.

Interest rate, credit and foreign currency risk

The Group has not entered into any hedging transactions during the current and prior year and considers interest rate, credit and

foreign currency risks not to be significant.

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3. Profit/(loss) before tax

Profit/(loss) before tax is stated after charging/(crediting):

2021

£m

2020

£m

Amortisation of intangible assets 4.5 4.0

Depreciation of owned property, plant and equipment 54.2 56.9

Depreciation of right-of-use assets 48.7 51.9

Net impairment of owned property, plant and equipment (1.9) 5.2

Net impairment of right-of-use assets (1.6) 8.8

Loss on disposal of property, plant and equipment 0.9 0.5

Release of Government grants (0.5) (0.5)

Auditor’s remuneration for the audit of these accounts amounted to £250,000 (2020: £193,000) and for other assurance services £nil (2020: £15,000).

Amounts paid to the Company’s auditor in respect of services to the Company, other than the audit of the Company’s accounts, have not been

disclosed as the information is required instead to be presented on a consolidated basis.

During 2020 the Group received £87 million under the Coronavirus Job Retention Scheme (‘CJRS’) to support employment. This was credited to

the income statement to offset the related employment costs. During 2021 the Group received £4.9 million under this scheme. In early July 2021

this amount was repaid in light of improved performance and trading outlook of our shops and a corresponding charge recognised in the

income statement.

During 2021 an income statement saving of £14.9 million (2020: £18.8 million) was made following the suspension of business rates until April 2021.

4. Exceptional items

2021

£m

2020

£m

Cost of sales

Supply chain restructuring

– redundancy – 0.1

– transfer of operations – 0.7

Total exceptional items – 0.8

Supply chain restructuring

This charge arose from the decisions, announced in 2016 and 2017, to invest in and reshape the Company’s supply chain in order to support future

growth. In 2020 the costs related to accelerated depreciation and the expenses incurred as a result of further consolidation of manufacturing

into dedicated centres of excellence, including additional running costs. This programme of investment was completed in 2021.

NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED

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5. Personnel expenses

The average number of persons employed by the Group and Parent Company (including Directors) during the year was as follows:

2021

Number

2020

Number

Management 601 681

Administration 353 361

Production 2,935 3,026

Shop 18,994 20,276

22,883 24,344

The aggregate costs of these persons were as follows:

Note

2021

£m

2020

£m

Wages and salaries 378.0 363.5

Compulsory social security contributions 25.0 26.2

Pension costs – defined benefit plan 21 – –

Pension costs – defined contribution plans 21 22.4 24.9

Equity-settled transactions (including employer’s NI costs) 21 3.8 0.2

429.2 414.8

In addition to wages and salaries, the total amount accrued under the Group’s employee profit sharing scheme is contained within

the main cost categories as follows:

2021

£m

2020

£m

Cost of sales 4.3 –

Distribution and selling costs 10.3 –

Administrative expense 2.0 –

Amount shared with employees 16.6 –

Compulsory social security contributions 2.1 –

18.7 –

For the purposes of IAS 24 ‘Related Party Disclosures’, key management personnel comprises the Directors and the members of the

Operating Board and their remuneration was as follows:

2021

£m

2020

£m

Salaries and fees 3.4 2.7

Taxable benefits 0.1 0.1

Annual bonus (including profit share) 2.4 –

Post-retirement benefits 0.3 0.3

Equity-settled transactions 0.9 0.2

7.1 3.3

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5. Personnel expenses (continued)

The following amounts are disclosed in accordance with Schedule 5 of the Large and Medium-Sized Companies and Groups (Accounts and Reports)

Regulations 2008.

2021

£m

2020

£m

Aggregate Directors’ remuneration 2.5 1.4

Aggregate amount of gains on exercise of share options 2.0 –

4.5 1.4

The 2020 figures have been updated to recognise bonus costs on an accruals basis rather than a cash basis.

The number of Directors in the defined contribution pension scheme and in the defined benefit pension scheme during the year was one (2020: one).

6. Finance expense (net)

Note

2021

£m

2020

£m

Interest income on cash balances – 0.4

Interest expense on borrowings and other related charges (1.1) (0.8)

Foreign exchange (loss)/gain (0.1) 0.2

Interest on lease liabilities (6.3) (6.5)

Net interest related to defined benefit pension obligation 21 (0.1) –

(7.6) (6.7)

7. Profit attributable to Greggs plc

Of the Group profit for the year, £117.6 million (2020: £12.9 million loss) is dealt with in the accounts of the Parent Company. The Company has

taken advantage of the exemption permitted by s408 of the Companies Act 2006 from presenting its own income statement.

8. Income tax expense

Recognised in the income statement

2021

£m

2020

£m

Current tax

Current year 19.1 (0.6)

Adjustment for prior years (0.2) (0.6)

18.9 (1.2)

Deferred tax

Origination and reversal of temporary differences 10.2 0.4

Adjustment for prior years (1.0) 0.1

9.2 0.5

Total income tax expense in income statement 28.1 (0.7)

NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED

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8. Income tax expense continued

Reconciliation of effective tax rate

The tables below explain the differences between the expected tax expense calculated at the UK statutory rate of 19% (2020: 19%) and the

actual tax expense for each year.

2021

£m 2020

2020

£m

Profit/(loss) before tax 145.6 (13.7)

Income tax using the domestic corporation tax rate 19.00% 27.7 19.00% (2.6)

Items not (taxable)/deductible for tax purposes (1.97%) (2.8) (2.35%) 0.3

Non-tax-deductible depreciation 0.72% 1.0 (9.39%) 1.3

Impairment of non-tax-deductible assets (0.15%) (0.2) (0.99%) 0.1

Impact of increase in deferred tax rate 2.51% 3.6 (4.92%) 0.7

Adjustment for prior years (0.79%) (1.2) 3.49% (0.5)

Total income tax expense in income statement 19.32% 28.1 5.23% (0.7)

Legislation to increase the rate of Corporation tax to 25% from 1 April 2023 was substantively enacted on 24 May 2021. The 25% rate has therefore

been applied to any timing differences that are expected to reverse on or after 1 April 2023 whilst a rate of 19% has been applied to those timing

differences expected to reverse before 1 April 2023.

Tax recognised in other comprehensive income or directly in equity

2021

Current tax

£m

2021

Deferred tax

£m

2021

Total

£m

2020

Total

£m

Debit/(credit)

Relating to equity-settled transactions – (3.2) (3.2) 1.5

Relating to defined benefit pension plans – remeasurement gains/(losses) – 1.7 1.7 (2.1)

– (1.5) (1.5) (0.6)

The deferred tax movements in both the current and prior years relating to equity-settled transactions are in respect of share-based payments and

arise as a result of fluctuations in share price in the year and the stage of maturity of existing schemes together with the revaluation impact of the

deferred tax previously recognised directly in equity.

