McBride plcAnnual Report and Accounts 2023

Everyday

cleaning

products,

expertly

made

McBride plc

Annual Report and Accounts

2023

What’s inside

Strategic report

Our highlights 1

McBride at a glance 2

Chairman’s statement 4

Q&A with our CEO 6

Market context 8

Business model 10

Business model in action 12

Our culture 15

Living our values 16

Our strategy 17

CEO’s report 21

Our divisions 24

CFO’s report 34

Key performance indicators 37

Our stakeholders 39

Environmental, social and governance 45

Climate-related fi nancial disclosures 60

Group non-fi nancial and sustainability

information statement 73

Principal risks and uncertainties 75

Going concern and viability statement 87

Directors’ report

Chairman’s introduction to the Directors’ report 88

Board of Directors 90

Compliance with the UK Corporate

Governance Code 2018 92

Corporate governance statement 93

Nomination Committee report 100

Audit and Risk Committee report 106

Remuneration Committee report 115

Statutory information 146

Statement of Directors’ responsibilities

in respect of the fi nancial statements 150

Financial statements

Independent auditors’ report

to the members of McBride plc 151

Consolidated income statement 158

Consolidated statement of

comprehensive income 159

Consolidated balance sheet 160

Consolidated cash ﬂ ow statement 161

Consolidated statement of changes in equity 162

Notes to the consolidated fi nancial statements 164

Company balance sheet 212

Company statement of changes in equity 213

Notes to the Company fi nancial statements 214

Additional information

Group fi ve-year summary 221

Useful information for shareholders 222

Registered oﬃ ce and advisers 224

www.mcbride.co.uk

Environmental, social

and governance

on pages 45 to 59

Our

divisions

on pages 24 to 33

Our

strategy

on pages 17 to 20

This year, as part of our ongoing commitment to

sustainability, we have taken a ‘digital-ﬁ rst’ approach,

printing only a small number of copies on 100%

recycled paper.

Please note, throughout this report McBride plc is referred

to variously as ‘McBride’, the ‘Company’ or the ‘Group’.

Q&A with

our CEO

on pages 6 and 7

Our highlights

Alternative performance measures

This review includes alternative performance measures

(APMs) that are presented in addition to the standard

International Financial Reporting Standards (IFRS)metrics.

The APMs are adjusted operating profit/(loss), adjusted

EBITDA, adjusted finance costs, adjusted profit/(loss)

before tax, adjusted earnings per share (EPS), free cash

flow and cash conversion %, adjusted ROCE and net debt.

The definitions of the APMs used are listed below:

• adjusted operating profit/(loss) is operating profit/

(loss) before the amortisation of intangible assets and

exceptional items;

• adjusted EBITDA means adjusted operating profit/(loss)

before depreciation and amortisation;

• adjusted finance costs excludes exceptional finance

costs incurred in respect of the independent business

review;

• adjusted profit/(loss) before tax is based on adjusted

operating profit/(loss) less adjusted finance costs;

• adjusted EPS is based on the Group’s profit/(loss) for

the year adjusted for the items excluded from operating

profit/(loss) in arriving at adjusted operating profit/

(loss), the unwinding of discount on provisions and the

tax relating to those items;

• free cash flow is defined as cash generated from

continuing operations before exceptional items and

cash conversion % is defined as free cash flow as a

percentage of adjusted EBITDA;

• adjusted ROCE is defined as total adjusted operating

profit/(loss) from continuing operations divided by

average year-end capital employed. Capital employed

is defined as the total of goodwill and other intangible

assets, property, plant and equipment, right-of-use

assets, inventories, trade and other receivables less

trade and other payables; and

• net debt consists of cash and cash equivalents,

overdrafts, bank and other loans and lease liabilities.

Financial

For the year ended 30 June 2023

Non-financial

(2)

Revenue

£889.0m

(2022: £678.3m)

Adjusted EBITDA

(1)

£34.1m

(2022: £(3.6)m)

Adjusted return on capital

employed (ROCE)

(1)

6.4%

(2022: (11.4)%)

Adjusted operating

profit/(loss)

(1)

£13.5m

(2022: £(24.5)m)

Operating profit/(loss)

£10.3m

(2022: £(26.7)m)

Net debt/adjusted

EBITDA

(1)

4.9x

(2022: (45.7)x)

Adjusted profit/(loss)

before tax

(1)

£0.3m

(2022: £(29.6)m)

Loss before tax from

continuing operations

£(15.1)m

(2022: £(35.3)m)

Free cash flow

(1)

from

continuing operations

£38.0m

(2022: £(22.7)m)

Health and safety

accident frequency

0.88

(2022: 0.48)

Customer service

level(CSL)

87.4%

(2022: 85.4%)

Gender split – female

(3)

38.2%

(2022: 38.5%)

(1) Further details on APMs can be found in note 2 to the consolidated financial statements on page 174.

(2) Please refer to key performance indicators (KPIs) on pages 37 and 38 for further details.

(3) Includes employees, third-party contractors, consultants and agency workers.

Strategic report

1 McBride plc Annual Report and Accounts 2023

McBride at a glance

With trading roots dating back to 1927, McBride boasts a strong heritage. We are private label

experts in our segments. We offer end-to-end development and manufacturing capabilities to

a wide range of customers across Europe and Asia Pacific.

Ho Chi Minh City

Kuala Lumpur

Middleton

Étain

Bagnatica

Sallent

Strzelce

Foetz

Holstebro

Estaimpuis

Hammel

Moyaux

Rosporden

eper

Our manufacturing locations

Europe Asia Pacific

Key: Liquids Unit Dosing Powders Aerosols Asia Pacific

77.7%

of revenue from top five

European economies

>90%

top European retailers supplied

956m

units sold

3,406

colleagues globally

(1)

(1) Includes employees, third-party contractors,

consultants and agency workers.

Strategic report

2 McBride plc Annual Report and Accounts 2023

McBride at a glance continued

Group functions maximising synergy benefits:

• Purchasing

• Logistics

• Central Finance

• IT

• HR

Group sales

£889.0m

Products:

• Laundry liquids and fabric conditioner

• Washing up liquid

• Surface cleaners

• Bleach and toilet cleaners

Group sales

56.0%

Products:

• Household

• Personal care

• Insecticides

• Sanitisers

Group sales

5.2%

Products:

• Laundry

• Auto dishwash

• Stain remover

• Water softener

Group sales

9.7%

Products:

• Hand/bodywash and hair care

• Skincare

• Auto dishwasher tablets

• Laundry liquids

Group sales

2.8%

Products:

• Auto dishwasher tablets

• Laundry capsules

• Water softener tablets

Group sales

26.3%

Strategic report

3 McBride plc Annual Report and Accounts 2023

Dear shareholder

Welcome to the McBride plc 2023 Annual Report and

Accounts. We entered this fi nancial year following one

of the most challenging periods in the Group’s history,

havingto weather unprecedented infl ationary pressures,

many of which persisted into 2023, as well as a volatile

trading environment. However, I am delighted to report

that as a result of the management team’s actions,

combined with the agility and dedication of our talented

and focused divisional teams, McBride hasdelivered

a signifi cantly improved fi nancial and operational

performance.

Performance recovery

For the year ended 30 June 2023, the Group has

generated a step up in reported revenue and improved

profi tability across all divisions, as a result of strong

marginmanagement, proactive operational initiatives

supported by new contract wins and an encouraging

return to volume growth.

The performance recovery is particularly pleasing given

theevolving infl ationary environment with which the

Group has needed to contend. While supply chain

challenges andraw material pricing have largely stabilised,

higher interest rates, labour cost rises and general infl ation

represent continuing headwinds. Importantly, the Group’s

clear positioning and communication to our customers

on three-month pricing has enabled McBride to develop

closer engagement with customers and to react with

greater agility to the changing environment.

The McBride teams deserve immense credit for their

relentless eff orts and commitment to delivering for our

customers and continuing to drive the business forward.

Strategic progress

Following the essential focus on navigating the

challengesexperienced in the year to 30 June 2022,

McBride has made signifi cant strides in progressing its

core Compass strategy to generate sustainable, long-term

shareholder value.

Each year, the Board and management team rigorously

evaluate the Group and divisional strategies to ensure they

will deliver our strategic ambitions. Following these reviews,

we remain resolute in our commitment to delivering the

Compass strategy, delivering targeted growth that is above

market levels and improved eff ectiveness in everything

we do. This latter contributionwill be fulfi lled through

ourmulti-programme Transformation agenda, focused

ondelivering an exceptional customer experience, enabled

byamore digitally enhanced and enabled business.

While the economic environment

remained challenging over the

past twelve months, the mitigating

actions taken in 2022 positioned

McBride for a strong recovery and

we have seen continued progress

against our strategic objectives.

Jeff Nodland

Chairman

Chairman’s statement

3.0bn

dishwasher tablets sold

Strategic report

4 McBride plc Annual Report and Accounts 2023

Chairman’s statement continued

Environmental, social and governance (ESG)

As a responsible business, McBride places significant

emphasis on its ESG agenda and this is highlighted

by the fact that our CEO continues to lead and drive

this workstream. The ESG group provides a high level

of expertise and oversight for sustainability initiatives

andrequirements. Over the past year the ESG team

havecompleted an ambitious project to review all

McBrideScope 1, 2 and 3 emissions, creating an

understanding of how our emissions are split within

the business. This has allowed McBride to develop our

first Science-Based Target covering all of our Scope 1

and 2 emissions. This is an important first step as we

continue onour journey to Net Zero with focus on how

toresourceand prioritise our targets.

We have also embraced the requirements of the Task

Force on Climate-related Financial Disclosures (TCFD),

having begun the process of integrating TCFD best

practice requirements into our established risk and ESG

programmes. Over the next twelve months, the business

will continue to prioritise and commit to the initiatives

thatwill have the biggest impact, in the most effective

andcost-conscious manner. On pages 45 to 59 we

explainour approach to enhancing the sustainability of

ourbusiness, whilst outlining some of the key initiatives

we are taking to create value for our customers,

employees, shareholders and society.

Governance

The Board remains focused on ensuring that the UK

Corporate Governance Code’s principles are applied.

Myintroduction to the Directors’ report on pages 88

and 89 sets out how the Board has complied with the

principles of the UK Corporate Governance Code 2018

(‘the Code’), which applied throughout the financial year

ended 30June2023.

Board

On 31 May 2023, we announced that Igor Kuzniar would

step down as a Non-Executive Director of the Company

with effect from 31 May 2023. The Board extends its

thanks and appreciation to Igor for the commitment

and contribution he has provided to McBride and its

committees throughout his four years’ service as a

Director.

Our people

The Board would like to thank all colleagues across

McBride for their continued dedication to ensuring

outstanding customer service and demonstrating

an unwavering ability to adapt and overcome the

challengesthe business has faced. The scale of the

performance recovery and the continued business

momentum is a testament to the strength of our teams

and their embodiment of the values within our business.

I look forward to our future as we continue to drive

forwardthe Compass strategy and its growth and

Transformation agenda, which will further strengthen

our market-leading position and ensure the delivery

oflong-term, sustainable shareholder value.

Jeff Nodland

Chairman

The Board would like to thank

all McBride colleagues for

their continued dedication and

unwavering ability to adapt and

overcome the challenges the

business has faced.

Find out more about our

people in the ESG section

on pages 45 to 59.

Strategic report

5 McBride plc Annual Report and Accounts 2023

Our teams have shown how agile

and fl exible they can be in the face

of extreme volatility, going the

extra mile to execute our strategy

and deliver for customers.

Chris Smith

Chief Executive Offi cer

Q&A with our CEO

What have you learnt from the

experiences of the past two years?

We have learned a lot from the experiences

of the past two years, despite them being

incredibly challenging for the business. First

and foremost, our teams have shown how

agile and fl exible they can be in the face of

extreme volatility by going the extra mile to

execute our strategy and deliver for customers.

Thesupport from our customers in taking price

rises in the last few years was essential and

welcome and with challenging availability for

materials at the same time, we learned more

about the relative importance of quality and

reliability across both our and our customers’

supply chains.

Additionally, a very signifi cant move for us

has been the progress we have made with

customers on moving our basis of trading

to three-monthly pricing. This has allowed

us to respond quickly and more eff ectively

to what remains a very volatile trading

environment, and to work more closely with

our customers to ensure pricing is sustainable,

wellcommunicated and data-led.

Tell us about some of the ways

McBride has progressed its ESG

strategy this year, and what are

yourpriorities for 2024?

Acting responsibly and putting inplace

initiatives that will safeguard the environment

for generations to come has long been an

essential part of everyday business, and

McBride is committed to playing its part

inthepath to Net Zero.

Along with setting ambitious Scope 1 and 2

emissions targets in 2023, we also introduced

a range of new innovations, both to advance

our own Net Zero strategy, but also to help our

customers and the end consumer act in a more

environmentally-conscious manner. Initiatives

include the launch of Elopak cartonsfor liquids,

child-safe cardboard cartons for laundry

capsules, concentrated laundry powder and

liquids, and the introduction of an aerosol

cardboard cap.

At the date of writing, a signifi cant amount

of data capture and analysis, alongside

our adviser, Climate Partner, has now been

completed on our Scope 3 reduction options.

By December 2023, we expect to have set

our ten-year Scope 1, 2 and 3 targets and

our overall Net Zero timeline as part of our

commitment to the Science-Based Targets

protocol.

728.6m

units sold in Liquids division

Strategic report

6 McBride plc Annual Report and Accounts 2023

Q&A with our CEO continued

Given the signifi cant macroeconomic

changes since 2021, is Compass still

the right strategy for the business in

today’s world?

I fi rmly believe that the Compass strategy and

divisional organisation that was introduced in

2021 has ensured that the Group successfully

weathered the extraordinary infl ation levels

we experienced in recent times. The focus,

accountability and specialisms of the new

divisions have meant that as well as dealing

with the margin crisis, our high-quality new

teams retained bandwidth to work on refi ning

and driving forward their strategic priorities.

This is evident in our current trading, especially

in terms of the growth, which is being

delivered both from market dynamics but

more importantly contract wins and share gain.

Wehave a clear focus on agility and providing

expertise to respond to macro challenges

andopportunities.

Looking at your debt profi le, how are

you planning to improve that over the

next few years?

We have taken decisive action over the past

couple of years to manage our debt levels

more carefully. However, we recognise that

they remain too high, and that we need to

reduce the interest burden. That will remain an

important priority for the whole business over

the next few years, and we have a clear plan in

place to bring our debt levels gradually back to

our target levels. Importantly, that work will not

stop us delivering the Compass strategy and

setting this business up for the long term.

Of the seven Transformation plan

programmes you’ve mentioned,

which would be the most impactful?

The fi rst thing I’d say is that as a strategy,

Compass remains as relevant and compelling

today as it did when we fi rst announced

it in 2021. All seven of the Transformation

programmes we’ve discussed will play their

part in transforming McBride and putting us

fi rmly on the path to long-term, sustainable

growth, so that we can deliver value for all

ourstakeholders.

Within that though, if I had to choose three it

would be the SAP roll out and the Customer

and Service Excellence programmes. These

initiatives will diff erentiate McBride in the

marketplace, set us apart from our peer

group and deliver the platform for sustained

businessexcellence.

What have been the key priorities for

your ESG agenda in the current year?

Great progress has been made with regards

the environment element of our ESG agenda.

Now that the baseline for McBride’s carbon

footprint has been established, we have

embedded a process for the reporting of

ourScope 1, 2 and 3 emissions. 2023 has seen

McBride set its fi rst Science-Based Target

with respect to Scope 1 and 2 emissions and

defi ne our strategy for engaging with our

suppliers on target setting for our Scope 3

emissions. We continue to off er improved

product sustainability options for our

customers. This year we have increased the use

of post-consumer recyclable (PCR) materials

inall divisions and we continue to disrupt the

market with launches in the refi ll cleaning

category.

Asia Pacifi c manufacturing

Malaysia

Our ESG agenda

Our Transformation programme

See more on page 18

See more on pages 45 to 59

Strategic report

7 McBride plc Annual Report and Accounts 2023

A closer and better

understanding of our

direct customers and

the end consumer,

enables us to better

align our business

to the current and

evolving needs of the

markets we serve.

Market context

Raw materials

While Global supply chains have

shown signs of improvement in recent

months, fragility remains. The high

infl ationary environment has led to

pricing disconnects, as producers

reduce output to manage supply and

demand balances. Although many

feedstocks have softened from the

all-time highs of 2022 they remain

well above historic levels, seemingly

refl ecting a ‘new normal’. Suppliers

are also raising prices to off set

signifi cant labour infl ation.

Response

McBride has shown great supply

chain resilience, with robust

procurement strategies ensuring

that our plants have continued

to produce without any major

material outages. The Group

continues to drive a cost-conscious

approach to all activities, helping

to mitigate high infl ationary

pressures and limit price increases

to customers. TheGroup is making

good progress on initiatives to

reduce future input cost volatility.

Sustainability

Our customers, consumers and

our employees continue to place

a high level of importance on the

sustainability of our manufactured

products.

Response

Improving sustainability is a

fundamental part of our corporate

strategy, targets are built into all

of our product development and

operations. Our expert teams

source the most appropriate

raw materials and develop new

products that can facilitate re-use

and greater concentration, off ering

not only excellent performance

but also proven sustainability

benefi ts. As we work towards

setting Science-Based Targets for

our business, we are collaborating

with our customers, suppliers and

employees to drive meaningful

actions that further reduce our

impact on the environment.

Regulation

The regulatory framework in which

McBride plc operates is in a state of

evolution, with an unprecedented

number of new and amended

regulations. These changes result from

the EU and UK moving to Net Zero

and have a direct impact on various

aspects of our operations, including the

production, utilisation and disposal of

our products. As a result, we can expect

increased costs in these areas; however,

alongside this is the opportunity to

develop product off erings that meet

these legal requirements and suit

customer and consumer demands.

