Debt Information

- Our first priority is to invest in organic innovation to drive growth in the company.

- Secondly we aim to grow the dividend in line with underlying earnings growth.

- Thirdly we look at selective acquisitions which fit with our strategic priorities.

- And we also consider share repurchases.

- Our leverage policy is to target benchmark Net debt in the range of 2.0–2.5x EBITDA, commensurate with maintaining a strong investment grade rating (BBB+ / Baa1 or above).

- When refinancing we aim to space out our debt maturities to mitigate refinancing risk in any one year.

- We hold substantial undrawn committed bank facilities in order to maintain liquidity.

- Undrawn committed bank revolving credit facilities totalling US$2.5bn: 4 years average remaining tenor and includes core US$1.95bn club facility, committed until December 2024.

- On 5 October 2020 we issued £400 million of 0.739% bonds due 2025. This provides funding to replace the bond maturing in October 2021. Including this, we have US$3.9bn of bonds and drawn bank facilities: 7 years average remaining tenor and no bank repayments until April 2022, no bond repayments until October 2021.

- Cash and Cash equivalents of US$165m.

- Our policy is to have 50% - 100% of our net funding at fixed rates, with the remainder at floating rates.

- We use interest rate swaps to adjust the balance between fixed and floating rate liabilities.

- Around two-thirds of our net funding is at fixed rates, with around one-third floating rate. Our debt levels are usually lower at 31 March due to strong cash inflows in H2, which increases the proportion of our debt that is fixed rate. Conversely, debt levels are usually higher at 30 September as we pay staff incentives in June and the final dividend in July, which then reduces the proportion of debt which is at fixed rates.

- In business trading our revenues and costs are substantially in the same currency for each country, minimising transactional risk. There is a translation effect when local currencies are converted into USD.

- Our borrowings are in USD, GBP and Euro. Looking at our total borrowings (bonds, drawn bank facilities and commercial paper) we aim for an allocation broadly in the currencies of our earnings, though we do not borrow in Brazilian Real or Colombian Peso. We use FX contracts to manage residual currency risk exposure.

Standard & Poor’s

Moody’s

Long term

A-

Baa1

Long term outlook

Stable

Stable

Short term

A-1

P-2