The deferred tax movements in both the current and prior years relating to defined benefit pension plans are in respect of plan remeasurements

accounted for in other comprehensive income together with the revaluation impact of the deferred tax previously recognised directly in equity.

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9. Earnings per share

Basic earnings/(loss) per share

Basic earnings per share for the 52 weeks ended 1 January 2022 is calculated by dividing profit attributable to ordinary shareholders by the weighted

average number of ordinary shares in issue during the 52 weeks ended 1 January 2022 as calculated below.

Diluted earnings/(loss) per share

Diluted earnings per share for the 52 weeks ended 1 January 2022 is calculated by dividing profit attributable to ordinary shareholders by the weighted

average number of ordinary shares, adjusted for the effects of all dilutive potential ordinary shares (which comprise share options granted to

employees) in issue during the 52 weeks ended 1 January 2022 as calculated below.

Potential ordinary shares can only be treated as dilutive when their conversion to ordinary shares would decrease earnings per share or increase loss

per share. As the Group recognised a loss for the 53 weeks ended 2 January 2021, none of the potential ordinary shares were considered to be dilutive

for that period.

Profit/(loss) attributable to ordinary shareholders

2021

£m

2020

£m

Profit/(loss) for the financial year attributable to equity holders of the Parent 117.5 (13.0)

Basic earnings/(loss) per share 115.7p (12.9p)

Diluted earnings/(loss) per share 114.3p (12.9p)

Weighted average number of ordinary shares

2021

Number

2020

Number

Issued ordinary shares at start of year 101,426,038 101,155,901

Effect of own shares held (221,851) (302,104)

Effect of shares issued 284,386 113,334

Weighted average number of ordinary shares during the year 101,488,573 100,967,131

Effect of share options in issue 1,261,311 –

Weighted average number of ordinary shares (diluted) during the year 102,749,884 100,967,131

NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED

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10. Intangible assets

Group and Parent Company

Software

£m

Assets under

development

£m

Total

£m

Cost

Balance at 29 December 2019 28.9 1.5 30.4

Additions 2.7 0.1 2.8

Transfers 1.5 (1.5) –

Balance at 2 January 2021 33.1 0.1 33.2

Balance at 3 January 2021 33.1 0.1 33.2

Additions 3.1 0.7 3.8

Transfers 0.1 (0.1) –

Balance at 1 January 2022 36.3 0.7 37.0

Amortisation

Balance at 29 December 2019 13.6 – 13.6

Amortisation charge for the year 4.0 – 4.0

Balance at 2 January 2021 17.6 – 17.6

Balance at 3 January 2021 17.6 – 17.6

Amortisation charge for the year 4.5 – 4.5

Balance at 1 January 2022 22.1 – 22.1

Carrying amounts

At 29 December 2019 15.3 1.5 16.8

At 2 January 2021 15.5 0.1 15.6

At 3 January 2021 15.5 0.1 15.6

At 1 January 2022 14.2 0.7 14.9

All amortisation is charged to administrative expenses in the income statement

Assets under development relate to software projects arising from the investment in new systems platforms

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11. Leases

Amounts recognised in the balance sheets

The balance sheets show the following amounts relating to leases:

Group and Parent Company

2021

£m

2020

£m

Right-of-use assets

Land and buildings 260.4 267.8

Plant and equipment 3.2 2.3

263.6 270.1

2021

£m

2020

£m

Lease liabilities

Current 49.3 48.6

Non-current 233.9 243.1

283.2 291.7

The remaining maturities of the lease liabilities, which are gross and undiscounted, are as follows:

2021

£m

2020

£m

Less than one year 53.0 54.4

One to two years 47.1 49.3

Two to three years 43.1 43.6

Three to four years 38.3 39.2

Four to five years 31.0 34.1

More than five years 92.6 94.9

Total undiscounted lease liability 305.1 315.5

Additions to right-of-use assets during the 52 weeks ended 1 January 2022 as a result of entering into new leases (either as a result of acquiring

new shops or completing a lease renewal for an existing shop) were £49.6 million (2020: 26.2 million).

A further net decrease of £9.1 million to right-of-use assets has also been recognised during the 52 weeks ended 1 January 2022 as a result

of lease modifications and assumptions relating to lease term once a lease has become expired (2020: increase of £31.9 million).

NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED

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11. Leases continued

Amounts recognised in the income statement

2021

£m

2020

£m

Depreciation charge on right-of-use assets

Land and buildings 47.7 50.2

Plant and equipment 1.0 1.7

48.7 51.9

Impairment (reversal)/charge (1.6) 8.8

Interest expense (included in finance cost) 6.3 6.5

Expense included for short-term leases (included in cost of sales and administrative expenses) 0.1 0.2

Expense related to leases of low-value assets that are not shown above as short-term leases (included in administrative expenses) 0.1 0.2

Expense related to variable lease payments not included in lease liabilities (included in distribution and selling costs) 2.1 0.6

The impairment (reversal)/charge is (credited)/charged to distribution and selling costs in the income statement and arises due to changes

in the trading performance of the shops.

The total cash outflow for leases in 2021 was £55.3 million (2020: £48.6 million).

The components of the movement in the total lease liability were as follows:

2021

£m

Opening total liability 291.7

Additions in respect of new leases 49.6

Lease modifications (9.1)

Interest on lease liabilities 6.3

Rental payments (55.3)

Closing total liability 283.2

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12. Property, plant and equipment

Group

Land and

buildings

£m

Plant and

equipment

£m

Fixtures and

fittings

£m

Assets under

construction

£m

Total

£m

Cost

Balance at 29 December 2019 166.3 168.6 337.8 5.9 678.6

Additions 3.3 10.1 19.6 22.9 55.9

Disposals (0.7) (8.1) (8.7) – (17.5)

Transfers – 1.9 – (1.9) –

Balance at 2 January 2021 168.9 172.5 348.7 26.9 717.0

Balance at 3 January 2021 168.9 172.5 348.7 26.9 717.0

Additions 4.5 14.9 31.4 2.8 53.6

Disposals (0.5) (11.5) (16.3) – (28.3)

Transfers 19.6 7.3 – (26.9) –

Reclassified as held for sale (1.8) – – – (1.8)

Balance at 1 January 2022 190.7 183.2 363.8 2.8 740.5

Depreciation

Balance at 29 December 2019 48.2 89.3 187.4 – 324.9

Depreciation charge for the year 4.9 14.3 37.6 – 56.8

Impairment charge for the year – – 5.9 – 5.9

Impairment release for the year – – (0.7) – (0.7)

Disposals (0.3) (7.4) (7.5) – (15.2)

Balance at 2 January 2021 52.8 96.2 222.7 – 371.7

Balance at 3 January 2021 52.8 96.2 222.7 – 371.7

Depreciation charge for the year 5.5 15.4 33.3 – 54.2

Impairment charge for the year – 0.1 0.7 – 0.8

Impairment release for the year (1.0) (0.4) (1.3) – (2.7)

Disposals (0.1) (11.4) (15.6) – (27.1)

Reclassified as held for sale (0.2) – – – (0.2)

Balance at 1 January 2022 57.0 99.9 239.8 – 396.7

Carrying amounts

At 29 December 2019 118.1 79.3 150.4 5.9 353.7

At 2 January 2021 116.1 76.3 126.0 26.9 345.3

At 3 January 2021 116.1 76.3 126.0 26.9 345.3

At 1 January 2022 133.7 83.3 124.0 2.8 343.8

Assets under construction relate to the building of an automated pizza line at our Enfield bakery.

NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED

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12. Property, plant and equipment continued

Assets are reviewed for impairment if events or changes in circumstances indicate that the carrying value may not be recoverable and provision

is made where necessary. The method and assumptions used in these calculations, together with the associated sensitivities and reasons for

impairment, are set out in the basis of preparation – key estimates and judgements on pages 126 and 127. Any impairment charge/(reversal) is

charged/(credited) to distribution and selling costs in the income statement.

During 2018, the Company exchanged contracts for the disposal of the vacant Twickenham site. The disposal is conditional on a number of factors,

including the applications for and successful grant of planning permission. As at the end of 2021 the timing of the resolution of these factors remains

uncertain and therefore this asset continues to be classified as non-current. At this stage the total proceeds arising from supply chain site disposals

are still expected to be in line with those anticipated in the investment plan.

During 2021, the Company exchanged contracts for the sale of land held in Southall. The cost and associated depreciation has been reclassified

as an asset held for sale in current assets.

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12. Property, plant and equipment continued

Parent Company

Land and buildings

£m

Plant and

equipment

£m

Fixtures and

fittings

£m

Assets under

construction

£m

Total

£m

Cost

Balance at 29 December 2019 166.8 169.1 338.3 5.9 680.1

Additions 3.3 10.1 19.6 22.9 55.9

Disposals (0.7) (8.1) (8.7) – (17.5)

Transfers – 1.9 – (1.9) –

Balance at 2 January 2021 169.4 173.0 349.2 26.9 718.5

Balance at 3 January 2021 169.4 173.0 349.2 26.9 718.5

Additions 4.5 14.9 31.4 2.8 53.6

Disposals (0.5) (11.5) (16.3) – (28.3)

Transfers 19.6 7.3 – (26.9) –

Reclassified as held for sale (1.8) – – – (1.8)

Balance at 1 January 2022 191.2 183.7 364.3 2.8 742.0

Depreciation

Balance at 29 December 2019 48.5 89.5 187.8 – 325.8

Depreciation charge for the year 4.9 14.3 37.6 – 56.8

Impairment charge for the year – – 5.9 – 5.9

Impairment release for the year – – (0.7) – (0.7)

Disposals (0.3) (7.4) (7.5) – (15.2)

Balance at 2 January 2021 53.1 96.4 223.1 – 372.6

Balance at 3 January 2021 53.1 96.4 223.1 – 372.6

Depreciation charge for the year 5.5 15.4 33.3 – 54.2

Impairment charge for the year – 0.1 0.7 – 0.8

Impairment release for the year (1.0) (0.4) (1.3) – (2.7)

Disposals (0.1) (11.4) (15.6) – (27.1)

Reclassified as held for sale (0.2) – – – (0.2)

Balance at 1 January 2022 57.3 100.1 240.2 – 397.6

Carrying amounts

At 29 December 2019 118.3 79.6 150.5 5.9 354.3

At 2 January 2021 116.3 76.6 126.1 26.9 345.9

At 3 January 2021 116.3 76.6 126.1 26.9 345.9

At 1 January 2022 133.9 83.6 124.1 2.8 344.4

NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED

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12. Property, plant and equipment (continued)

Land and buildings

The carrying amount of land and buildings comprises:

Group Parent Company

2021

£m

2020

£m

2021

£m

2020

£m

Freehold property 132.5 114.7 132.7 114.9

Long leasehold property 0.4 0.4 0.4 0.4

Short leasehold property 0.8 1.0 0.8 1.0

133.7 116.1 133.9 116.3

13. Investments

Non-current investments

Parent Company

Shares in subsidiary

undertakings

£m

Cost

Balance at 29 December 2019, 2 January 2021 and 1 January 2022 5.8

Impairment

Balance at 29 December 2019, 2 January 2021 and 1 January 2022 0.8

Carrying amount

Balance at 29 December 2019, 2 January 2021, 3 January 2021 and 1 January 2022 5.0

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13. Investments continued

The undertakings in which the Company’s interest at the year end is more than 20% are as follows:

Principal activity

Address of

registered office

Proportion of

voting rights and

shares held

Charles Bragg (Bakers) Limited Non-trading 1 100%

Greggs (Leasing) Limited Dormant 1 100%

Thurston Parfitt Limited Non-trading 1 100%

Greggs Properties Limited Property holding 1 100%

Olivers (U.K.) Limited Dormant 2 100%

Olivers (U.K.) Development Limited* Non-trading 2 100%

Birketts Holdings Limited Dormant 1 100%

J.R. Birkett and Sons Limited* Non-trading 1 100%

Greggs Trustees Limited Trustees 1 100%

Solstice Zone A Management Company Limited Non-trading 3 28%

* held indirectly

1 Greggs House 2 Clydesmill Bakery 3 The Abbey

Quorum Business Park, 75 Westburn Drive Preston Road,

Newcastle upon Tyne Clydesmill Estate Yeovil

NE12 8BU Cambuslang Somerset

Glasgow BA20 2EN

G72 7NA

Solstice Zone A Management Company Limited was not consolidated on the grounds of materiality in either the current or prior year.

The Company’s subsidiary undertakings listed above were all entitled to exemption, under subsections (1) and (2) of s480 of Companies Act 2006

relating to dormant companies, from the requirement to have their accounts audited.

14. Deferred tax assets and liabilities

Group

Deferred tax assets and liabilities are attributable to the following:

Assets Liabilities Net

2021

£m

2020

£m

2021

£m

2020

£m

2021

£m

2020

£m

Property, plant and equipment – – (18.5) (8.3) (18.5) (8.3)

Employee benefits 6.6 5.5 – – 6.6 5.5

Short-term temporary differences 0.6 0.5 – – 0.6 0.5

Unused tax losses 1.3 – – – 1.3 –

Tax assets/(liabilities) 8.5 6.0 (18.5) (8.3) (10.0) (2.3)

NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED

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14. Deferred tax assets and liabilities continued

Group continued

The Group has a deferred tax asset of £8.5 million relating to buildings which previously qualified for industrial buildings allowance,

that is unrecognised at 1 January 2022 as it is not considered to be recoverable (2 January 2021: £5.7 million).