Response

We consider compliance with

legislative requirements as an

integral aspect of the services

we provide to our customers. We

wholeheartedly embrace initiatives

that aim to enhance safety and

sustainability for both consumers

and the environment. To achieve

this, we allocate substantial

investments towards our factories

and continuously improve

our product portfolio. These

measures enable us to uphold

full compliance with all pertinent

product legislation, ensuring the

highest standards are met and

surpassed.

Strategic report

8 McBride plc Annual Report and Accounts 2023

In 2023 we proudly started to fi ll

homecare liquids into cardboard cartons,

in a drive to reduce plastic packaging

within our portfolio. Thisinvestment in

innovation off ers great benefi ts when

compared to anequivalent PET plastic

bottle: facilitating a reduction in plastic

by 80%, reducing packaging weight by

35%, enabling improved palletisation

and reducing our packaging carbon

footprint by 50%.

The McBride UK Regional team played

a pivotal role implementing this

innovation, working closely with key UK

customers to bring to market improved

super-concentrated own-brand laundry

detergents in our fully recyclable and

FSC® certifi ed cardboard cartons.

The laundry liquid was reformulated

and, as a result, a smaller amount of

detergent is now required per wash,

allowing for more washes per carton.

Bycoupling sustainably-led formulations

and packaging innovation,we

continue our quest and support our

customers to reduce the carbon

footprint and environmental impact

ofhouseholdproducts.

Case study

McBride UK Regional team support

theimplementation of sustainable

packaginginnovation

Market context continued

Sales channels

Consumers continue to take action

to manage their household spend

as the cost-of-living crisis persists.

Retailers are actively adapting their

assortments and pricing strategies

to respond, and remain competitive.

Post Covid-19, the discounter channel

has recovered and the growth of

online and convenience channels

haseased.

Response

We continue to support retailers,

delivering market-appropriate

and channel-relevant

recommendations. We provide

product solutions to meet price

and range needs of shoppers,

whilst continuing to satisfy the

evolving cleaning requirements of

consumers, doing so economically

and environmentally.

Consumers

Discretionary spend remains low,

with a continued fi nancial squeeze

for consumers driven by infl ation.

At shelf, shoppers are refl ecting

this: trading down to less expensive

products and formats and cutting

back on non-essential items. Athome,

consumer behaviour also evolves:

reducing usage, decreasing machine

energy settings, putting on bigger

wash loads and we are seeing an

increased level of dishwashing

byhand.

Response

Our manufacture of high-quality,

great-value products, so that

every home can be clean and

hygienic, is particularly important

to consumers at a time when they

face cost-of-living challenges

driven by high infl ation. Many of

our ranges have been reformulated

to reduce cost. For example, we

have reduced the weight of our

Liquids bottles and Aerosols cans,

which has also improved product

sustainability.

Brand owners

Owners of household cleaning and

personal care brands use private label

suppliers to contract manufacture

their products. This may be because

they lack specifi c technologies in

their own factories, want to bring new

innovations to market quicker, or to

reduce their operational footprint.

Response

McBride’s scale, know-how,

professionalism and reputation

for manufacturing high-quality

products, assures major brand

owners that McBride is the

right partner to support their

innovation or strategic outsourcing

objectives. Such contracts off er

signifi cant worldwide growth

opportunities, de-risked margins

and help drive operational

effi ciencies byincreasing asset

utilisation. TheGroup is seeing

more longer-term structural supply

arrangements.

Strategic report

9 McBride plc Annual Report and Accounts 2023

80%

plastic

reduction

50%

reduced

carbon

footprint

Key statistics:

Driven by our purpose, our business model builds on thekeyattributes

that set us apart, to create value forour customers, our people, our shareholders

and our wider stakeholder community.

Business model

What we do

Our purpose

Everyday value cleaning

products so every home

canbe clean and hygienic

We are a producer of cleaning

products primarily for

thehome.

We define the home as the

dwelling that welive in and

the people who live there.

Our products clean laundry,

dishes and general surfaces.

In addition, we offer specialist

aerosol products in Europe

andpersonal care products in

Asia Pacific.

Our aim is to provide ranges

of quality at value prices to

permit our retailer customers

to offer an affordable quality

alternative to higher-cost

brands.

Our value engineering, quality

and scale of operations

provide affordable cleaning

products for our customers’

end consumers, helping to

ensure all homes are clean

and hygienic.

How we allocate capital

Debt management

(including deleveraging)

Reinvest for growth

Strategic investments

Distributions to

shareholders

How we make our money

We sell to retailers and

branders their finished

products, aswell as

asmall number of

McBridebrands

84.9%

Retailers’ private label

9.6%

International and regional

branders (contract

manufacturing)

2.2%

Professional and cleaning

suppliers

3.3%

McBride brands

What sets us apart

Market standing

• Wide market coverage/

knowledge from

pan-European operations

• Reduced risk from

customer diversification

• Scale advantages:

largestvolume player

• Blue-chip reputation

Sustainability

• Innovation – specialisation

and focus

• Sustainable product

expertise – formulation and

packaging

Talent

• Experienced management

and dedicated employees

Operational

excellence

• Manufacturing excellence

• Supply chain co-ordination

and capabilities

Four pillars underpinning

ourstrategy:

How we do it

See more on page 11

Customers first

R&D expertise

Production process

Distribution efficiency

Strategic report

10 McBride plc Annual Report and Accounts 2023

We seek to provide our customers a compelling overalloffer,balancing their priorities

for price, service and quality.

Business model continued

How we do it explained

Underpinned by our strong commitment to sustainability: Ethical trading – Sustainability-orientated innovation – Waste reduction

Distribution efficiency:

Into

Customer distribution hubs

McBride warehouse network

Consolidating the customer

requirements via:

Customers first:

The Group has well-established

market positions in all of

Europe’s major economies

and supplies its products to a

very wide range of customers,

including virtually all of Europe’s

leading retailers

R&D expertise:

Best-in-class expertise and

know-how in:

• Formulation

• Prototyping

• Manufacturing

• Packaging options

• Sourcing

Production process:

We are end-to-end

producers

• Resins

• Base chemicals

• Packaging

• Blow/injection moulding

• Liquid and powder mixing

• Bottle filling

• Capsule forming and filling

• Tablet pressing

• Powder filling

• Shelf-ready finished products

Our in-house processes:

From:

To:

Strategic report

11 McBride plc Annual Report and Accounts 2023

Business model in action

Customer

partnerships

McBride works in close partnership

with its customers to fully meet

their needs.

A key priority for McBride is to ensure that we

serve our customers professionally and meet their

expectations. We partner eff ectively with our private

label customers to progress their product range,

creating more sustainable and cost-eff ective products.

We support each customer’s strategy by providing

products that meet the needs of their consumers and

are accretive for their categories. McBride’s technical

teams have wide expertise regarding ever evolving

regulatory requirements allowing our customers to

anticipate upcoming changes.

We are also a fl exible and professional partner for

our contract manufacturing customers. In addition

to producing their existing ranges, we increasingly

co-develop new product off erings.

An increasing number of customers have visited our

manufacturing sites in the past year. This has helped

our teams to gain a greater understanding of our

customers’ key priorities and needs.

>2,000

new SKUs launched

31.1%

revenue growth

manufacturing sites in the past year. This has helped

Strategic report

12 McBride plc Annual Report and Accounts 2023

Business model in action continued

Manufacturing

excellence

McBride’s Lean Conversion

Programme is improving the

operational productivity in our

business, developing our people,

processes and plant.

Our key ‘Lean’ processes, targeting operational

strategy and delivery, focused improvement projects

and capability building, are a key element of our

manufacturing excellence strategy.

The programme, impacting seven Liquids

manufacturing locations, has delivered signifi cant

improvements in capacity, material effi ciency and

service through various ‘Kaizen’ activities in our

manufacturing environments.

We are excited to roll out the programme across

allgeographies and functional areas of the

businessin2024.

+8%

overall equipment eﬀ ectiveness (OEE)

32.1m

units of capacity unlocked

Liquids manufacturing

eper

Strategic report

13 McBride plc Annual Report and Accounts 2023

Business model in action continued

Customer

service focus

2023 has been a year of

huge challenge but also great

achievement in customer service

and logistics at McBride.

Our teams addressed challenges caused by dramatic

cost infl ation, transport capacity shortages and

increasing demand to deliver the very best customer

service. This resulted in a signifi cant improvement in

on-time delivery and a major reduction in shortages,

evidenced by an improvement in our key CSL metric.

Some key areas of focus helped us to ‘deliver our

promise’ to customers:

• Organisational structure – reorganising our

customer service and logistics teams to ensure

better ‘end-to-end’ focus on delivering great service

to our customers

• Technology – implementation of a Transport

Management System (TMS), automating our

delivery planning and execution process, allowing

our team to spend more time on continuous

customer service improvements

• Partnerships – moved to formal partnership

agreements with our third-party warehouse and

transport providers to facilitate better on-time

deliveries to our customers

12.7%

improvement in CSL

42.3%

reduction in shortages

Team warehouse visit

Gera

Strategic report

14 McBride plc Annual Report and Accounts 2023

Our purpose and vision are founded on a set of common values, enabling our

focused divisional teams to enhance our specialist reputation in the market

and better target opportunities for growth and excellence.

Our guiding principles

Our purpose

Everyday value cleaning products,

soevery home can be clean and hygienic.

Our vision

McBride will extend its position as the leading value

producer of everyday consumer hygiene products,

taking revenue to €1 billion through focused and

sustainable divisional strategies.

Our culture

Asia Pacifi c

Malaysia

Always

committed

Giving and taking

accountability

Working

together

Aspire to

be thebest

Find out more about our values on page 16

While McBride operates through fi ve divisional

teams supported by Group central functions,

we remain one McBride with a single, unifying

purpose and a common shared vision.

Our values

Focused

growth

Eﬀ ective

execution

Proud of our

identity

Find out more about our purpose on pages 10 and 11

Strategic report

15 McBride plc Annual Report and Accounts 2023

Living our values

Always committed

• The HR team, supported by colleagues from

GIS, successfully implemented the fi rst phase

of our HR Digital Transformation programme

that will simplify and rationalise our technology

landscape. The team managed signifi cant

additional workload associated with this project

while continuing to eff ectively perform their

day jobs.

• We now have one standard HR system

supporting the European business, allowing us

to eff ectively and effi ciently manage the Hire

to Retire process. The new system enhances

both the manager and colleague experience

through self-service functionality and shifts

the power from HR to the end user, aligning

with our aspirational value of giving and taking

accountability.

Working together

• Our new ‘click to lock’ box skillet packaging

was developed by bringing together diverse

skills and perspectives to achieve a common

goal: creating innovative sustainable packaging

for laundry capsules.

• Our design partners created an eye-catching

and eco-friendly design; our engineers ensured

functionality, consumer safety and durability;

our supply chain experts created and optimised

the manufacturing processes, initially manually

and on a small scale before scaling up the

process to fully automated; and our marketing

colleagues presented the sustainability benefi ts

to customers.

• Through open communication, shared goals

and collaborative entrepreneurship, we

navigated tough challenges and, together, we

proved that innovation thrives when our expert

teams work together.

Giving and taking accountability

• The Powders division faced huge, unexpected

input cost increases at the end of the fi rst half,

driven by global tightness in the supply of salts.

• The Powders team took less than two weeks

to build a comprehensive plan to mitigate the

exceptional cost impact and three months

to fully implement the plan, demonstrating

outstanding accountability in this crisis

management situation. New compacted

product off erings were developed in a very

short timescale, mitigating the infl ationary

impacts for both customers and consumers.

• The specialism, focus and agility of the

division now brings huge benefi ts to value

chain stakeholders subjected to volatile

environments.

Aspire to be the best

• Our Global Information Systems team has

commenced the journey of modernising

our technology platforms to ensure our

colleagues and assets have access to value-add

capabilities and make it easier to engage with

colleagues, customers and processes.

• The introduction of a new productivity suite of

software allows our colleagues to collaborate

and communicate with each other through

any device, anywhere and anytime, delivering

information quicker.

• The rollout was slick and the new tools and

functionality are adding value every day to

end users and the business. The modernisation

of our core business process systems and

providing modern productivity tools to our

employees positively positions us for the future.

Group HR team

Shifting HR to

the next level

Unit Dosing team Global Information

Systems team

Powders team

16 McBride plc Annual Report and Accounts 2023

Strategic report

17 McBride plc Annual Report and Accounts 2023

Our strategy

Our Compass strategy was implemented in 2021 to generate sustained revenue growth and

improved margins from efficiency and effectiveness of our key activities, delivered through

accountable business divisions and core central functions.

The divisional teams have been in place for nearly two years now and their maturity, accountability and strategic development is increasingly

visible, with encouraging progress in support of the growth agenda. As the inflationary environment stabilises, our attention now turns to the

efficiency and effectiveness element of Compass.

Our Compass operating model

Separate divisional strategies Ensures focus

Decentralised model Rekindles specialisms, agility, speed

Accountable divisional teams Improves execution

Central core Maintains scale advantage

Growth

Win/loss ratio positive

Favourable environment for private label

Contract manufacturing gains to deliver from 2024

Innovation launches, especially packaging

Private label share recovered, McBride market share growing

Our ambition

Deliver sustained

top-line growth

Consolidate position

as industry #1

Double-digit

EBITDA margins

Partner of choice

Transformation

Leadership appointed

Team fully appointed with a good mix of internal and external talent

Programme now underway

Targeting £50 million over five years

Strategic report

Our Transformation plan consists of seven programmes that are balancedbetweensales

andmargin growth, cost reduction and cash generation.

Transformation programme is underway

The Group’s Transformation programme is now

underway, led by a new Chief Transformation

Officer, a role that sits on the Executive Committee.

The plan has been consciously constructed to

contain seven overall programmes overseen by a

newly appointed programme management office.

Our carbon reduction programme will be a common

thread through all the other programmes, as we look

to decarbonise the business over the coming years.

We expect that the benefits of these programmes

will fall into two groups, one supporting sales and

margin growth, the other delivering cost reduction

and cash management improvements.

Supporting our sales and margin growth ambition

will be programmes delivering commercial excellence

from our customer-facing teams and service

excellence from our supply chain activities.

Key to cost benefit realisation will be the migration

to a new ERP system over the coming three to four

years, permitting a more modern, standard operating

model with improved data analytics.

Capital Markets Day

More detail about our Transformation programme will

be shared at our upcoming Capital Markets Day.

Programme management office discipline

Environmental transformation

Setting out the plan to deliver our decarbonisation ambition

Sales and

margin growth

Cost reduction and

cash generation

Commercial excellence

Skills/tools/process investment

Operating model excellence

A new Enterprise Resource Planning (ERP)

system

Operations transformation

Targeted investments to support

growthandinnovation

HR digital transformation

Digital replatforming of our

core HR processes

Service excellence

Overhauling our supply chain to keep our

‘customers first’ focus

Cost excellence

Designing out waste,

duplication and non-value adding activity

18 McBride plc Annual Report and Accounts 2023

Our strategy continued

Strategic report

Our strategy continued

Each division has diff erent

opportunities, initiatives, challenges

and improvement options in their

business; all reinforcing the need for

varying strategies for the diff erent

parts of this business.

Hence, the Group continues to be

managed as a series of portfolio

businesses, each with its own

identity, strategy, operating model

and role within the Group.

Separate, focused and accountable

divisional teams continue to

strengthen our specialist position

and improve speed and agility in all

our dealings and activities.

Central support services such as

purchasing, logistics, fi nance, HR and

IT continue to drive and deliver scale

advantages to the entire Group.

One McBride

Five divisions

Market factors

• Large, stable market

• Commoditised product

categories

• Fragmented competition

• Cost competitiveness

paramount

Market factors

• Dynamic market

• Brander-led innovation

• Sustainability is a key driver

• E-commerce potential

McBride approach

• Low-cost off er

• Reliable and trustworthy

• Delivering sustainable

(innovative) products

• Build on our local strengths

McBride approach

• Specialist supplier

• Embedded in industry

• Effi cient innovator

• Right and fl exible asset base

• Cost competitive by

scaleandoff ering

Focus areas

• Transform our cost through

operational excellence

• Value engineer/simplify our

product portfolio

• Sustainability-oriented

innovation

• Partner with focus customers

Focus areas

• Continued focus on

dishwasher tablets and

laundrycapsules

• Sustainable formulations and

packaging development

• Continued adaptation of core

off ering

Strategy

Optimise to grow Strategy Accelerate to grow

Cost

leadership

Cash

generation

Product

leadership

Strategic

growth

Read more on pages 24 and 25 Read more on pages 26 and 27

Be the leading value

producer of everyday

cleaning products,

leveraging scale and

unrivalled product

expertise to deliver a

segmented product and

customer proposition

with a cost-aware

sustainability agenda.

We support divisional success by

leveraging the scale of the Group through

eff ective central teams for purchasing,

talent management and other shared

services.

Strategic report

19 McBride plc Annual Report and Accounts 2023

Our strategy continued

Market factors

• Asset-heavy competitive

market

• Slowing market decline

• Consumer transitioning

• Market consolidating

Market factors

• Well-established market

• Leverage new opportunities

with contract manufacturing

• Niche, specialist player

Market factors

• Return to rapid market

growth

• Population and income

growth

• Rapid urbanisation

• Maturing retail infrastructure

McBride approach

• Low cost

• Technical capability drive

• Asset utilisation

• Targeted markets/

opportunities

McBride approach

• Capitalise on ‘Made in France’

• Build on eco credentials

• Beyond France

McBride approach

• High quality and service

• Develop key relationships

• Continue to add growth

capacity

• Remain cost focused

Focus areas

• Cost optimisation

• Expand contract

manufacturing

• Continue technical innovations

• Reinvigorate market position

• Continue to capitalise on

environmental leadership

Focus areas

• Cost optimisation

• Expand volumes in Germany

• Best-in-class commercial and

technical approach

Focus areas

• Fully exploit Malaysia facility

• Expand Vietnam output

• Expand into household

• Capture and develop contract

manufacturing opportunities

Strategy

Revitalise to grow Strategy Develop to grow Strategy Deliver to grow

Product

leadership

Value

optimisation

Cost and

value

leadership

Strategic

upside

Cost

leadership

Cash

generation

Read more on pages 30 and 31Read more on pages 28 and 29 Read more on pages 32 and 33

Liquids manufacturing

eper

Strategic report

20 McBride plc Annual Report and Accounts 2023

Overall business performance

McBride entered the financial year to 30 June 2023 in a

significantly stronger position than the previous year, when

a volatile macroeconomic backdrop led the Group and the

industry to experience unprecedented margin pressures.

