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). Net debt at 31 March 2023 was US$4,030m (2022: US$3,950m), 1.8 times Benchmark EBITDA (2022: 1.9 times).

- 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 revolving credit facilities from banks totalling US$2.6bn with three years average remaining tenor. This includes our core US$1.95bn club facility, committed until December 2025.

- US$3.9bn of outstanding bonds, with  an average remaining tenor of five years. There is no bond refinancing required until September 2024 and 55% of borrowings fall due in over five years. The US$3.9n bond debt includes €500m of 1.56% bonds due 2031 that we issued on 17 February 2022.

- Cash and Cash equivalents of US$202m.

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

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

- As at 31 March 2023, 90% of our net funding was at fixed interest rates, mitigating the impacts of general rate rises. 

- Our debt levels are usually lower at 31 March due to strong cash inflows during H2. This typically increases the proportion of our debt that is fixed rate at 31 March. 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.

- The effective interest rate on loan and bond debt, including derivatives, was 2.9% for the year ended 31 March 2023 (2022: 2.7%).

- In business trading our revenues and costs are substantially in the same currency for most countries, minimising transactional FX risk. There is a translation risk 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 exposures.

Standard & Poor’s

Moody’s

Long term

A-

Baa1

Long term outlook

Stable

Stable

Short term

A-1

P-2