The movements in temporary differences during the 53 weeks ended 2 January 2021 were as follows:

Balance at

29 December 2019

£m

Recognised

in income

£m

Recognised

in equity

£m

Balance at

2 January 2021

£m

Property, plant and equipment (8.5) 0.2 – (8.3)

Employee benefits 5.4 (0.5) 0.6 5.5

Short-term temporary differences 0.7 (0.2) – 0.5

(2.4) (0.5) 0.6 (2.3)

The movements in temporary differences during the 52 weeks ended 1 January 2022 were as follows:

Balance at

3 January 2021

£m

Recognised

in income

£m

Recognised

in equity

£m

Balance at

1 January 2022

£m

Property, plant and equipment (8.3) (10.2) – (18.5)

Employee benefits 5.5 (0.4) 1.5 6.6

Short-term temporary differences 0.5 0.1 – 0.6

Unused tax losses – 1.3 – 1.3

(2.3) (9.2) 1.5 (10.0)

Parent Company

Deferred tax assets and liabilities are attributable to the following:

Assets Liabilities Net

2021

£m

2020

£m

2021

£m

2020

£m

2021

£m

2020

£m

Property, plant and equipment – – (17.9) (7.8) (17.9) (7.8)

Employee benefits 6.6 5.5 – – 6.6 5.5

Short-term temporary differences 0.6 0.5 – – 0.6 0.5

Unused tax losses 1.3 – – – 1.3 –

Tax assets/(liabilities) 8.5 6.0 (17.9) (7.8) (9.4) (1.8)

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14. Deferred tax assets and liabilities continued

Parent Company continued

The movements in temporary differences during the 53 weeks ended 2 January 2021 were as follows:

Balance at

29 December 2019

£m

Recognised in

income

£m

Recognised in

equity

£m

Balance at

2 January 2021

£m

Property, plant and equipment (8.1) 0.3 – (7.8)

Employee benefits 5.4 (0.5) 0.6 5.5

Short-term temporary differences 0.7 (0.2) – 0.5

(2.0) (0.4) 0.6 (1.8)

The movements in temporary differences during the 52 weeks ended 1 January 2022 were as follows:

Balance at

3 January 2021

£m

Recognised in

income

£m

Recognised in

equity

£m

Balance at

1 January 2022

£m

Property, plant and equipment (7.8) (10.1) – (17.9)

Employee benefits 5.5 (0.4) 1.5 6.6

Short-term temporary differences 0.5 0.1 – 0.6

Unused tax losses – 1.3 – 1.3

(1.8) (9.1) 1.5 (9.4)

15. Inventories

Group and Parent Company

2021

£m

2020

£m

Raw materials and consumables 15.8 13.3

Work in progress 12.1 9.2

Total 27.9 22.5

Inventory recognised as an expense during the year was £347.7 million (2020: £231.8 million). The write-down of inventories that was recognised

as an expense in the period was £36.0 million (2020: £34.9 million). There was no reversal of write-down of inventories in the current or prior year.

NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED

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16. Trade and other receivables

Group and Parent Company

2021

£m

2020

£m

Trade receivables 24.5 22.0

Other receivables 7.4 11.4

Prepayments 5.7 6.0

37.6 39.4

At 1 January 2022 and 2 January 2021 the allowance for bad debts was immaterial. Expected credit losses (‘ECLs’) on financial assets are not material.

The ageing of trade receivables at the balance sheet date was:

Group and Parent Company

2021

£m

2020

£m

Not past due date 23.1 17.3

Past due 1-30 days 1.5 3.9

Past due 31-90 days (0.1) 0.7

Past due over 90 days – 0.1

24.5 22.0

The Group believes that all amounts that are past due by more than 30 days that have an immaterial allowance for ECLs are still collectable in full

based on historic payment behaviour and extensive analysis of customer credit risk. Based on the Group’s monitoring of customer credit risk,

the Group believes that no significant allowance for ECLs is necessary in respect of trade receivables not past due.

17. Cash and cash equivalents

Group and Parent Company

2021

£m

2020

£m

Cash and cash equivalents 198.6 36.8

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18. Trade and other payables

Group Parent Company

2021

£m

2020

£m

2021

£m

2020

£m

Trade payables 74.1 48.8 74.1 48.8

Amounts owed to subsidiary undertakings – – 7.7 7.7

Other taxes and social security 8.8 6.8 8.8 6.8

Other payables 46.6 17.4 46.6 17.4

Accruals 19.6 15.1 19.6 15.1

Advance payments from customers 3.8 2.5 3.8 2.5

Deferred Government grants 0.5 0.5 0.5 0.5

153.4 91.1 161.1 98.8

In 2021 other payables includes accruals of £23.0 million for performance-related remuneration. There were no similar accruals in 2020.

19. Current tax

The current tax asset of £0.4 million in the Group and the Parent Company (2020: Group and Parent Company: £0.0 million) represents the

estimated amount of income taxes recoverable in respect of current and prior years.

20. Non-current liabilities – other payables

Group and Parent Company

2021

£m

2020

£m

Deferred Government grants 3.2 3.7

The Group has been awarded five Government grants relating to the extension of existing facilities and construction of new facilities. The grants,

which have all been recognised as deferred income, are being amortised over the weighted average of the useful lives of the assets they have

been used to acquire.

21. Employee benefits

Defined benefit pension plan

Scheme background

The Company sponsors a funded final salary defined benefit pension plan (the ‘scheme’) for qualifying employees. The scheme was closed to future

accrual in 2008 and all remaining employees who are still members of the scheme are now members of the Company’s defined contribution scheme.

The scheme is administered by a separate Board of Trustees which is legally separate from the Company. The Trustees are composed of

representatives of both the employer and employees. The Trustees are required by law to act in the interest of all relevant beneficiaries

and are responsible for the investment policy with regard to the assets plus the day-to-day administration of the benefits.

NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED

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21. Employee benefits continued

Defined benefit pension plan continued

UK legislation requires that pension schemes are funded prudently. The last funding valuation of the scheme was carried out by a qualified

actuary as at 6 April 2020 and showed a deficit. The Company has agreed a schedule of contributions to the scheme which totalled £15.0 million.

The Company has a legal right to benefit from any surplus on the winding up of the scheme. The IAS 19 valuation at 1 January 2022 showed that the

scheme has a surplus of £3.0 million. However, this surplus and the future-committed contributions would be subject to withholding tax at 35% prior

to any refund to the Company. In accordance with accounting standards this withholding tax has been recognised as a liability and deducted from

the valuation surplus creating an overall liability position of £2.4 million.

Profile of the scheme

The defined benefit pension obligation includes benefits for deferred members and current pensioners. At 1 January 2022, the scheme had no active

members (2020: nil), 361 deferred members (2020: 380) and 283 pensioners (2020: 272). The scheme duration is an indicator of the weighted average

time until benefit payments are made. For the scheme as a whole, the duration is approximately 19 years (2020: 18 years).