The decisive actions we implemented through the second

half of calendar year 2021 and into 2022, to enable the

business to weather these challenges, have provided

the foundations for a much-improved performance and,

encouragingly, a return to strong volume growth. Whilst

the extreme input cost inflationary period is behind us,

many of the themes highlighted in last year’s Annual Report

remained significant and continued to be factors that

our teams have had to contend with throughout the year.

Asaresult, McBride has had to be agile and innovative in its

approach; skills that stand us in good stead for the future.

The first six months of the year were characterised by a

focus on margin and service recovery as the dual effects

of pricing and input materials inflation from the preceding

twelve months cycled through the business, with sales

volumes relatively flat and the business break-even at the

trading profit level. However, the second half saw a pleasing

return to volume growth and stronger profitability levels,

driven by the stabilisation of raw materials prices, combined

with McBride delivering new contract wins and a strong

volume pull, there was a growing consumer shift towards

private label products across all markets.

At a Group level, revenue was up 31.1% to £889.0

million (2022: £678.3m) with £159.6 million a result of

the wrap-around effect of selling prices increases and

£32.1million from higher volumes. Operating profit from

continuing operations improved significantly on the prior

year, increasing to £10.3 million (2022: loss of £26.7m).

Adjusted operating profit

(1)

increased to £13.5million (2022:

adjusted operating loss of £24.5m), with adjusted operating

profit in the second half of £14.8 million compared to a first

half adjusted loss of £1.3 million.

Heading into the financial year ending 30 June 2023, one

of our top priorities was keeping a tight hold on costs and

working capital and maintaining strong capital expenditure

control. The focus across all teams on debt management

has resulted in no significant deterioration in our debt levels.

Liquidity remains strong despite higher activity levels at the

end of the year. Debt reduction will remain an important

area of focus into the new financial year.

In the face of such clear and profound pressures, this

set of results represents an excellent performance and is

testament to the hard work of our teams, our commitment

to customer service and the steps we have taken to

strengthen the business and position it for long-term

growth.

Inflationary environment

As expected, inflation remained a major challenge

throughout the year, with the impact increasingly being

from labour and energy costs, with chemicals and

packaging costs more benign. Energy cost inflation remains

an unpredictable factor; however, McBride’s own energy

costs are fully hedged, with the principal risk to McBride

being the indirect impact of energy in its core raw material

supplies.

While inflation presented significant challenges, it led to

an important opportunity to consider how our pricing

approach to customers is best managed. The Group has

persisted this past year with the principle of not committing

pricing to customers beyond three months. With the

ongoing potential for significant volatility in input costs, this

principle has enabled divisions to respond more effectively

and quickly to shifts in the macroeconomic environment.

Through our data-led approach, our teams can now clearly

demonstrate the dynamics behind the decision-making,

allowing teams to engage with customers and move pricing

in a collaborative, flexible manner.

Volume growth

Alongside margin recovery through price increases and

value engineering, the volume growth across the Group in

the second half of the year helped to deliver our return to

profit. Importantly, while the total market for private label

and branded products is estimated to have fallen by 5.5%

in volume terms, McBride delivered a 5.6% increase in total

volumes, with private label volumes 7.0% higher. A further

acceleration in the latter part of the second half of the

financial year saw final quarter volume growth of 12.7%.

The overall market in Europe saw further gains for private

label with volume share up 2.5% to 33.1%, fuelled by

clear switching by consumers and retailers in light of

cost-of-living challenges. At a category level, dishwash saw

the biggest growth in volumes, up 5.0%, with laundry up

2.0% and cleaners flat.

CEO’s report

Strong performance recovery

through 2023, with increasing

momentum, positions McBride for

long-term, sustainable growth.

Chris Smith

Chief Executive Officer

(1) Please refer to APM in note 2.

Strategic report

21 McBride plc Annual Report and Accounts 2023

Volume growth continued

McBride saw volume growth significantly ahead of the

market across the three categories, with dishwash volumes

standing out at 13.0% higher in the year. This performance

ahead of market is a result of a combination of factors: the

increasing focus and specialism embedded in the divisional

teams together with the Group wide focus on customer

service excellence and product quality leading to more

contract wins from customer confidence in McBride as their

trusted and preferred supplier.

Divisional portfolio performance

All divisions reported bottom line improvement with

Liquids, Unit Dosing and Aerosols returning to profitability.

While Powders reported an overall loss for the year due

to cost increases in key raw materials in the first half, the

division recovered well and returned to profitability in the

final quarter. This represents an excellent performance for

the Group and highlights both the underlying strength of

the business, its teams and the significant opportunity for

growth.

Liquids, our largest division, increased revenue by 27.3%

on a constant currency basis, from £391.2 million to

£497.9million, with volumes rising by 5.0%. Within this,

private label sales volumes increased by 6.0%, which

compared favourably with the overall volume growth of

2.8% seen in the five key private label markets in Europe.

A number of new contract wins and a strong performance

in France and Germany were the key contributors to the

growth in Liquids. Strong cost control, especially in the

factories, efficiencies in logistics and improving margin

levels through the year enabled the division to deliver a

step up in adjusted operating profit to £10.5 million (2022:

adjusted operating loss of £15.9m).

Unit Dosing delivered revenue growth of 33.9% on a

constant currency basis at £234.2 million, with adjusted

operating profit of £10.0 million, up from a loss of £0.8

million last year. All of the division’s product lines saw

positive volume growth in the year, totalling a 7.2% increase

overall, with private label up 13.2% across the year. Both

laundry and dishwash categories performed well with

particularly strong growth in Germany.

Powders delivered a highly creditable performance given

the unexpected materials cost spike it experienced relating

to various chemicals used mostly in powdered products in

the first half of the year. The team reacted quickly to adjust

pricing and as a result recovered margins well in the second

half. The team has continued to win new business both in

contract manufacturing and private label and are well set

for good volumes into the new financial year. Revenue was

22.7% higher on a constant currency basis at £85.9million,

while the adjusted operating loss improved by £1.8 million

to £(0.7) million. The team reacted quickly to adjust pricing

and as a result recovered margins well in the second

half. Another strong performer in the year was Aerosols,

which delivered a 40.8% increase in revenue on a constant

currency basis, half of which was from volume growth

andhalf from revised pricing levels.

CEO’s report continued

Adjusted operating profit

(1)

of £0.3 million represented

an increase of £1.8 million year-on-year and resulted in

an adjusted operating profit margin

(1)

of 0.6% versus the

prior year adjusted operating loss margin of 4.6%. This

growth was driven by higher private label sales and some

impressive new contract wins. The division continues to

pursue its core strategy of supplying niche products to a

limited range of markets, while identifying opportunities

fortargeted geographical expansion.

Revenue in our Asia Pacific region rose by 6.9% on a

constant currency basis to £24.8 million and the division

delivered adjusted operating profit of £1.1 million, a 57.1%

increase on the prior year. The trends seen elsewhere in

terms of increased demand for private label products is

also strengthening in Asia Pacific and the division remains

focused on building its presence in household products

alongside its strong position in personal care.

Corporate costs were £7.7 million (2022: £4.5m), driven

byinflationary impacts and higher bonus provisions.

Revenue

2023

£m

2022

£m

Reported

change

Constant

currency

change

(2)

Liquids 497.9 383.9 29.7% 27.3%

Unit Dosing 234.2 171.5 36.6% 33.9%

Powders 85.9 68.6 25.2% 22.7%

Aerosols 46.2 31.9 44.8% 40.8%

Asia Pacific 24.8 22.4 10.7% 6.9%

Group 889.0 678.3 31.1% 28.4%

Adjusted operating profit/(loss)

(1)

2023

£m

2022

£m

Reported

change

£m

Constant

currency

change

£m

(2)

Liquids 10.5 (15.9) 26.4 26.8

Unit Dosing 10.0 (0.8) 10.8 10.9

Powders (0.7) (2.5) 1.8 1.4

Aerosols 0.3 (1.5) 1.8 1.9

Asia Pacific 1.1 0.7 0.4 0.4

Corporate (7.7) (4.5) (3.2) (3.0)

Group 13.5 (24.5) 38.0 38.4

(1) Please refer to APM in note 2.

(2) Comparatives translated at financial year 2023 exchange rates.

Strategic report

22 McBride plc Annual Report and Accounts 2023

Strategic progress

While the volatile macroeconomic environment forced the

business to focus on the short term in the years following

the 2021 strategy reset, the Board is confi dent that our

Compass strategy remains as relevant and compelling as

it did when it was fi rst announced. The business has made

signifi cant progress in the year to 30 June 2023, putting in

place many of the processes and plans that will set us on

the path to long-term, sustainable growth.

The Board and senior leadership teams have continued

to undertake a thorough review of Group and divisional

strategies each year, and we maintain our commitment to

delivering on our plans. To that eff ect, we have continued

to see strong growth in two key areas of strategic focus

with private label volumes in our key German market up

9.8%, and in our key laundry category volumes grew 6.5%,

signifi cantly ahead of the total market growth level.

Importantly, we are committed to delivering all

programmes set out in our Transformation agenda. We

have made a substantial investment, including creating a

standalone team to ensure each programme is adequately

resourced and we continue to target £50 million of

benefi ts over fi ve years. In particular, the progression of

our SAP programme, in combination with the Commercial

Excellence and Service Excellence programmes, will be key

factors in diff erentiating McBride in the market, improving

business momentum and generating shareholder value.

CEO’s report continued

Sustainability

McBride remains committed to playing its part in the path

to Net Zero and acting in a responsible manner across its

operations. In 2023, we established our targets for our

Scope 1 and 2 emissions, whereby we will reduce these

emissions by 55% by 2033. We expect to fi nalise our Scope

3 targets by the end of December2023.

We also launched a range of ESG innovations, both

in pursuit of our Net Zero agenda and to help our

customers and consumers with their environmental

ambitions. Initiatives include the launch of Elopak (liquids

in cardboard cartons), laundry capsules in child-safe

cardboard cartons, concentrated formats for laundry

powder and certain liquid cleaners and the introduction

ofa cardboard cap for our aerosol products.

Current trading and outlook

The fi rst two months of the new fi nancial year have

seen the momentum of last year’s second half continue.

However, our teams remain vigilant to safeguard the

business from short-term challenges arising from a still

volatile macro environment and we will continue to focus

on reducing debt and maintaining tight control of costs.

We enter the 2024 fi nancial year with improving

confi dence about the future. Our performance

improvement momentum, the work done to pursue

our Compass strategies, the gathering pace of our

Transformation agenda and our leadership positions across

many of our markets and categories mean McBride is well

placed to deliver sustainable, profi table growth over the

longer term.

Chris Smith

Chief Executive Offi cer

18 September 2023

Liquids products

Bagnatica

Strategic report

23 McBride plc Annual Report and Accounts 2023

666.5m

litres sold

Adjusted

ROCE

(1)

9.1%

2022: (13.0)%

Adjusted

operating profi t/(loss)

(1)

£10.5m

2022: £(15.9)m

Revenue

£497.9m

2022: £383.9m

Liquids delivered double-digit revenue growth,

with a signifi cant increase in profi tability driven

by volumes, pricing, improved service levels and

cost reduction actions.

Peter Ingelse

Managing Director Liquids

Our divisions

Performance review

Liquids revenue grew by 27.3% on a constant currency

basis

(2)

, £391.2 million to £497.9 million, driven by volume

growth of 5.0% and selling price increases in response to

continued infl ationary pressures.

Private label sales volumes increased by 6.0%. This private

label performance compared favourably with the overall

volumes seen in the fi ve key private label markets in Europe,

which grew by 2.8%. Market outperformance was driven by

new contract wins and improving customer service.

In the fourth quarter, there was increased demand for

private label products, particularly in France, in response

to pressures on disposable incomes. This resulted in

consumers switching from branded products to private

label items. Until the fourth quarter, this had been more

than off set by the overall decline in consumer demand.

Conversely, volumes sold to contract manufacturing

customers were down 16.6% as branded product lines

werehit by the market shift to private label.

Volumes of private label dishwash products grew by

12.9%, driven by a contract win in the UK and the division

outperforming the fi ve largest private label markets in

Europe, which grew by 7.6%.

Volumes of private label laundry products grew by 6.2%,

with key contract wins in Spain and Germany, again

signifi cantly outperforming the key markets in Europe.

Volumes of private label cleaner products increased by

1.8%, which represented a positive performance compared

to growth in the market as a whole, which was fl at

year-on-year.

The division delivered an adjusted operating profi t of

£10.5million, which was £26.8 million higher than the

prioryear on a constant currency basis.

(1) Please refer to APM in note 2.

(2) Comparatives translated at fi nancial year 2023 exchange rates.

Strategic report

24 McBride plc Annual Report and Accounts 2023

Our divisions

Performance review continued

Service levels improved throughout the year, with

improvements made in the division’s factories and across

the broader supply chain. These improvements in service

resulted in lower customer penalties and helped deliver

year-on-year growth.

Good progress was made with committed Compass cost

reduction actions, while factory effi ciencies were also

improved through the rollout of Lean manufacturing

methodology across the division.

For the second year, the division achieved net contract

wins, particularly in the German market, which is expected

to impact volumes positively over the next fi nancial year.

Q&A with Peter Ingelse

How did you manage the ongoing

infl ation pressure during the year?

Our fi rst objective was to focus on

reducing our own cost base and

optimising our effi ciencies, in order to

compensate as much as possible for

the rising input costs of energy, labour,

logistics and raw materials. However the

level of infl ation seen in the fi rst half,

which continued from the prior year, was

so high that we had to increase prices to

our customers. On the whole, customers

were receptive and understood the need

to implement these changes.

Whilst some raw material prices have

stabilised, infl ation remains a challenge, in

particular for labour and logistics, and we

are also contending with the impacts of

higher interest rates.

How is the push towards Net Zero

and the increasing importance

of sustainability infl uencing your

business?

Off ering customers innovative and

sustainable products is one of the

cornerstones of our business strategy.

During the year we launched a range

ofproducts in carton packaging, enabling

the use of millions of plastic bottles to

be avoided; this represents a much more

sustainable solution for environmentally

conscious customers.

We also created a range of cleaner

products in concentrated pack sizes,

thereby enabling consumers to refi ll

primary packaging, further saving

plastic and avoiding the need to ship

unnecessary water around the network.

Being sustainable in cleaning is critical

for McBride and our customers to grow

together.

Liquids site

eper

Strategic report

25 McBride plc Annual Report and Accounts 2023

Unit Dosing returned to profi tability on the

back of strong revenue growth, with increased

volumes across Europe, strategic price increases

and tight cost control underpinning the

division’s positive performance.

Lennard Markestein

Managing Director Unit Dosing

526.9m

laundry pods sold

Revenue

£234.2m

2022: £171.5m

Adjusted

operating profi t/(loss)

(1)

£10.0m

2022: £(0.8)m

Adjusted

ROCE

(1)

16.0%

2022: (1.2)%

Performance review

Revenue was up by 33.9% to £234.2 million on a constant

currency basis

(2)

, with the division recording adjusted

operating profi t of £10.0 million (2022: operating loss of

£0.8m), resulting in an adjusted operating profi t margin of

4.3% (2022: adjusted operating loss margin of 0.5%).

After delivering a revenue increase of 35.1% in the fi rst half

of the fi nancial year, the division grew 32.7% in the second

half, driven by selling price increases, new contract wins and

improved rates of sale of private label products. Volumes in

contract manufacturing declined by 18.5%.

All of the division’s product lines saw positive volume growth in

2023, which represents a signifi cant achievement. The division

grew in four of the fi ve largest economies in Europe (UK,

Germany, France and Spain), with a marginal volume decline

in Italy. New product off erings – such as the new ‘click to lock’

box and capsule shapes – have been selected by multiple

customers and are growing rapidly, illustrating how McBride is

innovating to improve delivery and create value.

Adjusted operating profi t improved by £10.8 million, driven by

multiple factors. Continued price increases to recover infl ation

played a key role in the fi rst half, while eff orts to develop next

generation lower cost products across all our categories had

an increasing impact as the year progressed. Volume growth

allowed the division to leverage its factories, which resulted

in an increase in its direct labour productivity of over 7%.

Strategic staffi ng policies and tight cost controls helped to

off set labour and service cost increases, ensuring overheads

only increased by 13%, despite signifi cant increases in labour

and energy infl ation. Overall, the division has taken a major

step forward in improving its competitiveness and positioning

itself for long-term growth.

Our divisions

(1) Please refer to APM in note 2.

(2) Comparatives translated at fi nancial year 2023 exchange rates.

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26 McBride plc Annual Report and Accounts 2023

Strategic report

Unit Dosing manufacturing

Foetz

Your Compass strategy called for

product leadership. How is the

cost of living crisis aﬀ ecting this

strategy?

The priorities and targets of our Compass

strategy remain the right ones, although

it is fair to say that the areas of emphasis

have changed. For example, we have

allocated more innovation resource to

the development of lower cost product

options on the back of increased

demand from consumers. Our fi nancial

performance deteriorated in 2022 and the

fi rst half of the past year, and as a result

we prioritised our investments in new

capacity and capabilities. That said, I feel

very positive about the progress we have

made in the last twelve months and we

can look to the next year with confi dence.

Our off erings for compacted products,

sustainable packaging and emerging

categories have greatly expanded and we

have clear plans to strengthen our range.

For us it really boils down to smartly

allocating our resources and focusing

relentlessly on execution.

Contract manufacturing volumes

have declined in the past two years.

How do you see the path forward?

Contract manufacturing is very important

for the Unit Dosing division. Our relations

with our contract manufacturing

customers are strategic and together we

innovate and co-invest. Our volumes have

indeed declined; in 2022 due to changing

consumer habits and the consequent

reduction in temporary Covid-19 overfl ow

volumes. On top of that, in the year some

of our customers experienced slower

sales rates for their products. Looking

ahead to the next twelve months, we will

launch multiple new products spread over

dishwash and laundry and we expect sales

run-rate on existing contracts to bounce

back as well.

Q&A with Lennard Markestein

Our divisions

Performance review continued

After two and a half years of the divisional structure, the team

is now fully embedded in the industry and has developed

industry-leading insights in terms of anticipating market

developments, customer needs and competitive activity.

Theteam is resilient and increasingly entrepreneurial,

whilethe Group-wide Transformation initiatives will help

thedivision accelerate its progress further.

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27 McBride plc Annual Report and Accounts 2023

Strategic report

Proactive and decisive action enabled Powders

to largely off set volatile and often immediate

price increases in materials, leading to the

division achieving break-even in the fourth

quarter of the fi scal year.

Marielle Claudon

Managing Director Powders

Adjusted

ROCE

(1)

2.4%

2022: (11.5)%

Adjusted

operating loss

(1)

£(0.7)m

2022: £(2.5)m

Revenue

£85.9m

2022: £68.6m

Our divisions

(1) Please refer to APM in note 2.

(2) Comparatives translated at fi nancial year 2023 exchange rates.

Performance review

Revenue in Powders at £85.9 million was 22.7% higher on

a constant currency basis

(2)

while the adjusted operating

loss reduced by £1.8 million to £(0.7) million. Ongoing cost

mitigation actions and volume growth in the fi nal quarter

provided the foundations to returning the business to

break-even in the near term.

The division has seen volatile and, at times, immediate price

increases for various key raw materials throughout the year.

Despite the strong selling price increases, given the

magnitude of the infl ationary pressures experienced in

theyear, it was not possible to off set cost increases fully.

Additionally, the higher selling prices of the category

damaged its competitiveness versus other types of formats,

such as Liquids and Unit Dosing products. This caused a

reduction in powder product demand in most markets, both

across private label and contract manufacturing.

The total laundry powder market declined in volume

by 3.7%, although private label grew by 1.5%. The same

dynamics were seen in auto dishwash powder with a total

market volume decline of 4.6% but with private label

gaining market share in certain geographic areas. However,

the tabs format fell off signifi cantly, seeing a 31.4% decline

inprivate label volume.

For the laundry powder category, McBride generally

benefi ted from the switch from brands to private label in

most of the key European markets and gained signifi cant

new volumes in contract manufacturing. However, auto

dishwash category sales suff ered due to some contract

losses and a lack of growth in France and Italy.

64,150

tonnes produced

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28 McBride plc Annual Report and Accounts 2023

Strategic report

Powders manufacturing

Holstebro

What are the priorities for the

Powdersdivision going forward?

As with last year, the focus of the

business is to recover and/or off set

the infl ationary pressures we currently

face. Thecommercial teams continue

to actively engage with our customers

to mitigate the issues through price

management andrevised product

off erings.

We are starting a study to ‘Reignite

Powders’ by gathering insights from

our end consumers in order to better

understand their opinions of Powders

products and why they currently buy

(or do not buy) them. We intend to use

the fi ndings to review and update our

Powders strategy and will also share the

information with our direct customers.

Lastly, we want to transform our

manufacturing sites into operational

centres of excellence able to off er

the best solutions to our private label

and contract manufacturing customer

bases, and we want to make the most

of our manufacturing capabilities and

technologies (fl uid bed and spray tower).

What trends do you see for the

Powdersdivision?

Maintaining volumes remains a

key challenge for the division in a

declining market with shifting usage.

Wenevertheless stay very confi dent in our

ability to further grow the business while

capturing branders’ share as they are not

investing in the category anymore, either

through private label gains or contract

manufacturing. We strongly believe there is

a future for powder detergent as it remains

the most sustainable off er in the detergent

portfolio. We are aware that new trends for

Powder-based products are appearing on

the market so we are constantly assessing

how we can transform and expand our

off ering to deliver greater value.

Q&A with Marielle Claudon

Our divisions

Performance review continued

As a result of the implementation of cost-saving initiatives

throughout the year and the benefi ts of increased selling

prices, profi t recovered in the last quarter. However, this did

not off set the losses incurred during the fi rst three quarters

and prevented the division from achieving its break-even

target.

During the year, the division worked relentlessly to deliver

award-winning products in its fi ve key markets, building

on its strong R&D strategy and establishing the Powders

division as the ‘go-to’ manufacturer in the market.

Strategic report

29 McBride plc Annual Report and Accounts 2023

Strategic report

68.2m

units produced

Signifi cant increases in demand for all three

product categories led to exceptionally strong

revenue growth, with the implementation of

targeted price increases enabling the division to

return to profi tability.

Marc Marot

Business Unit Director Aerosols

Adjusted

ROCE

(1)

2.7%

2022: (13.1)%

Adjusted

operating profi t/(loss)

(1)

£0.3m

2022: £(1.5)m

Revenue

£46.2m

2022: £31.9m

Our divisions

(1) Please refer to APM in note 2.

(2) Comparatives translated at fi nancial year 2023 exchange rates.

Performance review

Aerosols revenue of £46.2 million was 40.8% higher in

the year on a constant currency basis

(2)

, while adjusted

operating profi t of £0.3 million was up £1.9 million at

constant currency

(2)

. This resulted in an adjusted operating

profi t margin

(1)

of 0.6% (2022: adjusted operating loss

margin of 4.6%).

Following strong revenue growth of 33.4% in the fi rst half,

when the division delivered an adjusted operating profi t

at break-even, the second half saw sales increase by 48.1%

across all core categories. The implementation of price

increases partially off set exceptional increases in raw

material, packaging and logistics cost increases. Material

prices appear to be plateauing at the high level seen since

the fourth quarter.

Of the division’s three main product categories, both

household and personal care saw a signifi cant increase

indemand in the year, while insecticides grew slightly.

This growth was driven by higher private label sales,

largely due to increasing underlying demand and new

contract wins, in addition to increased selling prices.

Supply chain agility and strong cost controls reinforced

Aerosols’ strong reputation with customers and were key

factors in capturing new business in both private label and

contract manufacturing.

The Aerosols division continues to pursue its strategy of

supplying niche products to a limited range of markets,

while pursuing targeted geographical expansion. The

division is keenly focused on meeting customers’ needs

in the most cost-eff ective way. This approach has already

secured new contract wins that launched in the third

quarter, with others planned for the next fi nancial year,

continuing the positive growth momentum experienced

through 2023.

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30 McBride plc Annual Report and Accounts 2023

Strategic report

Aerosols site

Rosporden

What are the challenges?

There are a variety of challenges coming

our way as an industry; for the year ahead

supply chain disruptions will continue to

have repercussions, and supply times, raw

material costs and the impact of infl ation

on purchasing power will also defi ne the

coming year’s activity.

Our division is focused on implementing

reliable raw materials and components

sourcing to secure our supply chain and

stock the shelves of our customers. Our

market position and close relationships

with our customers have proven to be an

important diff erentiator for the division,

and we have successfully developed

solutions to minimise products shortages.

Consumer demand for products in the

aerosol format does not appear to be

diminishing, which the division will seek

to capitalise on by developing innovative

and sustainable solutions, while also

supporting the Group.

What will drive sales growth in the

nextfi nancialyear?

The implementation of our strategy

is delivering tangible results, even in

the diffi cult economic conditions we

have experienced over the past twelve

months. As a result, the Aerosols

division is building on category growth

opportunities within household,

personalcare and insecticides products,

in addition to pursuing regional sales

growth opportunities in Germany.

Q&A with Marc Marot

Our divisions

Strategic report

31 McBride plc Annual Report and Accounts 2023

Strategic report

16.1m

litres produced

Strong fi rst half revenue performance off set

a challenging second half, with a disciplined

approach to cost control ensuring the division

could tackle infl ationary pressures and increase

operating profi t.

Teong Dee Ong

Business Unit Director Asia Pacifi c

Adjusted

ROCE

(1)

11.6%

2022: 5.7%

Adjusted

operating profi t

(1)

£1.1m

2022: £0.7m

Revenue

£24.8m

2022: £22.4m

Our divisions

(1) Please refer to APM in note 2.

(2) Comparatives translated at fi nancial year 2023 exchange rates.

Performance review

Revenue grew 6.9% on a constant currency basis

(2)

£24.8 million, with adjusted operating profi t growing to

£1.1 million, representing a 57.1% increase. This resulted

in an adjusted operating profi t margin

(1)

of 4.4%, which

was achieved via a disciplined approach to overhead

costcontrol across the division as a means to combat

thegeneral infl ationary pressures seen across the region.

Revenue in the fi rst six months of the year grew by

18.9% but decreased by 4.2% in the second half of the

year. This reduction was primarily due to the partial

loss of a contractwith a major customer that operates

across multiple countries in the South East Asia region.

Nevertheless, new contracts secured and launched in

the fourth quarter will more than mitigate this loss going

forward, and are expected to generate positive sales

growth momentum going into the next fi nancial year.

Demand for private label products is strong as consumers

increasingly turn towards better value products without

compromising on performance. In Australia, private

label contracts with a major customer were successfully

extended. In Malaysia, key customers have been strongly

promoting their private label personal care off ering,

resulting in signifi cant sales growth.

Strategic report

32 McBride plc Annual Report and Accounts 2023

Strategic report

Asia Pacifi c manufacturing

Malaysia

With respect to the current manufacturing facilities in Malaysia

and Vietnam, what actions have been taken so far to achieve the

division’s cost and value leadership strategy?

Both of our sites are now co-ordinated by the Operations Director based

in Malaysia. As a result, our operations teams at both sites now work with a

continuous improvement mindset and culture. One of the clear benefi ts has

been the generation of effi ciency gains on existing lines while undergoing

stringent overhead cost controls – a consequence of this has been more

competitive manufacturing costs. We are now looking at further leveraging

our Group purchasing power to improve our procurement of raw materials.

Since moving into the new facility in Malaysia in 2021, volumes have grown

and we have leveraged better economies of scale to off set the infl ationary

pressures encountered in the year. Good progress is being made in getting

new cost-effi cient household production lines running, which will be

complemented by investments into in-house performance testing capabilities.

Meanwhile, we have also put in a place a new structure which focuses

on innovation and technical capability improvements, which are strongly

supported by our Group R&D sector specialists. This will enable us to

focus on meeting customers’ needs by off ering new products in the

most cost-eff ective way possible. In addition, we continue to strengthen

our quality assurance systems; we received the ISO 22716 accreditation

in Malaysia at the end of last year, and eff orts are in place to achieve

ISO9001and ISO 14001 accreditations by end of this year.

What are the key commercial priorities in the division’s growth

agenda for the next fi nancial year?

Over the past year, we have been reinforcing and building stronger sales

and account management capabilities. There are three priorities that the

commercial team will be focusing on as we head into the 2024 fi nancial

year. Firstly, we will protect and expand our existing customer base with

a focus on securing closer relationships with our valued customers to

ensure best-in-class service levels and to help them grow their business

through innovative product off erings. Secondly, the team will be focusing

on aggressive business development activities to attract and secure new

customers, especially in contract manufacturing. Thirdly, as we scale up our

technical and manufacturing capabilities in the household category, we will

be in a stronger position to compete more eff ectively for household business

in private label as well as seeking contract manufacturing opportunities.

Q&A with Teong Dee Ong

Our divisions

33 McBride plc Annual Report and Accounts 2023

Strategic report

Group operating results

Operating profit from continuing operations of

£10.3million was a significant improvement on the prior

year (2022: loss of £26.7m). Adjusted operating profit

(1)

of £13.5million was also significantly better than the prior

year (2022: loss of £24.5m) whilst the adjusted operating

profit margin

(1)

increased from (3.6)% to 1.5%.

The Group returned to profitability as the time lag between

the exceptional levels of input cost inflation hitting the

business and the mitigating actions being agreed with our

customers unwound. In particular, in the second half of

the year, we saw encouraging sales momentum across the

Group, underpinned by improved customer service levels,

new contract wins and increased consumer demand for

great-value, high-quality private label products.

Group EBITDA

Adjusted EBITDA

(1)

of £34.1million (2022: £(3.6)m) reflected

the strong trading performance.

2023

£m

2022

£m

Operating profit/(loss) 10.3 (27.1)

Add back: operating loss from

discontinued operations — 0.4

Operating profit/(loss) from

continuing operations 10.3 (26.7)

Exceptional items in

operatingprofit/(loss) 0.8 (0.4)

Amortisation of intangibles 2.4 2.6

Adjusted operating profit/

(loss) from continuing

operations

(1)

13.5 (24.5)

Depreciation of property,

plant and equipment 16.8 16.9

Depreciation of right-of-use

assets 3.8 4.0

Adjusted EBITDA

(1)

34.1 (3.6)

Exceptional items

Total exceptional items of £13.0 million were recorded

during the year in relation to continuing operations

(2022:£3.1m). The charges primarily comprised the

following:

• £12.2 million in respect of the independent business

review and refinancing costs recognised in finance

costs, including a £1.5million charge in respect of the

valuation of the upside sharing fee payable to members

of the lender group upon exiting the existing revolving

credit facility (RCF) agreement; and

• £0.8 million costs relating to the re-evaluation of an

environmental remediation provision.

Finance costs

At £13.2million, adjusted finance costs were £8.1million

higher than the prior year (2022: £5.1m), driven by

revised terms under the lending agreement announced

on 29September 2022 and increases to the underlying

market interest rates.

Loss before tax and taxation

Reported loss before taxation from continuing operations

was £15.1 million (2022: loss of £35.3m). Adjustedprofit

before taxation

(1)

from continuing operations was

£0.3 million (2022: loss of £29.6m). The tax charge on

continuing adjusted profit before tax

(1)

for the year is

£0.3million (2022: £9.3m credit) and the effective tax

rateis 100% (2022: 31%).

The statutory effective tax rate on continuing operations

for the year is 24% (2022: 32%).

The Group operates across a number of jurisdictions and

tax risk can arise in relation to the pricing of cross-border

transactions, where a taxation authority’s interpretation of

the arm’s length principle can diverge from the approach

taken by the Group.

CFO’s report

It is pleasing to report a successful

turnaround in profitability, driven

by the margin recovery actions

agreed with our customers

and volume growth driven by

improved customer service levels,

new contract wins and increased

consumer demand for great value,

high quality private label products.

Mark Strickland

Chief Financial Officer

(1) Please refer to APM in note 2.

Strategic report

34 McBride plc Annual Report and Accounts 2023

Loss per share

On an adjusted basis, diluted loss per share

(1)

from

continuing operations was 0.0 pence (2022: loss of 11.7p).

Total adjusted diluted loss per share

(1)

was 0.0 pence

(2022: loss of 11.7p), with basic loss per share at 6.6 pence

(2022: loss of14.0p).

Payments to shareholders

Under the terms of the amended RCF announced on

29September 2022, the Company may not, except with

the consent of its lender group, declare, make or pay any

dividend or distribution to its shareholders prior to an ‘exit

event’, being a change of control, refinancing of the RCF

in full, prepayment and cancellation of the RCF in full, or

upon the termination date of the RCF, being May 2026.

Hence the Board is not recommending a final dividend for

the financial year ended30 June 2023.

Cash flow and balance sheet

Free cash flow

(1)

2023

£m

2022

£m

Adjusted EBITDA

(1)

34.1 (3.6)

Working capital excluding

provisions and pensions 7.1 (15.3)

Share-based payments 0.5 —

Loss on disposal of fixed

assets 0.3 0.3

Non-exceptional reversal

ofimpairment of property,

plant and equipment — (0.1)

Pension deficit reduction

contributions (4.0) (4.0)

Free cash flow

(1)

38.0 (22.7)

Exceptional items (1.4) (4.1)

Interest on borrowings and

lease liabilities less interest

receivable (11.4) (3.3)

Refinancing costs paid (12.3) (1.8)

Tax paid (1.8) (0.1)

Net cash generated from/

(used in) operating activities 11.1 (32.0)

Net capital expenditure

(2)

(16.3) (13.2)

Debt financing activities 2.6 24.7

Settlement of derivatives 0.4 0.4

Free cash flow to equity

(3)

(2.2) (20.1)

Dividends paid/redemption

of B Shares — (0.1)

Share buy-back — (0.1)

Net decrease in cash

andcash equivalents (2.2) (20.3)

Free cash flow

(1)

was £38.0 million (2022: (£22.7)m) in the

year to 30 June 2023.

Working capital inflows increased compared to the prior

year primarily due to a reduction in customer payment

terms, partially offset by an increase in the value of

inventories due to higher input costs.

During the year, net capital expenditure

(2)

was £16.3 million

(2022: £13.2m) in cash terms. The ongoing reduction in

gross capital expenditure levels resulted from careful

management of cash flows to mitigate increases in net

debt. The Group continues to prioritise capital expenditure

to underpin our strategy of focused investment in our

growth categories.

The Group’s net assets decreased to £37.1 million

(2022:£57.0m). Gearing

(4)

decreased slightly to 78%

(30June 2022: 80%) as net debt levels remained broadly

in line with the prior year end. Adjusted ROCE

(1)

of 6.4%

was higher than the prior year (2022: (11.4)%) driven by a

return to operating profitability.

Bank facilities and net debt

(1)

Net debt

(1)

at 30 June 2023 increased marginally to

£166.5million (30 June 2022: £164.4m).

Throughout the year the Group had a €175 million

multi-currency, sustainability-linked RCF. The facility was

agreed for a five-year tenor to May 2026 and is provided

by a syndicate of supportive international bank lenders.

On 29 September 2022, the Group announced that it had

agreed an amended RCF with its lender group, maintaining

the commitment date to May 2026 and ensuring the Group

has sufficient levels of liquidity headroom and can comply

with revised covenant requirements. Key provisions of

the agreement are detailed in note 20 to the financial

statements.