Investment strategy

The Company and Trustees have agreed a long-term strategy for reducing investment risk as and when appropriate. This includes a policy to hold

sufficient cash and bond assets to cover the anticipated benefit payments for at least the next five years so as to improve the cashflow matching

of the scheme’s assets and liabilities.

Risks to the scheme

By funding the defined benefit pension scheme the Company is exposed to the risk that the cost of meeting its obligations is higher than anticipated.

This could occur for several reasons including:

– Investment returns on the scheme assets could be lower than anticipated;

– The level of price inflation may be higher than that assumed, resulting in higher payments from the scheme; or

– Scheme members may live longer than assumed, for example due to advances in healthcare.

Defined benefit pension liability

Group and Parent Company

2021

£m

2020

£m

Defined benefit obligation (132.5) (143.4)

Fair value of plan assets 135.5 131.5

Net defined benefit pension surplus/(liability) before IFRIC 14 adjustment 3.0 (11.9)

IFRIC 14 adjustment (5.4) –

Net defined benefit pension liability after IFRIC 14 adjustment (2.4) (11.9)

In accordance with IFRIC 14, the Group has considered that the net defined benefit pension surplus is limited to the present value of benefits available

in the form of any future refunds from the plan (net of withholding tax) and also takes into account the adverse effect of the minimum funding

requirement that the Group is committed to as at 1 January 2022.

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21. Employee benefits (continued)

Defined benefit pension plan continued

Liability for defined benefit pension obligations

Changes in the present value of the defined benefit pension obligation are as follows:

Group and Parent Company

2021

£m

2020

£m

Opening defined benefit pension obligation 143.4 127.6

Past service costs – 0.1

Interest cost 1.8 2.5

Remeasurement (gains)/losses:

– changes in mortality assumptions – 1.1

– changes in financial assumptions (6.6) 19.2

– experience (2.8) (3.4)

Benefits paid (3.3) (3.7)

Closing defined benefit pension obligation 132.5 143.4

Changes in the fair value of plan assets are as follows:

Group and Parent Company

2021

£m

2020

£m

Opening fair value of plan assets 131.5 127.0

Net interest on plan assets 1.7 2.5

Remeasurement gains 3.1 5.7

Company special contribution 2.5 –

Benefits paid (3.3) (3.7)

Closing fair value of plan assets 135.5 131.5

The costs charged in the income statement are as follows:

Group

2021

£m

2020

£m

Interest expense on net defined benefit pension liability 0.1 –

The amounts recognised in other comprehensive income are as follows:

Group

2021

£m

2020

£m

Remeasurement gains/(losses) on defined benefit pension plans 7.1 (11.2)

NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED

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21. Employee benefits (continued)

Cumulative remeasurement gains and losses reported in the consolidated statement of comprehensive income since 28 December 2003,

the transition date to adopted IFRSs, for the Group and the Parent Company are net losses of £24.2 million (2020: net losses of £31.3 million).

The fair value of the plan assets is as follows:

Group and Parent Company

2021

£m

2020

£m

Equities – UK 11.6 21.5

– Overseas 22.6 50.1

Bonds – Corporate 41.0 19.6

– Government 52.1 31.8

Cash and cash equivalents/other 8.2 8.5

135.5 131.5

Principal actuarial assumptions (expressed as weighted averages):

Group and Parent Company

2021 2020

Discount rate 1.85% 1.25%

Future salary increases n/a n/a

Future pension increases 2.05-2.80% 1.80-2.30%

Rate of price inflation (RPI) 3.30% 2.85%

Rate of price inflation (CPI) 2.80% 2.25%

In November 2020 the Government announced that RPI is to be aligned with CPIH (CPI with owner occupiers’ costs) from 2030.

As a result the RPI assumption has been updated along with the assumed future gap between RPI and CPI.

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21. Employee benefits (continued)

Mortality assumption

Mortality in retirement is assumed to be in line with the S2PXA tables using CMI_2020 projections, though placing no weight on the 2020 data due

to the inherent uncertainty over the longer-term implications of Covid-19, and a long-term rate of 1.25% per annum. Under these assumptions,

pensioners aged 65 now are expected to live for a further 22.3 years (2020: 22.2 years) if they are male and 24.3 years (2020: 24.2 years) if they

are female. Members currently aged 45 are expected to live for a further 23.6 years (2020: 23.6 years) from age 65 if they are male and for a

further 25.8 years (2020: 25.7 years) from age 65 if they are female.

The sensitivities regarding the principal assumptions used to measure the scheme liabilities are set out below:

Change in assumption Impact on scheme liabilities

Discount rate 0.1% increase £2.7 million decrease

Inflation 0.1% decrease £1.5 million decrease

Mortality rates 1 year increase £5.3 million increase

If the commutation assumption were to be removed from the valuation the impact would be an increase in the scheme liabilities of £8.0 million.

The other demographic assumptions have been set having regard to latest trends in the scheme.

A triennial valuation of the scheme took place in April 2020 and was finalised during 2021. The outcome of that valuation showed a deficit in funding.

This position was considered by the Trustees and the Company and a schedule of additional contributions of £2.5 million per year for six years,

beginning in 2021, was agreed. This is to ensure that funding requirements are met over the medium term as the scheme works towards

full de-risking.

Defined contribution pension plan

The Company also operates defined contribution pension schemes for other eligible employees. The assets of the schemes are held separately from

those of the Group. The pension cost represents contributions payable by the Group and amounted to £22.4 million (2020: £24.9 million) in the year.

NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED

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21. Employee benefits (continued)

Share-based payments – Group and Parent Company

The Group has established a Savings Related Share Option Scheme, an Executive Share Option Scheme and a Performance Share Plan.

The terms and conditions of the grants for these schemes are as follows, whereby all options are settled by physical delivery of shares:

Date of grant Employees entitled Exercise price

Number of shares

granted Vesting conditions Contractual life

Performance Share

Plan 3

March 2012 Senior

executives

£nil 248,922 Three years’ service, EPS annual compound growth of

3-8% over RPI over those three years and TSR position

relative to an appropriate comparator group

10 years

Executive Share

Option Scheme 16

March 2013 Senior

employees

£4.80 693,000 Three years’ service and EPS growth of 3-7% over RPI

on average over those three years

10 years

Performance Share

Plan 4

March 2013 Senior

executives

£nil 305,592 Three years’ service, EPS annual compound growth of

3-8% over RPI over those three years and TSR position

relative to an appropriate comparator group

10 years

Performance Share

Plan 5

March 2014 Senior

executives

£nil 224,599 Three years’ service, EPS annual compound growth of

1-4% over RPI over those three years and average annual

ROCE of 15.5-17% over those three years

10 years

Executive Share

Option Scheme 17

April 2014 Senior

employees

£5.00 598,225 Three years’ service and EPS growth of 1-4% over RPI

on average over those three years

10 years

Executive Share

Option Scheme 18

March 2015 Senior

employees

£10.22 298,045 Three years’ service and EPS growth of 1-7% over RPI

on average over those three years

10 years

Executive Share

Option Scheme 18a

May 2015 Senior

employee

£10.56 3,285 Three years’ service and EPS growth of 1-7% over RPI

on average over those three years

10 years

Performance Share

Plan 6

March 2015 Senior

executives

£nil 146,174 Three years’ service, EPS annual compound growth of

1-7% over RPI over those three years and average annual

ROCE of 19-21.5% over those three years

10 years

Performance Share

Plan 7

March 2016 Senior

executives

£nil 133,271 Three years’ service, EPS average annual growth of 2-8%

over RPI over those three years and average annual ROCE

of 22-27% over those three years

10 years

Executive Share

Option Scheme 19

April 2016 Senior

employees

£10.88 235,857 Three years’ service and EPS growth of 2-8% over RPI

on average over those three years

10 years

Savings-Related

Share Option

Scheme 17

April 2016 All employees £8.70 361,853 Three years’ service 3.5 years

Performance Share

Plan 8

May 2017 Senior

executives

£nil 206,404 Three years’ service, EPS average annual growth of 5-11%

over those three years and average annual ROCE of

23-27% over those three years

10 years

Executive Share

Option Scheme 20

April 2017 Senior

employees

£10.33 246,219 Three years’ service and EPS growth of 5-11% on average

over those three years

10 years

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NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED

Date of grant Employees entitled Exercise price

Number of shares

granted Vesting conditions Contractual life

Savings-Related

Share Option

Scheme 18

April 2017 All employees £8.07 403,560 Three years’ service 3.5 years

Performance Share

Plan 9

March 2018 Senior

executives

£nil 190,943 Three years’ service, EPS average annual growth of 5-11%

over those three years and average annual ROCE of

25-29% over those three years

10 years

Executive Share

Option Scheme 21

March 2018 Senior

employees

£11.97 228,923 Three years’ service and EPS growth of 5-11% on average

over those three years

10 years

Savings-Related

Share Option

Scheme 19

April 2018 All employees £9.54 335,482 Three years’ service 3.5 years

Performance Share

Plan 10

April 2019 Senior

executives

£nil 128,534 Three years’ service, EPS average annual growth of 5-11%

over those three years and average annual ROCE of

24-28% over those three years

10 years

Executive Share

Option Scheme 22

April 2019 Senior

employees

£18.30 140,913 Three years’ service, EPS average annual growth of 5-11%

over those three years and average annual ROCE of

24-28% over those three years

10 years

Savings-Related

Share Option

Scheme 20

April 2019 All employees £14.84 230,604 Three years’ service 3.5 years

Savings-Related

Share Option

Scheme 21

April 2020 All employees £14.24 239,673 Three years’ service 3.5 years

Performance Share

Plan 11

October 2020 Senior

executives

£nil 166,366 Three years’ service, EPS performance in FY2022, ROCE

performance in FY2022 and two strategic objectives

10 years

Executive Share

Option Scheme 23

November 2020 Senior

employees

£17.20 121,202 Three years’ service, EPS performance in FY2022, ROCE

performance in FY2022 and two strategic objectives

10 years

Savings-Related

Share Option

Scheme 22

April 2021 All employees £16.72 291,979 Three years’ service 3.5 years

Performance Share

Plan 12

April 2021 Senior

executives

£nil 120,022 Three years’ service, EPS performance in FY2023,

ROCE performance in FY2023

10 years

Performance Share

Plan 12 (retained)

April 2021 Senior

executives

£nil 29,512 Three years’ service 10 years

Executive Share Option

Scheme 24 April 2021

Senior

employees £22.63 120,994

Three years’ service, EPS performance in FY2023,

ROCE performance in FY2023 10 years

21. Employee benefits (continued)

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21. Employee benefits (continued)

The number and weighted average exercise price of share options is as follows:

2021 2020

Weighted average

exercise price Number of options

Weighted average

exercise price Number of options

Outstanding at the beginning of the year £6.07 2,352,967 £7.81 2,342,496

Lapsed during the year £10.17 (288,469) £12.03 (87,654)

Exercised during the year £7.11 (653,904) £ 7.03 (429,086)

Granted during the year £13.55 562,507 £10.43 527,211

Outstanding at the end of the year £7.15 1,973,101 £6.07 2,352,967

Exercisable at the end of the year £6.76 527,561 £5.69 721,628

The options outstanding at 1 January 2022 have an exercise price in the range of £nil to £22.63 and have a weighted average contractual life

of 5.4 years. The options exercised during the year had a weighted average market value of £23.94 (2020: £17.61).

The fair value of services received in return for share options granted is measured by reference to the fair value of share options granted.

The estimate of the fair value of the services received is measured based on the Black-Scholes model for all Savings-Related Share Option

Schemes and Executive Share Option Schemes and for Performance Share Plan options granted from 2014 onwards. The fair value per

option granted and the assumptions used in these calculations are as follows:

2021 2020

Performance

Share Plan 12

April 2021

Performance

Share Plan 12

(retained)

April 2021

Executive Share

Option Scheme 24

April 2021

Savings-Related

Share Option

Scheme 22

April 2021

Performance

Share Plan 11

October 2020

Executive Share

Option Scheme 23

November 2020

Savings-Related

Share Option

Scheme 21

April 2020

Fair value at grant date £21.08 £21.08 £6.43 £7.40 £13.25 £4.93 £5.19

Share price £22.72 £22.72 £22.63 £20.89 £14.07 £17.20 £17.80

Exercise price £nil £nil £22.63 £16.72 £nil £17.20 £14.24

Expected volatility 49.17% 49.17% 49.17% 49.17% 45.81% 48.43% 38.02%

Option life 3 years 3 years 3 years 3 years 3 years 3 years 3 years

Expected dividend yield 2.50% 2.50% 2.50% 2.50% 2.00% 2.00% 2.52%

Risk-free rate 0.15% 0.15% 0.15% 0.15% (0.05%) (0.04%) 0.12%

The expected volatility is based on historical volatility, adjusted for any expected changes to future volatility due to publicly available information.

The historical volatility is calculated using a weekly rolling share price for the three-year period immediately prior to the option grant date.