The Group considers that the amended RCF arrangement

achieves an appropriate balance between the interests of

all stakeholders of the Group. In particular, we have been

in regular discussion and consultation with the Trustee of

the Group’s defined benefit pension scheme in the UK. In

order to preserve and support the position of the scheme,

with the support of the lender group, we agreed to provide

in favour of the scheme a package of additional credit

support in the UK, as well as a new information sharing

protocol to ensure ongoing communication between the

Group and the Trustee remains comprehensive.

CFO’s report continued

(1) Please refer to APM in note 2.

(2) Net capital expenditure is capital expenditure including capital

payments on lease liabilities less proceeds from sale of fixed

assets.

(3) Free cash flow to equity excludes cash flows relating to

transactions with shareholders.

(4) Gearing represents net debt divided by the average of current

andprior year year-end capital.

Strategic report

35 McBride plc Annual Report and Accounts 2023

Bank facilities and net debt

(1)

continued

At 30 June 2023, liquidity

(1)

as defined by the RCF

agreement was £59.3 million (2022: £70.6m). Liquidity

throughout the year was comfortably above the minimum

liquidity covenant of £15 million.

At 30 June 2023, the net debt cover ratio as defined under

the RCF funding arrangements was 2.9x (2022: (93.3)x)

and the interest cover was 2.7x (2022: (0.2)x). The amount

undrawn on the facility was €46.7 million (2022: €64.5m).

Under the current agreement, net debt cover and

interest cover covenants are to be tested quarterly from

30September 2024.

The RCF, which is aligned with the Loan Market

Association’s ‘Sustainability Linked Loan Principles’,

incorporates three sustainability performance targets

which are central to McBride plc’s commitment to

maintaining a responsible business and contributing

actively to a more sustainable future:

1. Renewable energy: McBride plc strives to reduce its

environmental impact by increasing the percentage of

energy from renewable sources from 5.9% in 2020 to

70.0% in 2026. During this financial year, 58.6% of the

Group’s energy came from renewable sources, beating

the target of 30.0% by 30 June 2023.

2. Recycled content: Plastics are a significant element in

many of the final products of McBride. The Company

targets to increase significantly the post-consumer

recycled (PCR) content of polyethylene terephthalate

(PET) plastic packaging sourced for manufacturing

its products, from 64.0% in 2020 to 94.0% in 2026.

During this financial year, 98.2% of PET bought had

PCRcontent, exceeding the target of 79.0%.

3. Responsible sourcing: McBride plc targets the sourcing

of all paper and card components responsibly via FSC®

approved suppliers, with the percentage of virgin carton

sourced from FSC® approved suppliers increasing from

50.0% in 2020 to100.0% in 2026. By 30 June 2022, the

percentage of skillets sourced that are FSC® certified

was 55.6%, below the target of 65.0% by 30June2023.

The decrease in the use of FSC® sourced board is due to

product mix and transition impacts. McBride continues

to focus on improving our recyclability via product

design and working closely with our customers.

Successful achievement of all three annual targets will

result in a reduction of 0.05% of the margin of the facility.

At 30 June 2023, the Group had a number of facilities

whereby it could borrow against certain of its trade

receivables. In the UK, the Group had a £20 million facility,

committed until September 2024. In France and Belgium,

the Group had an aggregate €30 million facility, which had

a rolling notice period of six months for the French part and

three months for the Belgian part, both committed until

September 2024. In Germany, the Group had a €40 million

facility, committed until September 2024. In Spain, the

Group had an €8 million facility, committed until May2026.

Since the year end, the Group has agreed extension of all

invoice discounting facilities to May 2026. The Group can

borrow from the provider of the relevant facility up to the

lower of the facility limit and the value of the respective

receivables.

The Group’s confirmed financing, improved trading

performance and more positive three-year financial

forecasthas meant that there is no longer a material

uncertainty that would cast significant doubt on the

Group’s ability to continue as a going concern, even when

modelling severe but plausible downside risks. TheBoard

anticipates that the financial turnaround will allow the Group

to improve liquidity and cash flows further. Inparticular,

it is expected that having a clean auditors’ report will

facilitate the agreement of an invoice discounting line on

our unencumbered Italian debtor ledger and allow credit

insurers to increase levels of insurance cover to our suppliers

back to more normal levels.

Pensions

In the UK, the Group operates a defined benefit pension

scheme, which is closed to new members and to future

accrual.

A cash flow driven investment (CDI) strategy was

implemented during the first half of the financial year to

30 June 2020. Using credit/bond investments, the CDI

strategy delivered a stable, more certain expected return

and reduced volatility. The strategy previously targeted a

c.100% hedge of interest rates and inflation.

As a result of the government bond crisis in 2022 and

the resultant changes in liability driven investing (LDI)

managers’ collateral requirements, the Trustee amended

the strategy in October 2022 and as an interim step moved

to an unlevered government bond based hedge with c.40%

of interest rate and inflation hedging.

The investment strategy is currently being reviewed and

hedging is due to be increased to c.60% of interest rates

and inflation. This level of hedging broadly hedges the

current funding level of the Fund and strikes a balance

between risk and return objectives and the liquidity needs

of the Fund.

A significant increase in corporate bond yields has

decreased the value of the liabilities and the assets over

the year to 30 June 2023. At 30 June 2023, the Group

recognised a deficit in the scheme of £24.7 million

(30June2022: £14.4m). The increase in deficit is due

to recent high inflation impacting pension liabilities at

30June2023 by more than had been assumed within

long-term inflation assumptions.

Following the triennial valuation at 31 March 2021, the

Company and Trustee agreed a new deficit reduction plan

based on the scheme funding deficit of £48.4 million.

Thecurrent level of deficit contributions of £4.0million

perannum is payable until 31 March 2028. The Company

has separately agreed that, from 1 October 2024,

conditional profit-related contributions of £1.7 million

per annum will be paid over the period to 31 March 2028.

Ifadjusted operating profit exceeds £35 million, additional

annual deficit contributions of £1.7 million will be due over

the following year. If adjusted operating profit is below

£30million then no profit-related contributions will be due

the following year. If reported adjusted operating profit is

between £31 million and £35 million, a proportion of the

£1.7 million contribution will be due over the following year,

with incremental increases of £0.34 million of additional

contributions for each whole £1million of adjusted

operating profit in excess of £30million. Also, the Company

has agreed to make additional contributions such that the

total deficit contributions in any year match the value of

any dividend paid. The funding arrangements and recovery

plan will next be reviewed by the Company and Trustee as

part of the 31March 2024 valuation.

The Group has other post-employment benefit

obligations outside the UK that amounted to £1.9 million

(30June2022:£1.7m).

Mark Strickland

Chief Financial Officer

CFO’s report continued

(1) Please refer to APM in note 2.

Strategic report

36 McBride plc Annual Report and Accounts 2023

Key performance indicators Financial

Cost savings

(£m)

Adjusted EBITDA

(1)

margin

advances (%)

Free cash flow

(1)

increase

(£m)

Adjusted ROCE

(1)

improvement (%)

Definition and why

wemeasure

Cost savings achieved from the

implementation of strategy. Cost

optimisation was the backbone of

the first two years of our five-year

Compass plan. As such, we

committed to deliver annualised

costsavings of £20million by the

endof 2023.

How we’ve performed

In 2023, £17.9 million cost savings

have been achieved. Cost savings

resulted from cost of product

initiatives, warehouse optimisation

and reductions in overheads.

How it links to our strategy



Definition and why

wemeasure

The calculation of adjusted

EBITDA

(1)

, which when divided

by revenue gives this EBITDA

margin, is defined in the adjusted

measures section of note 2 to the

consolidated financial statements.

We measure adjusted EBITDA

(1)

margin to get a good view of the

underlying profitability of the

Group, having adjusted for the

impact of discontinued operations,

exceptional items, depreciation and

amortisation.

How we’ve performed

The Group returned to profitability

as the time lag between the

exceptional levels of input cost

inflation hitting the business and

the mitigating actions being agreed

with our customers unwound.

How it links to our strategy

 

Definition and why

wemeasure

Free cash flow

(1)

is an important

indicator of our overall operational

performance as it reflects the cash

we generate from operations.

Free cash flow

(1)

is defined as

cash generated from continuing

operations before exceptional items

(see note 2).

How we’ve performed

Free cash flow

(1)

increased by £60.5

million, driven predominantly by

increased adjusted EBITDA (£37.7

million) and increased working

capital inflows (£22.4million).

How it links to our strategy

 

Definition and why

wemeasure

Adjusted ROCE

(1)

is defined as

total adjusted operating profit

(1)

from continuing operations divided

by the average year-end capital

employed. Capital employed is

defined as the total of goodwill and

other intangible assets, property,

plant and equipment, right-of-use

assets, inventories, trade and other

receivables less trade and other

payables (see note 2).

Adjusted ROCE

(1)

serves as an

indicator of how efficiently

wegenerate returns from the

capital invested in the business.

It is a Group KPI that is directly

relatable to the outcome of

investment decisions.

How we’ve performed

Adjusted ROCE

(1)

has increased

from (11.4)% to 6.4%. Capital

employed has decreased to

£200.1million (2022: £218.6m).

Thekey driver of the increase in

ROCE is the growth in adjusted

operating profit

(1)

to £13.5 million

(2022: loss of £24.5m).

How it links to our strategy



(0.5)

6.7

7.0

6.6

2019

2020

2021

2022

3.8

2023

(22.7)

33.1

64.9

25.7

2019

2020

2021

2022

38.0

2023

(11.4)

11.5

12.8

13.1

2019

2020

2021

2022

6.4

2023

Revenue from continuing

operations (£m)

Definition and why

wemeasure

Revenue from the sale of our

products is measured at the

invoiced amount, net of sales

rebates, discounts, value added

taxand other sales taxes.

A key performance indicator of

commercial performance, this

marks the progress that we are

making towards our strategic

objective of growing to €1 billion

revenue.

How we’ve performed

Group revenue increased by

£210.7million (31.1%), driven by

both volume increases and pricing

actions.

How it links to our strategy

 

678.3

682.3

706.2

721.3

2019

2020

2021

2022

889.0

2023

11.6

0.5

2021

2022

17.9

2023

(1) Please refer to APM in note 2.

(2) Comparatives translated at financial year 2023 exchange rates.

Key: Market standing Operational excellence Sustainability Talent

Strategic report

37 McBride plc Annual Report and Accounts 2023

Key performance indicators Non-financial

Health and safety Customer service level

(CSL) (%)

Gender split – female

(%)

Customer quality

(%)

R&D expenditure

(£m)

Definition and why

wemeasure

We define our lost time frequency

rate as number of lost time injuries

x 100,000 divided by total number

of person-hours worked.

We measure this to track

performance against our primary

objective of ensuring that all of our

colleagues return home safe and

healthy at the end of every working

day.

How we’ve performed

Our lost time frequency rate

increased in 2023; however, is

envisaged to improve next financial

year with key objectives focused on

Group standards, risk assessment,

zero loss journey maps and leading

indicators.

How it links to our strategy



Definition and why

wemeasure

We define CSL as the volume of

products delivered in thecorrect

volumes and within requested

timescales, as a percentage of total

volumes ordered by customers.

We strive to deliver a high and

consistent CSL to allow customers

to operate their supply chains

efficiently and effectively.

How we’ve performed

Our CSLs increased in 2023,

following actions taken to address

logistical issues in Germany. While

improving, CSLs are not yet back

to historic levels as changes in

customer and consumer behaviours

have resulted in a more unstable

demand signal. We continue to

work closely with our customers

tofurther improve CSLs.

How it links to our strategy

Definition and why

wemeasure

We define gender split as the

proportion of our total workforce

that is female.

We value diversity and inclusion in

all forms, with gender split just one

measure of this. We endeavour to

promote diversity in our workplace

to enhance the success of our

business.

How we’ve performed

Our proportion of female

colleagues has remained broadly

stable in recent years

(2)

How it links to our strategy

Definition and why

wemeasure

We measure customer quality using

a customer satisfaction index which

combines critical issues, audit

results, returns and complaints.

How we’ve performed

The fall in the customer

satisfactionindex in 2023 resulted

from the negative impact of

some microbiology issues and

a higher-than-expected level of

returns. Improving quality is a

strategic focus, with specific action

plans in place to drive improvement

in microbiology and customer

returns.

How it links to our strategy



Definition and why

wemeasure

Total R&D expenditure for the

Group is measured to ensure that

we are investing at the required

levels in order to meet our product

innovation and sustainability

objectives.

How we’ve performed

Our R&D expenditure has increased

in 2023 as a result of ongoing

work to develop new product

offerings and packaging options

forcustomers.

How it links to our strategy



0.48

0.80

0.67

0.87

2019

2020

2021

2022

0.88

2023

85.4

90.8

94.6

2019

2020

2021

2022

87.4

2023

38.5

38.6

38.5

38.4

2019

2020

2021

2022

38.2

2023

97.0

97.5

95.0

2019

2020

2021

2022

92.0

2023

8.3

6.9

6.8

7.1

2019

2020

2021

2022

8.9

2023

(1) Please refer to APM in note 2.

(2) Includes employees, third-party contractors, consultants and agency workers.

Key: Market standing Operational excellence Sustainability Talent

Strategic report

38 McBride plc Annual Report and Accounts 2023

Our stakeholders Section 172(1) statement

How we engage and

foster strong relationships

withsomeofour key

stakeholders.

The Directors are fully aware of their responsibilities to

promote the success of the Group in accordance with

section 172 of the Companies Act 2006 (‘the 2006 Act’).

The Board considers it has acted in good faith and made

decisions which promote the long-term success of the

Group for the benefi t of its shareholders and its people.

In doing so, it considered the interests of stakeholders

impacted by the business as well as its legal duties.

Itacknowledges that as it works towards securing the

Group’s success and sustainability and delivering on

our strategy it needs to build and maintain successful

relationships with a wide range of stakeholders within an

interconnected society. The Board has identifi ed fi ve key

stakeholder groups and recognises that it must ensure

theperspectives, insights and opinions ofstakeholders

areunderstood and taken into account when key decisions

are being made. Equally, not all decisions will result in

a positive outcome for all stakeholders; however, the

Board recognises that its decisions should nonetheless

bejustifi able in themselves.

Factors taken into account in the Board’s decision-making

included:

• likely consequences of any decisions in the long term;

• the interests and wellbeing of our people, including

health and safety risks;

• the need to foster the Company’s business relationships

with suppliers, customers and others;

• the impact of the Company’s operations on the

community and environment;

• the desirability of the Company maintaining a

reputation for high standards of business conduct;

• the compliance and fi nancial risks to the Company and

our stakeholders; and

• the need to act fairly between shareholders of the

Company.

Examples of how the Board had oversight of stakeholder

matters and had regard for these matters and the potential

impact on stakeholders when making decisions, are set out

below.

Liquids warehouse

Middleton

Our key stakeholders

Workforce

Read more on page 44

Strategic report

39 McBride plc Annual Report and Accounts 2023

Our stakeholders Section 172(1) statement continued

Workforce

Why signifi cant

We are committed to providing a strong and positive culture

for our 3,406 colleagues

(1)

in 12 countries and recognise

that culture plays a fundamental role in the delivery of our

strategic priorities.

How we engage

The Executive Committee is ultimately responsible for

ensuring that our activities refl ect the culture we wish to

instilin our colleagues and other stakeholders to drive the

right behaviours. Our culture comes to life through our

three core values, which remain unchanged. These values

underpin our purpose and have become a vital part of our

culture.

We are committed to providing an open and inclusive

culture, where colleagues have the opportunity to progress

and wherethey are supported in their development.

2023 highlights

Our hard-working and committed colleagues have continued

to demonstrate extraordinary levels of teamwork, agility and

resilience over the last year when we have faced a signifi cant

period of uncertainty caused by macroeconomic factors

which have impacted our trading position. Working together

to do the right thing by each other, for our customers,

ourshareholders and our communities, has been critical.

We continued to work closely with the European Works

Council (EWC) members over the last year, with the aim

of eff ectively engaging employee representatives from the

diff erent European countries in which we operate.

Outcomes and impact of key decisions

We recognise that our colleagues are fundamental and core

to our business and the delivery of our strategic priorities.

Thesuccess of our business depends on attracting, retaining

and motivating talented employees.

Over the past year, we have made some great progress,

demonstrated by engagement and pride in McBride

plc, which has supported the business through a very

challengingperiod.

• From June 2022 all colleagues had access to a digital

learning platform containing modules, allowing them to

build broad, future-fi t skills across a wide range of topics.

This new learning journey allows colleagues to access a

broader range of career and learning opportunities at

McBride plc.

• We continued to roll out our ‘Let’s Grow’ development

programmes with colleagues attending courses on

‘Investing in Me’, ‘Learning 2 Lead’ and ‘Leading with

Impact’.

• Our McBride Cares Employee Assistance Programme

continues to provide a confi dential telephone counselling

support line 24/7/365 for colleagues and their direct

families.

• We have continued to operate with an interim smart

homeworking programme for eligible offi ce-based

colleagues, allowing them to work in a hybrid way,

spending 50% of their working time from home.

(1) Includes employees, third-party contractors, consultants

and agency workers.

Liquids

Bagnatica

Strategic report

40 McBride plc Annual Report and Accounts 2023

Our stakeholders Section 172(1) statement continued

Customers

Why significant

Good relationships with our customers are the fundamental

bedrock of our business. Under our new divisional structure,

a core ambition is to provide focused and specialist insight

to help our customers with the optimal portfolio proposition

that best suits their business.

How we engage

We aim to deliver industry-leading value, service and quality

for our customers. Our specialist commercial and technical

teams, supported by central teams such as logistics and

purchasing, look to drive long-lasting, trusted relationships

with our customers, ultimately providing a compelling

range of value products. Reacting quickly and effectively to

changing requirements is increasingly a core competence in

our customer proposition.

2023 highlights

Again, this year has seen frequent interactions with

customers, in respect of continued inflationary pressure on

the supply side where, in addition to volatile costs in respect

of raw materials and packaging, global inflationary pressures

have been an increasing feature of our discussions.

Ourinteractions with clients have reached varying levels

within both our organisation and that of our customers.

In all of these difficult conversations McBride has shown

transparency and has had constructive dialogue with

customers in gaining their support for price increases.

Akeypart of our strength is that, through our flexible

productportfolio, we have been able to work with

customers to ensure that their offer to consumers gives

them the value that they seek in these inflationary times

and, where possible mitigate the effects of price increases

on the end consumer.

Outcomes and impact of key decisions

Our position on requested selling price increases was to look

to recover short-term cost rises to cover known inflation in

the coming months and not rely on long forward estimates

and then to seek revision if these estimates proved

inaccurate. We consider our approach, supported by real

data, assisted indelivering the level of selling price increases

achieved.

Strategic report

41 McBride plc Annual Report and Accounts 2023

Our stakeholders Section 172(1) statement continued

Suppliers

Why signifi cant

Raw materials make up a large portion of our product costs.

Price increases, delays or interruption in the supply of raw

materials could signifi cantly aff ect both our operations and

fi nancial position.

How we engage

Our Supplier Code of Conduct, which is visible on our

website, sets out the standards of behaviour we expect

from all of our suppliers. We continually seek to establish

mutually benefi cial relationships with each of our suppliers

and encourage them to match our high standards.

OurcentralisedGroup Purchasing function is dedicated

to sourcing the Group’s key materials and maintaining

constructive and collaborative two-way communication

across our supplier base. A due diligence exercise is carried

out on new suppliers and regular audits take place.

2023 highlights

‘Supply and demand imbalances’ was probably one of the

most commonly used phrases in the fi rst half of the year as

producers reduced output of key commodities, initially to

reduce energy consumption, but subsequently to manage

availability and provide a pricing fl oor in the backdrop

of a slowdown in global demand. The high infl ationary

environment and the subsequent responses of central

banks created an environment not seen for a generation.

Despite these challenges, the Group Purchasing team have

worked well to ensure continued availability across our sites,

demonstrating the strength of the supplier relationships the

buyers have developed.

Outcomes and impact of key decisions

The benefi ts of a centralised Group Purchasing function

have been repeatedly demonstrated throughout the year

with supply continuity being a key measure of success. The

team have continued to leverage the Group’s scale, and

utilise our wide range of sourcing options, in order to exert

pricing control. The Group is not overly reliant on any single

supplier.

Asia Pacifi c manufacturing

Malaysia

Strategic report

42 McBride plc Annual Report and Accounts 2023

Our stakeholders Section 172(1) statement continued

Shareholders

Why significant

A key objective of the Board is to create value for

shareholders and deliver long-term, sustainable growth.

By engaging with our shareholders we ensure confidence

and continued support from shareholders and alignment

ofinterests.

How we engage

We place considerable importance on maintaining effective

and balanced dialogue with all shareholders todiscuss

the Company’s strategy and other associated objectives.

The Chairman and Executive Directors proactively engage

with both existing and potential shareholders. In addition,

the Executive Directors deliver formal presentations of

full-year and half-year results and attend meetings with

analysts, brokers and fund managers to promote a better

understanding of the business and its strategic plans.

The Board is kept informed of investors’ views through

the distribution and regular discussion of analysts’ and

brokers’ briefings and through summaries of investor

opinionfeedback.

All Directors are available at the AGM, either in person

orvirtually, to answer questions.

2023 highlights

During the year:

• McBride plc undertook its regular programme of

engagement with shareholders, which included the

financial reporting cycle comprising full-year and

half-year results, quarterly trading statements and

theAGM;

• the Chair of the Remuneration Committee engaged

with McBride’s major shareholders on the proposed

newDirectors’ Remuneration Policy to be put forward

toshareholders at the 2023 AGM for approval by way of

a binding vote. Further details of the Policy are contained

onpages 119 to 130;

• the Board engaged with two major overseas shareholders

in respect of a significant vote received against the

resolution put forward at the 2022 AGM in respect of

shareholders’ authority to allot shares. Further details are

set out opposite;

• the Board received updates from the Company’s brokers;

• the Chairman and Chief Executive Officer engaged with

four of the Company’s shareholders to secure support

for an increase in the Group’s borrowing limit, which was

subsequently approved at the General Meeting held on

25August 2022;

• shareholder feedback was provided by the Chairman

or Chief Executive Officer to the Board following all

meetings or conversations with shareholders; and

• shareholder feedback was provided by the Chair of

theRemuneration Committee in respect of the proposed

new Directors’ Remuneration Policy.

Outcomes and impact of key decisions

Shareholder views consistently inform McBride plc’s strategic

activities and the views of the Company’s major shareholders

continue to inform the actions of the Board as it implements

its Compass strategy and Transformation programmes. These

will play a key role in supporting the long-term, sustainable

growth that will enable the Board to deliver value for all the

Company’s stakeholders.

At the Company’s 2022 AGM, all resolutions

were passed with the requisite majority of

votes. However, a vote of 49.63% was received

against Resolution 13 (authority to allot

shares). The voting outcome was primarily

the result of two overseas shareholders with a

significant holding voting against the Resolution.

TheCompany undertook further dialogue with

these shareholders to better understand their

concerns in respect of this Resolution and

the reason behind the result. Further details

can be found in our Voting Results Update

Statement which is available on the Company’s

website www.mcbride.co.uk. As a result of the

engagement, the Board will be presenting this

Resolution at the 2023 AGM with a reduced

authority to allot on both a non-pre-emptive

and pre-emptive basis of 5%. The Board will

continue to engage with overseas shareholders

on this topic and will maintain dialogue with

shareholders for whom this authority continues

to present concerns and will keep best practice

in this area under review.

The Company is required to seek shareholder

approval of its Directors’ Remuneration Policy

at least every three years from the date of its

approval. The current Directors’ Remuneration

Policy was last approved by shareholders at the

Company’s AGM held in 2020. Shareholders

are this year being invited to approve a new

Directors’ Remuneration Policy. The proposed

new Policy is set out on pages 119 to 130.

Aspart of the process for agreeing the revised

Directors’ Remuneration Policy, the Chair of

the Remuneration Committee consulted with

the Company’s major shareholders on key

aspects of the Policy. Further details regarding

the rationale for the proposed changes are

contained in the statement of the Remuneration

Committee Chair on pages 115 to 118.

Case study

Strategic report

43 McBride plc Annual Report and Accounts 2023

Our stakeholders Section 172(1) statement continued

Communities

Why significant

We continue to recognise our responsibility to actively

engage and support the local communities in which we

liveand work beyond simply providing employment.

How we engage

The Company proactively supports and encourages

colleagues from all locations to come together to support

local initiatives, organise product donations, raise funds

for chosen charities and volunteer for local organisations.

Examples are provided in the ESG report under ‘Community

and social vitality’ on pages 56 to 58.

2023 highlights

Each of our McBride sites continues to support their local

community through specific efforts such as:

• donating products to a range of local organisations

including schools, hospitals, aid organisations, churches,

shelters and foundations in the countries in which we

operate;

• supporting the children of McBride plc colleagues with

educational grants;

• continuing to support In Kind Direct with product

donations;

• providing local employment opportunities; and

• providing development opportunities through our

Let’sGrow development programmes and the Workday

learning platform.

More information on this can be found in the ESG report

under ‘Community and social vitality’ on pages 56 to 58,

which highlights some of the charitable activities over the

lastfinancial year.

Outcomes and impact of key decisions

Helping and supporting local communities and improving

the living conditions in the areas where we operate remains

high on our priorities. We also recognise that, whilst we have

made good progress in recent years, there is still much for

us to do this coming year.

Strategic report

44 McBride plc Annual Report and Accounts 2023

Environmental, social and governance

Environmental

Our impact on the world

Social

Our contribution to our colleagues and

the communities where we do business

Governance

How we conduct ourselves

Operations|Products|Transport|Waste|Water

Governance body quality|Stakeholder engagement

Ethical behaviour|Cyber security and data protection|Risk and opportunity oversight

Dignity and equality|Health and wellbeing|Skills for thefuture

Employment/wealth generation|Community and social vitality

See more on pages 47 to 53

See more on pages 54 to 58

See more on page 59

Strategic report

45 McBride plc Annual Report and Accounts 2023

Environmental, social and governance continued

Our ESG agenda is successfully aligned to our cost-conscious

approach and we are now actively reportingonourclear

ambitions and responsibilities.

McBride plc works to integrate the principles of long-term

environmental and social sustainability within its business

strategy. Our approach to sustainability is underpinned

by an analysis of the ESG issues that are most relevant

and important in the context of McBride plc’s business

activities. The Company recognises it must tackle climate

change to remain viable; it also places ESG issues at the

core of its approachto sustainability.

Given their strategic signifi cance, our ESG priorities are

actively driven and managed by a cross-functional ESG

Committee, overseen directly by the CEO reporting to the

Board. The Board:

• oversees strategies to manage social and environmental

risks, including management processes and standards;

• reviews the eff ectiveness of management policies and

procedures relating to safety, health and employment

practices;

• monitors our key performance indicators against agreed

commitments;

• approves recommendations from the executive ESG

Committee in respect of key ESG issues and related

objectives;

• monitors the level of resource, competence and

commitment applied to the management of ESG issues

to ensure a culture of continuous improvement; and

• supports McBride plc’s commitment to make a positive

contribution to the communities in which itoperates.

We have developed a framework of non-fi nancial key

indicators and metrics to assess our performance

against our ongoing ESG objectives which sit alongside

our obligations under the Code. Progress is regularly

monitored bythe ESGCommittee and reported on to

ourBoardforreview.

Liquids site

Bagnatica

Strategic report

46 McBride plc Annual Report and Accounts 2023

Environmental, social and governance continued

Environmental

In 2021 we committed to measure our corporate

carbon footprint with an external partner to gain

an understanding of our Scope 1, 2 and 3 emissions.

Thehotspots identified included energy, packaging,

chemicals and logistics, the largest part of our footprint

coming from our chemical consumption.

Our full carbon footprint was first measured in 2021 and

is the baseline that we measure progress against, with a

total of 935,259 tonnes of CO

e, which reduced by 4.9%

to 889,428 tonnes in 2022 due to an increase in Scope 2

renewable electricity purchased and a reduction in volume

which impacted Scope 1 and 3 emissions.

In 2023 we saw an increased footprint to 913,021 tonnes

of CO

e, an increase of 2.6% versus prior year, due to

an increase in the volume of product sold by 4.9%; this

has impacted our Scope 1 and Scope 3 emissions, offset

by continuing decline in our Scope 2 emissions due to

our investment in renewable electricity, which in 2023

reducedby a further 23.9% versus 2022. From 2021 to

2023 we have reduced our Scope 2 emissions by 44%.

Note that Scope 2 also includes our vehicle fleet. The

investments we have made in renewable electricity

and the keen focus by our operations teams on energy

efficiency have led to a step change in our Scope 2

emissions.

The overall corporate carbon footprint for 2023 remains

lower than the baseline 2021 by 1.6% and our intensity,

which is a measure of CO

e per tonne of product sold,

hascontinued to decline.

We recognise the criticality

of the environmental

element of ESG to our

business model and we are

progressing well across a

range of targets.

As of 2023

(1.6)%

overall corporate carbon footprint

versus 2021 baseline

59%

of electricity sourced from renewables in 2023

60%

by weight sourced from PCR for PET plastic packaging

10%

reduction of Scope 1 and 2 emissions

in 2023 vs 2022

Our impact on the world

Strategic report

47 McBride plc Annual Report and Accounts 2023

Environmental, social and governance continued

Environmental continued

In 2023, we committed to a Science Based Target on Scope

1 and 2 for the near term with an ambition to reduce our

emissions by 54.6% by 2033 from a baseline of 2021.

In the coming year we will continue to look at our Scope

3 footprint. In 2023, 97.9% of our footprint was generated

from chemicals, packaging and logistics. For chemicals,

this equates to 65.9% of our Scope 3 emissions. We have

multifunctional working groups who are advising the

ESG council on emission reduction initiatives that we can

deploy in the coming years, having a positive impact on

our footprint. This workplan will help the ESG council to

setScope 3 targets for our operations.

Emissions 2023

(tonnes CO

Emissions 2022

(tonnes CO

Emissions 2021

baseline

(tonnesCO

% emission

change 2023 from

2022

% emission

change 2023 from

2021 baseline

Total (no usage) 913,021 889,428 935,259 2.6% (2.4)%

Scope 1

8,251 7,894 8,282 4.3% (0.4)%

Scope 2

10,841 13,432 19,189 (23.9)% (43.5)%

Scope 3 (no usage)

893,929 868,102 907,788 2.9% (1.6)%

Output: kg net weight of sold products

876,027,999 833,407,133 859,448,949 4.9% 1.9%

Intensity: tCO

e per tonne net weight of sold product

(excluding use phase)

1.04 1.07 1.09 (2.4)% (4.4)%

Our impact on the world

Liquids manufacturing

eper

Strategic report

48 McBride plc Annual Report and Accounts 2023

Impact – Operations

Energy consumption: (Gas, electricity and oil)

Our absolute energy consumption this year has increased

as a result of increasing production volume, yet we have

shown an improvement in energy efficiency compared to

prior year and an overall increase in efficiency of 4.1% since

2019. This has been achieved as a result of a key priority on

energy efficiency activities across all our sites, and will be

a continued area of focus for 2024.

Our investments in green electricity have continued and in

2023 the proportion of green electricity in our total demand

has increased to 59%. In our overall energy consumption for

2023, 42% was from renewable energy sources.

Greenhouse gases (GHG)

We have been calculating our Scope 1 and 2 GHG

emissions for our energy consumption since 2008 in

accordance with the relevant GHG Protocol for Corporate

Accounting and Reporting Standards and using latest

emissions factors from recognised sources, based upon

market values.

The overall impact on our operations for Scope 1 and 2

emissions over the last four years is shown below. The

substantial decrease of 10% in 2023 is driven by our

increase in usage of renewable green energy and energy

efficiency improvements.

2019 2021 2022

2020

Oil

kWh

40,000,000

20,000,000

60,000,000

120,000,000

100,000,000

140,000,000

160,000,000

80,000,000

kg production per kWh

6.65

6.25

6.20

6.30

6.35

6.45

6.40

Gas Electricity

Non-Green

Electricity

Green

Efficiency

6.55

2023

6.50

6.60

McBride plc total energy consumption

(1)

6.35

6.55

6.48

6.47

6.62

133,528,505

126,484,015

145,424,095

136,936,256

130,335,790

(1) Total energy consumption for 2023 of 130.5 million kWh relates

to 17.7million kWh for the UK (13.6%) and 112.8 kWh for the

RestoftheWorld (86.4%).

Split of energy source including green

element of supplier grid mix 2023

Solar power 1.1%

Certified green 40.9%

Fuel oil 0.5%

Gas 27.7%

Supplier mix with

zero carbon 15.0%

Supplier non-green 14.8%

Environmental, social and governance continued

Environmental continued

(2) Total emissions for energy in 2023 of 17,925 tonnes relates

to 632tonnes for the UK (3.5%) and 17,293 tonnes for the

RestoftheWorld (96.5%).

10,000

2021 2022 20232020

22,400

19,170

14,199

10,510

20,000

30,000

40,000

50,000

10,000

20,000

30,000

40,000

50,000

29,879

32,287

38,347

48,216

Net Scope 1 and 2 CO

e emissions (tonnes CO

(2)

for energy consumption

Scope 1 Scope 2 CO

e efficiency

7,615

7,642

7,141

7,415

Our impact on the world

Strategic report

49 McBride plc Annual Report and Accounts 2023

Impact – Products

Our embedded eco-design principles allow our teams to

drive sustainable change, whilst also providing everyday

cleaning products that are effective and safe to use.

Wecontinue to push forward the principle that every new

development should be more sustainable than the product

it replaces.

Our continued areas of focus are to develop solutions that:

Environmental, social and governance continued

1. Improve

plastic

recyclability

4. Increase

responsible

sourcing

2. Reduce

plastic in total

3. Drive

product

compaction

Environmental continued

Area of focus 2022 2023 2025 target

FSC® sourced 91.4% 88.4% 100%

100% recyclable 98.5% 99.0% 100%

50% PCR in our plastic packaging

– PET

– PE

17.6%

52.2%

5.1%

19.3%

60.2%

8.4%

50%

Flexible multi-plastic moved to

mono-material plastic

39% 36% 100%

The slight decrease in the use of FSC® sourced board and

the transition from flexible multi-plastic to mono-material

plastic is due to product mix and transition impacts. In

terms of recyclability, we continue to focus on improving

our recyclability via product design and working closely

with our customers.

The incorporation of recycled plastics into products

continues to be a major focus, with progress made

throughout the year. Recycled PET has advanced

substantially in the last twelve months with an increase

of 8% compared to 2022. For High Density Polyethylene

(HDPE), we are exploring new options to limit the

possibility of impurity contamination in specific product

groups to further accelerate our use of recycled material.

We are also accelerating the move away from plastic

completely for some key product groups, with new

launches for our cardboard cartons for liquid and laundry

capsules.

Sustainability is built into our product development

processes; from the sourcing of appropriate raw materials,

to developing new products, we ensure that all legal and

McBride plc policy requirements are met, offering not

only excellent performance but also proven sustainability

benefits. As we work towards setting Science Based

Targets for our business, our previous targets set for 2025

may be adapted to better fit our Net Zero ambitions.

In line with the target in our Sustainability and

the Environment Policy we are committed to

removing microplastics as defined by Regulation

(EC) No1907/2006from our formulations. The final

Registration, Evaluation, Authorisation and Restriction

ofChemicals (REACH) restriction is likely to be published

later this year and we already have options available for

customers who want to proactively remove concerned

materials.

Our impact on the world

Strategic report

50 McBride plc Annual Report and Accounts 2023

Environmental, social and governance continued

Impact – Products continued

Our commitment to sustainability is also underlined via

ourmembership of the International Association for Soaps,

Detergents and Maintenance Products’ A.I.S.E Charter

2020+ (‘the Charter’). This is the detergent industry

flagship approach to sustainability practice and reporting.