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NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED

21. Employee benefits (continued)

The costs charged to the income statement relating to share-based payments were as follows:

2021

£m

2020

£m

Share options granted in 2017 – 0.2

Share options granted in 2018 (1.0) (0.2)

Share options granted in 2019 0.6 0.5

Share options granted in 2020 1.2 0.4

Share options granted in 2021 1.4 –

Total expense recognised as employee costs 2.2 0.9

22. Provisions

Group and Parent Company

2021

Dilapidations

£m

2021

National

Insurance

£m

2021

Redundancy

£m

2021

Other

£m

2021

Total

£m

2020

Dilapidations

£m

2020

National

Insurance

£m

2020

Redundancy

£m

2020

Other

£m

2020

Total

£m

Balance at start of year 2.7 1.5 0.9 2.3 7.4 2.3 2.3 1.1 1.7 7.4

Additional provision in the year:

– ordinary 1.5 1.6 – – 3.1 1.2 – 10.6 2.1 13.9

– exceptional – – – – – – – 0.2 – 0.2

Utilised in year:

– ordinary (0.4) (0.9) (0.4) (0.2) (1.9) (0.1) (0.2) (9.4) (0.4) (10.1)

– exceptional – – – – – – – (0.8) – (0.8)

Provisions reversed during the year:

– ordinary (0.7) – (0.3) (0.6) (1.6) (0.7) (0.6) (0.7) (1.1) (3.1)

– exceptional – – – – – – – (0.1) – (0.1)

Balance at end of year 3.1 2.2 0.2 1.5 7.0 2.7 1.5 0.9 2.3 7.4

Included in current liabilities 2.0 1.6 0.1 0.5 4.2 1.4 1.4 0.7 0.9 4.4

Included in non-current liabilities 1.1 0.6 0.1 1.0 2.8 1.3 0.1 0.2 1.4 3.0

3.1 2.2 0.2 1.5 7.0 2.7 1.5 0.9 2.3 7.4

The provisions at the end of the year relate to ordinary or exceptional activity as follows:

Ordinary 2.9 2.2 0.1 1.3 6.5 2.5 1.5 0.8 2.1 6.9

Exceptional 0.2 – 0.1 0.2 0.5 0.2 – 0.1 0.2 0.5

3.1 2.2 0.2 1.5 7.0 2.7 1.5 0.9 2.3 7.4

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22. Provisions continued

Dilapidation provisions have been made based on the future expected repair costs required to restore the Group’s leased buildings

to their fair condition at the end of their respective lease terms, where it is considered a reliable estimate can be made.

National Insurance costs are provided in respect of future share options exercises.

Other provisions are largely in respect of onerous costs relating to closed shops where the lease has not yet expired.

The majority of all of the provisions are expected to be utilised within four years such that the impact of discounting would not be material.

23. Capital and reserves

Share capital

Ordinary shares

2021

Number

2020

Number

In issue and fully paid at start of year – ordinary shares of 2p 101,426,038 101,155,901

Issued on exercise of share options 470,983 270,137

101,897,021 101,426,038

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings

of the Company.

During the year 470,983 shares (2020: 270,137) were issued as a result of the exercise of vested options granted to senior management under

the Executive Share Option Scheme and the exercise of options under the Savings-Related Share Option Scheme. Options were exercised at

an average price of £10.28 (2020: £8.23).

Share premium reserve

The share premium reserve relates to the proceeds received in excess of the nominal value of shares issued, net of any transaction costs.

Capital redemption reserve

The capital redemption reserve relates to the nominal value of issued share capital bought back by the Company and cancelled.

Own shares held

Deducted from retained earnings is £48.9 million (2020: £39.0 million) in respect of own shares held by the Greggs Employee Benefit Trust. The Trust,

which was established during 1988 to act as a repository of issued Company shares, holds 375,694 shares (2020: 227,965 shares) with a market value

at 1 January 2022 of £12.5 million (2020: £4.1 million) which have not vested unconditionally in employees. During the year the Trust purchased 330,693

(2020: 25,600) shares for an aggregate consideration of £10.0 million (2020: £0.5 million) and sold 182,921 (2020: 203,992) shares for an aggregate

consideration of £0.3 million (2020: £1.5 million).

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23. Capital and reserves continued

Own shares held continued

The shares held by the Greggs Employee Benefit Trust can be purchased either by employees on the exercise of an option under the Greggs Executive

Share Option Scheme, Greggs Savings-Related Share Option Scheme and Greggs Performance Share Plan or by the trustees of the Greggs Employee

Share Scheme. The trustees have elected to waive the dividends payable on these shares.

Dividends

The following tables analyse dividends when paid and the year to which they relate:

2021

Per share

pence

2020

Per share

pence

2021 interim dividend 15p –

The special dividend, declared on 8 March 2022, amounts to 40.0 pence (£40.6 million) and the proposed final dividend in respect of 2021 amounts

to 42.0 pence (£42.8 million). These dividends are not included as a liability in these accounts.

2021

£m

2020

£m

2021 interim dividend 15.3 –

24. Capital commitments

During the 52 weeks ended 1 January 2022, the Group entered into contracts to purchase property, plant and equipment

and intangible assets for £16.3 million (2020: £8.5 million) which are expected to be settled in the following financial year.

25. Related parties

Identity of related parties

The Group has a related party relationship with its subsidiaries (see Note 13), Directors and executive officers and pension schemes.

Trading transactions with subsidiaries – Group

There have been no transactions between the Company and its subsidiaries or associates during the year (2020: none).

NOTES TO THE CONSOLIDATED ACCOUNTS CONTINUED

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25. Related parties continued

Trading transactions with subsidiaries – Parent Company

Amounts owed to related parties Amounts owed by related parties

2021

£m

2020

£m

2021

£m

2020

£m

Dormant subsidiaries 7.8 7.8 – –

The Greggs Foundation is also a related party and during the year the Company made a donation to the Greggs Foundation of £1.2 million (2020:

£1.1 million), as well as passing on £0.1 million (2020: £0.3 million) raised from the sale of carrier bags and £0.3 million (2020: £0.2 million) raised from

the sale of products. The Greggs Foundation holds 300,000 shares (2020: 300,000 shares) in Greggs plc and Richard Hutton, a Director of Greggs plc,

is a trustee of the Greggs Foundation.

Transactions with key management personnel

Details of Directors’ shareholdings, share options, emoluments, pension benefits and other non-cash benefits can be found in the Directors’

remuneration report on pages 84 to 106. Summary information on remuneration of key management personnel is included in Note 5.

26. Contingent asset

In October 2021 the Company issued formal legal proceedings against its insurer regarding a Covid-19 business interruption claim. An interim payment

was received in January 2021 from the insurer in the sum of £2.5 million (this was recognised as income in the income statement for the 53 weeks

ended 2 January 2021), representing the alleged limit of insurer’s liability. However, on taking legal advice, the Company believes that it is entitled

to more than one such limit and is pursuing its claim in the High Court. The final quantum is not ascertainable at the date of these accounts. The

Company anticipates participating with other claimants in a trial of preliminary legal issues which is due to be heard by the Court in June and July

2022. In accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets, no amount has been recognised as at 1 January 2022,

however a contingent asset is disclosed as it is considered more likely than not that the claim will result in an inflow of economic benefit.