Products carrying the Charter icon demonstrate to

our value chain partners, stakeholders, customers and

consumers that we are actively working towards critical

sustainability actions, such as the UN Sustainable

Development Goals, EU Circular Economy and Plastics

Strategy. The Charter is a comprehensive sustainability

scheme for steering best practice for the cleaning and

hygiene industry.

Impact – Transport

Our new Transportation Management System (TMS) allows

for a high level of data visibility of truckloads and routings.

This facilitates the ability to make informed decisions to

improve the efficiency of our transport network. Upstream

and downstream transport and distribution contributes to

8.6% of our overall footprint and we expect that this new

system will have a positive effect on these emissions.

Impact – Waste

We are continuing to reduce our waste to landfill

year-on-year and we now have eleven sites with zero

wasteto landfill within the Group in 2023. In the last

financial year, 222 tonnes were sent for landfill, a 41%

reduction when compared to 378 tonnes in 2022.

Proactive actions taken by our site leaders included

raising awareness through colleague engagement to help

reduce and segregate better the waste produced, as well

as seeking alternative options for waste that needs to be

disposed of. We continue to drive our final three sites to

get to zero waste to landfill by 2025.

Environmental continued

Our impact on the world

Strategic report

51 McBride plc Annual Report and Accounts 2023

Environmental continued

Environmental, social and governance continued

The Liquids development team is continuing to drive sustainable innovation in

homecare liquid packaging. This year we have focused on developing a concentrated

refi ll cleaning system that is used in conjunction with a liquid trigger cleaner.

Thisincludes a cleaner for windows, bathrooms and all-purpose cleaning.

The product is easy to use: the consumer takes an empty trigger bottle, adds water at

home and then twists on the 70ml concentrated liquid refi ll; the concentrated liquid is

released directly into the trigger bottle and is ready to use. The average trigger bottle

and trigger head weighs c.63g and it can be replaced with a 12g refi ll. This results in

an 80% plastic saving as the same trigger bottle can be used at least eight times and

the refi ll is made from 50% recycled plastic. This new development provides a solution

for consumers to avoid a ‘just keep buying a new one’ approach to cleaning with an

easy-to-use solution.

Case study

Innovation in homecare liquid packaging

Within the Liquids division the product development team has been working with

our suppliers to source alternative bio-based cleaning ingredients for our washing

up liquid and trigger cleaner portfolio. We have developed a new range of products

that are powered by plant-based cleaning ingredients, still meeting all the technical

requirements of our customers. Formulations from the new plant-based portfolio are

now on the market across Europe and are supporting our ambition to reduce our

carbon footprint generated from our purchased chemicals.

Within the Powders division the product development team has been driving

compaction in the laundry powder portfolio with the development of a new laundry

powder portfolio that can be dosed at 50g instead of 65g per wash. This great

development has led to a reduction in the skillet size by 25mm for an average 25 wash

pack and the improved skillet design has led to the optimisation of logistics. There is

nocompromise in cleaning performance and the new formulations are already on the

market in the UK.

Case study

Innovation in homecare formulation development

Our impact on the world

Strategic report

52 McBride plc Annual Report and Accounts 2023

Environmental, social and governance continued

Environmental continued

The Rosporden plant in France has led three exciting initiatives this year, two of

which have contributed to removing virgin plastic from our operations in caps and

shrink wrap, and also housing 240,000 bees in the grounds of our site to promote

biodiversity.

With our ambition to reduce use of virgin plastic, the Aerosols division has developed

a 100% recyclable cardboard cap to replace a traditional plastic aerosol cap. This was

launched in May 2023 for furniture polish on the French market. For one customer

selling 2.5 million units this was a saving of 13.5 tonnes of plastic per year (based on

aplastic cap weight of 5.4g).

In addition, the Aerosols team is also leading the way in moving shrink wrap (tertiary

packaging) to 100% PCR; this has replaced all non-PCR shrink wrap in this plant.

Thisinitiative has replaced 131 tonnes of virgin fl ow wrap with fl ow wrap produced

from100% PCR material.

Since April 2023, the site has housed three beehives containing 240,000 bees. This is

to support the ambition to transform green spaces into biodiversity refuges and help

to preserve bees, that play a critical role in pollinating plants. This has been very well

received by colleagues and has been shared with other McBride locations.

Case study

Innovation in aerosol plant development and the Rosporden Site

100%

PCR

We asked ourselves how to provide practical solutions to our consumers and our

stakeholders to answer to the most urgent challenges they are facing: the cost of

livingand the climate change challenges. We are proposing three smart solutions:

1. Compaction: We assessed whether a specifi c ingredient is actually essential or not.

We have simplifi ed our formulation chassis and kept only the most effi cient and

essential technologies. We adapted our manufacturing equipment to make smaller

unit dose capsules, tablets and related smaller packaging. As a result, for example,

our new 21ml formulation capsule cleans just as well as our old 24.5ml capsule. It is

amore cost-eff ective proposition and limits the use of unnecessary chemicals.

2. Value proposition: We looked at proposing another quality price value proposition

to consumers in our product portfolio. This is about a smart quality of cleaning for

everyday washes and everyday stains. Our new mono-compartment capsule format

delivers an everyday cleaning performance with only 17ml.

3. Credible ecological off er: We are committed to select the most advanced

biodegradable and plant-based cleaning technologies, without compromise on

cleaning performances for consumers. Our ecological dishwashing tablets deliver a

superb performance and are regularly recognised by consumer organisations across

Europe.

Case study

Innovation in unit dose development

Our impact on the world

Strategic report

53 McBride plc Annual Report and Accounts 2023

Social

Environmental, social and governance continued

Our commitment to create a

positive social impact for our

colleagues, stakeholders and

local communities continues

tobe an area of focus for us.

At all of our locations this year, local teams have developed

and delivered a range of wellbeing/safety and engagement

initiatives, all with the aim of making McBride a ‘Great

Place to Work’, some of which are outlined within this

section.

Diversity, equity and inclusion

We value diversity, equity and inclusion (DEI) in all

forms and have this year commenced our DEI journey to

encourage a greater sense of belonging and to build a

more open, diverse, inclusive and engaging culture.

To pursue our commitments:

• in March 2023, we kick-started our journey with a

month-long campaign aimed at raising awareness and

understanding across the organisation; and

• in May 2023, all senior HR leaders attended a DEI

learning programme, facilitated by our external

expertpartner.

Our journey will continue this coming year where we

will roll out tailored educational workshops to senior

leaders from across the Group, with the aim of building

accountability and responsibility to become role models

for DEI and to promote and manage DEI in their local

teams.

Throughout the year we have continued to ensure that

we recruit, develop and reward our colleagues based on

the role they perform and their performance in that role,

regardless of identity, background or circumstance.

We report annually on the UK Government website and

our corporate website our Gender Pay Gap statistics

to meet our UK legal obligations. As at 30 June 2023,

femalemembership of the Board was 33% and of the

Executive Committee was 37.5%. Our published ambition

for Board diversity can be found on page 105.

As at 30 June 2023

33.3% (2/6)

Female Directors

37.5% (3/8)

Female Executive Committee members

22.2% (8/36)

Female senior managers

(1)

38.2% (1,302/3,407)

Female total global workforce

(2)

(1) Includes the Executive Committee and directors of overseas and

UK subsidiaries.

(2) Includes employees, third-party contractors, consultants and

agency workers.

Our contribution to our colleagues and the communities where we do business

Strategic report

54 McBride plc Annual Report and Accounts 2023

Social continued

Environmental, social and governance continued

Health, safety and wellbeing

Health, safety and wellbeing is a primary focus that is

taken very seriously and is endorsed by the Group’s ‘Rules

for Life’, which actively encourages all colleagues to stop

work if they see conditions or behaviours that are unsafe

to themselves or others. This primary focus is further

demonstrated by the Group Health and Safety (H&S) Lead

reporting directly into the CEO, supported by dedicated

health and safety professionals at a local site level in every

country. The dedicated local teams are responsible for the

delivery of Group standards, and the local implementation

of processes and procedures. The local teams lead all

communication and information across all levels at site,

including for near misses and incident investigations,

KPI trends and general performance reporting. They also

ensure site teams have clear roles and responsibilities to

drive prevention measures and safety programmes.

There have been no work-related fatalities in the business

during the 2023 financial year. We utilise a mixture of

lagging and leading indicators to assess the health and

safety performance of our operations. Lagging indicators

include lost time accidents (see our non-financial KPIs

on page 38), whilst our leading indicators include

near miss reporting, corrective actions completed, risk

assessments created/reviewed, and safety observational

walks undertaken. The development of additional leading

indicator tools to further enhance our proactive approach

to health and safety was a key initiative during 2023 e.g.

with the introduction of Quick Risk Prediction (QRP) and

Dynamic Risk Assessment (DRA). These tools were rolled

out to six of our sites during 2023 and the remaining sites

are planned to be completed before the second quarter of

the next financial year.

A comprehensive health, safety and environment gap

analysis was completed at every McBride site in 2023 to

provide an overall health check of the Group. Each site has

subsequently developed a ‘Zero Loss Journey Map’, which

includes a Five-Year Overview, an Annual Master Plan and

a 90-Day Priority Plan, which provides site teams with a

defined strategy that includes priority objectives to further

improve our performance.

We ran an awareness campaign with our colleagues and

their families during 2023 focused on our ‘Rules for Life’,

which are ten basic safety rules that are mandatory for

all McBride colleagues and contractors. We organised

a poster competition for the children of the families of

our colleagues which was aimed to engage colleagues

and their families in this most important topic. The ‘Rules

for Life’ are not new, they simply re-enforce our existing

procedures. They are in place to protect our wellbeing,

andare the rules which we should live by, each and

every day, as we perform our daily work and activities.

By engaging with our colleagues and their families

we built upon these principles to promote a culture of

responsibility, accountability and compliance, which will

reduce the number of potential injuries and ensure that

colleagues and contractors go home every day to their

families and friends, free from injury or ill-health.

Many of our colleagues have continued to work in a

hybridway this year. We recognise that one size does

not fit all and that support for flexible and hybrid ways

ofworking can help colleagues perform better and enable

us to attract and retain a more diverse range of talented

people. We believe it is about balance – balancing the

needs of the individual, the team and the business.

We will continue to assess the effectiveness of our

approach, updating our SMART Working Principles as

needed. We have supported this by enhancing our IT

platforms, including the introduction of more virtual and

digital learning.

Our commitment to supporting colleagues and their

families through our McBride Cares Employee Assistance

Programme, providing confidential 24/7/365 counselling

and advice, remains in place in all countries.

Our Malaysian team has partnered with SOCSO to provide

a free health screening programme for colleagues who

attain 40 years of age. The programme aims to promote

healthy lifestyles and identify any health concerns as part

of the site’s drive around wellbeing.

Read more about our Gender Pay Gap www.mcbride.

co.uk/about-us/corporate-policies/gender-pay-gap/

Our contribution to our colleagues and the communities where we do business

Strategic report

55 McBride plc Annual Report and Accounts 2023

Skills for the future

Over the last year, as part of our commitment to grow

internal capability and invest in our colleagues, we have

facilitated five cohorts of Investing in ME and two cohorts

of Learning 2 Lead from our Let’s Grow development

framework covering in total 75 colleagues from across the

Group, an investment of 1,624 training hours.

Since we launched our Let’s Grow programme in 2020,

337colleagues from across the Group have taken part in

these courses.

Exec

Senior leader

Frontline leader

Mid-level leader

Individual contributor

Let’s grow

Investing in ME

Learning 2 Lead

Leading with IMPACT

Strategic leadership

This year we have continued to build on the transition

to utilising our new digital HR technology to support

colleague development, offering:

• a comprehensive self-paced learning library of over

1,000 programmes;

• capturing and facilitating quality performance

conversations; and

• extending the Talent Review programme, providing

structure and best practice to guide the development

ofkey talent and support succession planning.

Our internal coaching scheme, which allows colleagues to

work with a qualified coach in a safe space, has continued

over the last year, along with facilitating continuing

professional development for McBride accredited coaches.

Additional development opportunities in the year include

the utilisation of Myers-Briggs Type Indicator (MBTI) to

support individual and team awareness, in a number of key

areas specifically promoting team performance excellence.

We are passionate about providing all our colleagues with

opportunities to grow in and from their current roles to

meet their aspirations for the future.

Employment and wealth generation

Our staff turnover figures have been consistent over the

year, with high levels of turnover in certain countries.

We have continued to work closely with the European

Works Council (EWC) over the last year and have held

our first face-to-face meeting since Covid-19. Working in

partnership with employee representatives from all the

European countries in which we operate is important to us.

Community and social vitality

We believe that community involvement and engagement

programmes enhance our relationships with our

communities and colleagues, which in turn strengthens our

Company, benefiting our shareholders.

Our charitable aims look to support colleagues, community

and wider society, through donating cash, time or products

and are predominantly supporting our purpose, that of

helping families keep their homes clean and hygienic.

This year we have been working on the development

of our McBride Gives volunteering scheme, which aims

to encourage colleagues to engage in community

volunteering activities as part of our overall strategic

ambition to give back to the communities that we operate

in. McBride will partner with local charities that support

people in poverty. We are excited that this initiative will

launch during the next financial year.

Social continued

Environmental, social and governance continued

Our contribution to our colleagues and the communities where we do business

Strategic report

56 McBride plc Annual Report and Accounts 2023

Supporting McBride children

Supporting future talent is of great importance to us. In the

past twelve months we have awarded a total of £12,782 to

69 children of McBride colleagues, contributing towards

their learning and further education.

Colleague and community engagement

We have continued to support the UK charity In Kind

Direct through monthly product donations from our

UK site, providing essential cleaning products to those

who are less fortunate. Our teams in all locations have

continued to support local charities, associations, schools,

missions and municipalities. The following pages show

some of the activities across the business:

Social continued

Environmental, social and governance continued

Belgium: Providing donations

Our team in Rosporden has supported the installation of three beehives on the site to play an active part in

protecting and ensuring the survival of bees, which are so important to our eco-system because of their main task:

pollination.

Colleagues at our Rosporden site organised a walk around the site’s facilities, raising money for the fight against

breast cancer.

France: Protecting honey bees to support causes that we care about

On 20 May 2023, the site organised a family day to allow families of McBride colleagues to come and see what

we do. Over 200 visitors attended to be given a guided tour of the entire factory and offices, learning about our

production departments and the role they play. At the end of the tour there was access to refreshments as well as

an inflatable play area for the little ones.

The team of volunteers who made this happen demonstrated our values of always committed, working together,

aspire to be the best, and giving and taking accountability.

Italy: Family Day

Our contribution to our colleagues and the communities where we do business

Our teams have supported the wider community through the donation of over 36 pallets of products to a range of

local charities.

Strategic report

57 McBride plc Annual Report and Accounts 2023

Social continued

Environmental, social and governance continued

Team UK has raised money for local charities, including:

• Mustard Tree, a charity that combats poverty and prevents homelessness in Manchester and Salford, by a

McBride team successfully completing the Yorkshire Three Peaks Challenge. This was a great team effort with

everyone making it to the finish line, completing nearly 25 miles of walking, and a total ascent of over 5,000ft,

injust 12 hours.

• Contributions made during the Macmillan Coffee Morning in aid of cancer support.

The Polish team worked on driving colleague and community engagement through a range of local initiatives:

• Nine colleagues registered with DKMS so that they could become potential bone marrow donors.

• 60 McBride children took part in the children’s day at the site.

• Colleagues donated toys, educational materials and hygiene products as part of a Children with Cancer

fundraiser.

• Organised a collection for the local homeless community and donated gifts to 70 people.

• Collected money to help Ukrainian families who came to Poland.

UK: Raising money for local charities

Poland: Supporting community initiatives

Colleague and community engagement continued

Our contribution to our colleagues and the communities where we do business

Strategic report

58 McBride plc Annual Report and Accounts 2023

Governance

Environmental, social and governance continued

We believe robust corporate governance fosters sound

andresponsible decision-making and strengthens

accountability, transparency and fairness. As a public

company, we consider that our governance processes are

already well established. However, we recognise these

processes need to be maintained and regularly reviewed

toensure we continue to govern our activities with

financial integrity and in accordance with best practice.

Governance body quality

Our guide to how we have complied with each principle in

the Code is set out on page 92. Our metrics on tenure,

gender, nationality and Board members’ relevant

experience is set out on page 96. Our metrics on Board

activity and attendance at Board and Committee meetings

are set out on pages 95, 99, 100, 106 and 115.

Stakeholder engagement

How we engage with our stakeholders is set out in our

section 172(1) statement on pages 39 to 44 and in our

Corporate governance statement on pages 93 to 99.

Boththe quality and frequency of our engagement with

our key stakeholders are reviewed regularly by the Board.

We are open and transparent in all our dealings with our

stakeholders, which we consider as fundamental to our

way of working. Monitored via our framework of key

indicators and metrics, we strive to improve our customer

experience, our impact on our communities, including our

environmental and social impact, and the quality of

engagement with allstakeholders.

Ethical behaviour

We are committed to conducting business with integrity

and high standards of business ethics. Our Business Ethics

Policy, which can be found on our website, is a guide for

our employees to promote the right behaviours and to

help them make the right decisions. McBride plc’s

BusinessEthics Policy is updated annually and reviewed by

the Board. It is promoted to all employees through internal

communication channels and is highlighted to suppliers.

To ensure a constant minimum standard across the

workforce on good business ethics, McBride plc is partway

through a programme to roll out mandatory ethics and

compliance training modules to all colleagues in Europe

and Asia Pacific. This includes modules on anti-bribery and

corruption, conflicts of interest, gifts and hospitality, data

protection and cyber security, with additional training on

competition law and economic sanctions for selected

employees. We have also taken steps during the year

tostrengthen our compliance monitoring programme

inthese areas.