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2012

(as

restated)

2013

2014

(as

restated)

1,3

2015

2016 2017 2018 2019

5,7

2020

2021

Turnover (£m) 734.5 762.4 806.1 835.7 894.2 960.0 1,029.3 1,167.9 811.3 1,229.7

Total sales growth/(decline) 4.8% 3.8% 5.7% 3.7% 7.0% 7.4% 7.2% 13.5% (30.5%) 51.6%

Company-managed shop like-for-like

sales growth/(decline) (2.7%) (0.8%) 4.5% 4.7% 4.2% 3.7% 2.9% 9.2% (36.2%) 52.4%

Profit/(loss) before tax (PBT) excluding

exceptional items (£m) 50.9 41.3 58.3 73.1 80.3 81.7 89.8 114.2 (12.9) 145.6

PBT margin excluding exceptional items 6.9% 5.4% 7.2% 8.7% 9.0% 8.5% 8.7% 9.8% (15.9%) 11.8%

Pre-tax exceptional credit/(charge) (£m) 1.4 (8.1) (8.5) – (5.2) (9.9) (7.2) (5.9) (0.8) –

Profit/(loss) on ordinary activities

including exceptional items and before

tax (£m) 52.4 33.2 49.7 73.0 75.1 71.9 82.6 108.3 (13.7) 145.6

Diluted earnings per share excluding

exceptional items (pence) 38.3 30.6 43.4 55.8 60.8 63.5 70.3 89.7 (12.9) 114.3

Dividend per share declared (pence) 19.5 19.5 22.0 48.6

31.0 32.3 35.7 46.9

– 97.0

Total shareholder return (6.1%) 0.6% 69.7% 87.1% (23.8%) 47.5% (7.4%) 87.5% (22.0%) 87.3%

Capital expenditure (£m) 46.9 47.6 48.9 71.7 80.4 70.4 73.0 86.0 58.7 57.7

Return on capital employed (excluding

exceptional items) 21.3% 16.4% 22.4% 26.8% 28.1% 26.9% 27.4% 20.0% (2.4%) 23.0%

Number of shops in operation at year end 1,671 1,671 1,650 1,698 1,764 1,854 1,953 2,050 2,078 2,181

1 2014 and 2020 were 53 week years, impacting on total sales growth for that year and the year immediately following.

2 Restated following the adoption of IAS 19 (Revised).

3 Restated to include revenue in respect of franchise fit-out costs.

4 Includes a special dividend of 20.0 pence paid in 2015.

5 IFRS 16 leases was implemented at the start of the financial year using the modified retrospective approach. Prior year comparatives have not been restated.

6 Includes a special dividend of 35.0 pence. The final dividend declared in respect of 2019 was cancelled as a cash preservation measure during the Covid-19 crisis.

7 Restated for a change in accounting policy relating to deferred tax.

8 Includes a special dividend of 40.0p.

TEN-YEAR HISTORY

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All of the non-GAAP measures detailed above can be calculated from the GAAP measures included in the annual accounts with the exception

of those detailed below.

Calculation of alternative performance measures

Like-for-like (LFL) sales growth – compares year-on-year cash sales in our company-managed shops, with a calendar year’s trading history

and is calculated as follows:

Two-year LFL

2021 v 2019

£m

2021

£m

2020

£m

Current year LFL sales 981.5 981.5 665.2

Prior year LFL sales 1,015.0 643.9 1,042.2

(Decline)/growth (33.5) 337.6 (37 7.0)

LFL sales (decline)/growth percentage (3.3%) 52.4% (36.2%)

Return on capital employed – calculated by dividing profit before tax by the average total assets less current liabilities for the year.

2021

£m

2020

£m

Profit/(loss) before tax 145.6 (13.7)

Capital employed:

Opening 585.6 576.8

Closing 681.5 585.6

Average 633.6 581.2

Return on capital employed 23.0% (2.4%)

Notional return on capital employed – calculated by dividing profit before tax by the average total assets less current liabilities for the

year and taking into account the pre-agreed adjustments in respect of IFRS 16 used by the Remuneration Committee for determination

of incentive outcomes (see page 102).

2021

As reported

£m

IFRS 16

adjustments

£m

2021

Notional

£m

Profit before tax 145.6 4.7 150.3

Capital employed

Opening 586.5 (235.4)* 351.1

Closing 681.5 (245.9)* 435.6

Average 633.6 393.3

Return on capital employed 23.0% 38.2%

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2020

As reported

£m

IFRS 16

adjustments £m

2020

Notional

£m

(Loss)/profit before tax (13.7) 5.1 (8.6)

Capital employed

Opening 576.8 (219.2)* 357.6

Closing 585.6 (235.3)* 350.3

Average 581.2 354.0

Return on capital employed (2.4%) (2.4%)

* these adjustments are based on forecasts made on transition and therefore cannot be reconciled to the accounts

Ratio of IFRS 16 right-of-use charges on leased property assets to company-managed shop sales – calculated by dividing land

and buildings right-of-use asset charges by company-managed shop turnover.

2021

£m

2019*

£m

Company-managed shop turnover 1,098.2 1,073.8

Land and buildings right-of-use assets depreciation 47.7 48.9

Land and buildings right-of-use assets interest charge 6.3 6.5

Right-of-use asset charges 54.0 55.4

4.9% 5.1%

*as disclosed in the 2019 annual report and accounts

Net cash inflow from operating activities after lease payments – calculated by deducting the repayment of principal of lease liabilities

from net cash flow from operating activities.

2021

£m

2020

£m

Net cash inflow from operating activities 285.5 43.6

Repayment of principal of lease liabilities (49.0) (42.1)

Net cash inflow from operating activities after lease payments 236.5 1.5

171

Annual Report and Accounts 2021Greggs plc

STRATEGIC REPORT DIRECTORS’ REPORT ACCOUNTS

171

Secretary and Advisers

Secretary

Jonathan D Jowett, LL.M. Solicitor

Registered Office

Greggs House

Quorum Business Park

Newcastle upon Tyne

NE12 8BU

Registered number

502851

Bankers

Barclays Bank plc

Barclays House

5 St Ann’s Street

Quayside

Newcastle upon Tyne

NE1 3DX

Auditors

RSM UK Audit LLP

1 St James’ Gate

Newcastle upon Tyne

NE1 4AD

Stockbrokers

UBS

5 Broadgate Circle

London

EC2M 2QS

Investec

2 Gresham Street

London

EC2V 7QP

Solicitors

Muckle LLP

Time Central

32 Gallowgate

Newcastle upon Tyne

NE1 4BF

Linklaters LLP

One Silk Street

London

EC2Y 8HQ

Registrars

Link Group

10th Floor

Central Square

28 Wellington Street

Leeds

LS1 4DL

172

Annual Report and Accounts 2021Greggs plc

NOTES

CBP006452

The outer cover of this report has been

laminated with a biodegradable film.

Around 20 months after composting,

an additive within the film will initiate

the process of oxidation.

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TWO ARE PLACEHOLDERS TO BE

CONFIRMED & SUPPLIED - JG