While McBride plc aims to reinforce a healthy culture at all

levels of the organisation, it knows that sometimes things

go wrong. McBride plc has an independent whistleblowing

channel, as well as local internal channels, which

employeescan use to speak up against possible

malpractice or wrongdoing by any employee, supplier,

customer, competitor or contractor. The independent

whistleblowing reporting line is designed to give colleagues

and others a way, anonymously and confidentially, without

fear of detriment or retribution, to report suspected

violations of our standards of conduct, policies, laws or

regulations. The reporting line is available in all languages

commonly used in our business. Any reports received are

evaluated by representatives from Internal Audit and Legal

functions to determine the appropriate action to address

the allegation. If warranted, an investigation is undertaken

to determine the validity of the allegation and to identify

appropriate action to address the allegation.

Cyber security and data protection

With the advancement and widespread use of information

and communication technologies comes an increased

cyber security threat. We regularly assess our corporate

readiness against external cyber attacks and insider

threats, and we implement corporate-wide measures to

protect data and preserve data privacy. In addition to

complying with applicable data protection laws and

regulations, we also implement cyber security and data

protection measures to safeguard our assets and to

protect our stakeholders’ data.

Our policies and procedures focus on protecting our data

from unauthorised disclosures, use or access, and include

monitoring mechanisms to prevent unauthorised intrusion

into our network and identify vulnerabilities against

potential cyber attacks. These risk-based cyber security

measures help to ensure the integrity, confidentiality and

availability of our data. Regardless of where the data

resides, we apply appropriate safeguards to ensure a

sustainable and robust corporate environment in the

interest of our stakeholders. Compliance with our

Information Technology Security Policy and IT Policy is

required of anyone who has access to our networks. We

raise awareness about the importance of data protection

and cyber security with our colleagues through training.

Risk and opportunity oversight

We are focused on continuous improvement to develop

and enhance our control mechanisms to manage risks and

maximise financial returns for our stakeholders. There is

active engagement with management and leadership

teams to identify and assess risks related to our strategies

and business models. The experience of management and

leadership teams helps anticipate emerging and

interrelated risks, in addition to facilitating effective risk

control and mitigation mechanisms.

The Board is responsible for overseeing and monitoring

themanagement of risks and opportunities. Ourgovernance

framework of committees and advisory forums provides

updates and information to the Board to ensure it is able to

make informed decisions. Details on the responsibilities of

the Board and its Committees are set out in the schedule of

matters reserved for the Board and Committee Terms of

Reference, which are available on our website.

Our risk management framework and oversight of risk is

set out in the Audit and Risk Committee report on pages

111 to 114 and in the Principal risks and uncertainties section

on pages 75 to 86. This is our second year of reporting our

climate-related financial disclosures. Governance around

climate-related risks andopportunities can be found on

pages 60 to 62.

How we conduct ourselves

Strategic report

59 McBride plc Annual Report and Accounts 2023

McBride has structured its climate disclosures according

tothe recommendations, set out by the Task Force on

Climate-Related Financial Disclosures (TCFD), inorder

toimprove reporting of climate-related risks and

opportunities (CROs) and support shareholders in making

more informed long-term investment decisions.

According to the Financial Conduct Authority Listing Rule

LR 9.8.6 R(8), reporting is on a ‘comply or explain’ basis.

Whilst we have made significant progress during 2023,

weare still in the early stages of our TCFD journey.

McBride is consistent with the TCFD recommendations

andrecommended disclosures, with partial consistency

inrelation to Strategy 2b and 2c. These areas have been

taken into consideration for next steps and we aim to

incorporate these into our disclosure from 2024 onwards.

We have also considered the TCFD’s All Sector Guidance

for other disclosure areas in our consistency statement

above.

For strategy disclosures 2b and 2c, further work is

underway to enhance the identification, impact and

reporting of climate-related risks and opportunities

acrossour entire business, and how these map over the

short, medium and long term. Our analysis will continue

into 2024, assessing key risks in greater detail, including

the residual risk impacts across products, operations and

potential changes in consumer behaviour and usage.

Ourlonger-term risks (primarily physical risks) will also be

assessed and quantified in greater detail starting in 2024,

building upon the initial work done in 2022. This will help

us to focus activity where we can create the greatest

impact, and to capitalise on potential opportunities

associated with a low-carbon transition, that support

ourbusiness resilience and growth in a future low-carbon

economy.

Pages 68 and 71 explain the work to be completed to

ensure consistency with the TCFD recommendations and

set out the activities McBride has planned during 2024,

asit continues on its journey towards increased

consistency.

Climate-related financial disclosures

Board oversight of climate issues

The Board

• Responsible for maintaining knowledge and

understanding of current and emerging legislative and

regulatory developments pertaining to climate-related

matters.

• Responsible for providing strategic guidance in

respect of McBride’s ESG programme.

• Endorses actions to address climate-related matters

and how McBride adapts its strategy to take account

of potential CROs.

• Reviews climate-related reporting as part of the overall

assessment of the Annual Report and Accounts.

Nomination Committee

• Responsible for Board appointments.

• Ensures the Board possesses the correct depth and

balance of capabilities, including the ability toassess

the impact of climate change through ongoing briefing

sessions during the course of the year.

• Ensures Board appointments support McBride’s

long-term position.

Audit and Risk Committee

• Oversees the assurance model and supports the Board

on matters relating to financial reporting, internal

control and risk management.

• Appraises the integrity of McBride’s climate-related

financial reporting.

• Assesses the process used to develop McBride’s

TCFD-aligned disclosures.

Remuneration Committee

Supports the future implementation of Board-approved

policy on CROs including climate factors and

sustainability goals withinperformance-related pay

forExecutive Directors and senior management.

Governance framework

The Board is responsible for overseeing and monitoring

the management of risks and opportunities, including

CROs. The Board-agreed division of responsibilities

across key areas of McBride’s governance framework is

set out in the Board’s schedule of matters reserved and

the Terms ofReference of the Board Committees.

In terms of reporting lines, the TCFD Working Group

identifies CROs and develops climate-related financial

disclosures, which are reported to the Risk Council,

which, in turn, reviews and validates the outputs of the

TCFD Working Group.

The Risk Council, which has direct responsibility for

principal risks and uncertainties, reports to the Audit

andRisk Committee, communicating any update on key

climate-related risks on at least a twice-yearly basis.

The Executive Committee and ESG Committee (both

ledby the CEO) provide advice and inputs to the TCFD

Working Group, during the preparation of the TCFD

disclosures.

The governance framework of committees and

advisory forums providing updates and information to

the Board on climate-related issues, is set out in the

graphic on the following page. This framework enables

the Board to make more informed business decisions

withclimate-related perspectives in mind.

Governance

Strategic report

60 McBride plc Annual Report and Accounts 2023

Role of senior management

Executive Committee

• Responsible for the implementation of strategy through

the operational management of McBride’s divisions and

monitoring of performance in line with agreed plans.

• Also responsible for managing financial risks, including

those of meeting the Group’s climate-related goals.

• Receives information periodically from the Risk Council

and ESG Committee on progress towards the Group’s

climate goals.

ESG Committee

• Responsible for the Group’s programme on ESG issues.

• Each committee member is responsible for the

execution of an action plan within their own

businessarea.

• The key responsibilities of the ESG Committee include:

• delivery of the ESG programme and monitoring

progress against ESG key indicators and action plans;

• developing and monitoring progress against

Science-Based Targets and a Board-approved

roadmap of emissions reduction opportunities; and

• providing oversight to the Executive Committee

on ESG matters and collaborating with subject

matter experts within McBride to deliver objectives

around responsible sourcing, compaction, plastics

reductions, and more sustainable packaging.

Risk Council

• Responsible for managing climate risks through its

existing risk management processes.

• Also responsible for review and oversight of the

underlying activities, processes, risks and impacts

surrounding our climate-related financial disclosures.

• Provides information to the Executive Committee on

existing and emerging business risks that may impact

our strategic objectives.

• Reports to the Audit and Risk Committee on McBride’s

principal risks, including CROs, and on the performance

of the TCFD Working Group, including progress against

the TCFD disclosures requirements.

TCFD Working Group

The TCFD Working Group reports to the Risk Council

andfacilitates crucial reporting activities. Comprising

members from various divisions and departments, this

collaborative team plays a pivotal role in shaping

climate-related financial disclosures. Their responsibilities

encompass a wide range of tasks, including considering

the impact of relevant climate scenarios, pinpointing risks

associated with these scenarios as they pertain to the

organisation, evaluating the resulting implications,

devising potential responses, and ensuring valuable

inputfrom stakeholders is incorporated into the process.

The TCFD Working Group collaborates with the ESG

Committee to align on a roadmap of emissions reduction

opportunities, and to align these with the TCFD

recommendations. Furthermore, this working group

actively monitors and tracks the progress made towards

these targets, ensuring a comprehensive approach to

address climate-related concerns.

External advice

McBride continues to engage expert external advisers

tosupplement the capabilities within the Company and

assist in establishing reporting frameworks for our Scope

1, 2 and 3 emissions and to aid in the process of setting

Science-Based Targets for our Scope 1 and 2 emissions.

External expertise has also been employed in the detailed

analysis of our transitional CROs associated with the

transition to a decarbonised economy. Further details

canbe found on pages 63 to 68.

Details of communications between management and

theBoard, along with key activities and immediate focus

areas, are set out in the table on the following page.

Climate-related financial disclosures continued

Governance continued

TCFD governance structure

ESG

Committee

Risk Council

TCFD Working

Group

Decision-making

Advisory

Reporting line

Exchange of information and insights

Remuneration

Committee

CEO Nomination

Committee

Audit

and Risk

Committee

McBride plc Board

Executive

Committee

Strategic report

61 McBride plc Annual Report and Accounts 2023

Climate-related financial disclosures continued

Governance continued

Role of senior management continued

Key activities 2023 Focus areas 2024

Board

level

• Challenged, validated and confirmed support for increasing our ambition for

GHG emission reductions with formalisation of Science-Based Targets.

• Reviewed the analysis of our Scope 1, 2 and 3 GHG emissions.

• Reviewed requests from customers to set Science-Based Targets or our own

climate targets.

• Reviewed our product portfolio and operational alignment with respect to our

GHG emissions reduction target of 50% by 2033 from 2021.

• Received updates on current and emerging legislative and regulatory

developments relating to climate-related reporting.

• The divisional leadership teams presented their strategy to the Board,

including market insights into customers’ focus shift to sustainable product

solutions, explaining how sustainability trends were impacting strategy.

• Review and challenge by the Audit and Risk Committee of the approach to

climate-related financial disclosures and associated assurance arrangements.

• Reviewed and approved the TCFD report in the 2023 Annual Report.

• As programme sponsor, the Board to oversee and receive regular updates on

the Net Zero programme from the Transformation team.

• Objectives for the CEO to be aligned to key sustainability and

climate-relatedtargets.

• The Remuneration Committee to consider how remuneration of the Executive

Directors is further linked to progress towards building a more sustainable

future for the business, including reference to its climate-related goals.

Executive

level

• The ESG Committee, led by the Chief Executive Officer, continued to monitor

progress of the execution of the ESG action plans in each business area and in

addition developed

Science-Based Targets

for our Scope 1 and 2 emissions.

• The Head of Regulatory Affairs provided an update on the EU and UK legislative

landscape with reference to the large volume of regulatory changes being driven

by the sustainability agenda.

• The Risk Council continued to review the governance and controls for

climate-related financial disclosures.

• The ESG Committee to continue to develop our Net Zero roadmap. It will also

conduct a detailed analysis to build our prioritised initiatives for emissions

reduction in relation to our Scope 3 emissions, and develop Science-Based

Targets aligned to the roadmap.

• The Risk Council to continue to identify, assess and manage climate risks

through its existing risk management process on an annual basis. During 2024,

it will also review the scenario analysis conducted previously by the TCFD

Working Group.

Operational

level

• The TCFD Working Group (in conjunction with external advisers) conducted

moredetailed scenario analyses on the most material transition risks and

transition opportunities identified, through targeted workshops with key

members of management across the Group (using our existing risk management

process).

• The

Science-Based Target

project resulted in the generation of a heatmap of

Scope 1, 2 and 3 GHG emissions sources, by raw material/packaging category.

• A series of workshops were conducted across the organisation to interrogate our

emissions data and help McBride develop appropriate

Science-Based Targets

• A

Science-Based Target for

Scope 1 and 2 emissions has been defined and

approved by McBride.

• Define and validate Scope 3 carbon emissions targets and monitor the risk of

rising costs of raw materials as a result of carbon pricing on suppliers.

• Refine current Scope 3 emissions estimates and discuss their likely trajectory

to2030.

• Validate and reaffirm the complete set of CROs identified in 2022 to ensure that

they remain appropriate and relevant for McBride.

• Continue with more granular risk assessment on the remaining transition risks

and opportunities.

• Reassess physical risks identified in 2022 and determine if a more detailed risk

assessment is needed for these.

• Specifically, we will start considering financial impact assessment in more

detail, and conduct risk assessments on a residual risk basis, as we start to track

progress formally against our Scope 1 and 2 emissions metrics and targets.

Strategic report

62 McBride plc Annual Report and Accounts 2023

Climate-related financial disclosures continued

Overview of scenario analysis

In 2022, McBride engaged an external adviser to work with the TCFD Working Group to facilitate the identification of CROs over the short, medium and long term and to begin to assess

what the potential impact of these could be on McBride’s business. To build on work to-date, this year McBride carried out a more detailed impact assessment of the most material CROs

on our business. The most material short-term risks (i.e. transition risks) were prioritised this year with a view to assessing and quantifying long-term risks (i.e. physical risks) as a next

step, planned from 2024 onwards. The exercise this year focused on better quantifying the gross or inherent risks involved. The underlying residual risk may be much lower than inherent,

depending on the flexibility and speed of the business to pivot operations in response. This will be a key focus area for 2024, informed by the outcomes of the ongoing Science-Based Target

work, initiated during 2023 and which will be crucial to establishing the residual risks involved.

The distinctive nature of climate risks poses a challenge for standard risk assessment. This is because there is a high degree of certainty that some combination of climate risks will

materialise, but the exact outcomes are dependent on short-term actions and are therefore still unclear.

Scenario analysis provides a flexible ‘what if’ framework that enables the exploration of potential economic outcomes and financial risks under a range of different future pathways. As such,

qualitative scenario analysis was used to start to assess McBride’s strategy against two contrasting climate scenarios: a 1.5°C low carbon world scenario and a 4°C hot house world scenario,

similar to the prior year.

Selection of climate scenarios

We constructed scenarios by referencing a collection of published scenarios developed by widely used sources. These sources are detailed in the following table. The assumptions underpinning

each of these scenarios are detailed further on pages 59 and 60 of our 2022 Annual Report, supplementing our TCFD disclosures for 2023. Going forward, and in line withTCFD

requirements, we intend to review and update our climate scenario analysis at least every three years, when scenario indicators change, or if there is a material change to our business.

McBride

scenario

Temperature

rise by 2100

Policy

action

Informed

Low carbon world scenario Not likely to exceed + 1.5°C by 2100 Aggressive mitigation to bring about a

reduction in emissions

RCP 1.9

(1)

IEA NZ2050

(2)

NGFS NZ2050

(3)

SSP1

(4)

Hot house world scenario Likely to exceed + 4°C by 2100 Minimal policy action taken RCP 8.5

(5)

SSP5

(6)

(1) Technical Summary, IPCC, 2018.

(2) World Energy Outlook 2021, IEA, 2021.

(3) NGFS Climate Scenarios, NGFS, 2021.

(4) SSP1 – The roads ahead: Narratives for shared socioeconomic pathways describing world futures in the 21st century, O’Neill, B et al, (2015).

(5) Technical Summary, IPCC, 2018.

(6) SSP5 – The roads ahead: Narratives for shared socioeconomic pathways describing world futures in the 21st century, O’Neill, B et al, (2015).

Strategy

Strategic report

63 McBride plc Annual Report and Accounts 2023

Climate risks and opportunities

In 2022, 15 CROs were identified as having the potential

to impact McBride under the low carbon world and hot

house world scenarios. The risks and opportunities have

been identified over short (before 2025), medium (2025

to 2030) and long-term (post-2030) time horizons. The

time horizons were selected because of the longer-term

timeframe some climate-related risks will have.

As part of the assessment, consideration was given to

the likelihood of the risk impacting McBride and the most

likely time horizon of impact.

These 15 risks and opportunities are evaluated in further

detail on pages 61 to 66 of McBride’s 2022 Annual

Report, which supplements our TCFD risk reporting

for 2023. Therisks continue to be monitored as part

ofmanagement’s ongoing risk management processes.

In 2023, nine CROs that were identified as having high

potential short-term exposure were prioritised for

more detailed assessment, with longer-term risks to

beevaluated from 2024 onwards. The findings of the

analysis are summarised in the following table:

Strategy continued

Climate-related financial disclosures continued

Transition risks

Transition opportunities

Physical risks

Pricing of GHG emissions

Climate change litigation

Mandates and regulation

Increased cost of raw materials

Change in consumer demands

Investment and finance risk

Employee risk

Substitution of existing tech to lower emission options

Operational decarbonisation through change to

low-emission sources of energy

Use of more efficient production and distribution

processes

Development of new products or services through

R&D and innovation

Heat stress (heatwaves)

Drought stress (prolonged drought period)

Floods, storm surge and sea level rise

Windstorms

Timeframe

Likelihood

Short term

Low Medium High

Medium term Long term

Note: Relative position of risks/opportunities within grid boxes does not reflect relative ranking (e.g. for 1, 4 and 9).

The assessment of net residual risk for each of these specific risks will be carried out after 2023, as we further embed the

outcomes of the Science-Based Target work, which are crucial to mitigate risk.

Strategic report

64 McBride plc Annual Report and Accounts 2023

Pricing of GHG emissions

under a 1.5°C scenario

Description

Carbon taxes are evolving globally, including via the EU Emission Trading System (EU ETS). The

EU ETS benchmark carbon price in February 2022 reached a record high of nearly €96 per tCO

Carbon pricing could manifest as a range of policies such as environmentaland/or sector-wide

taxes, which could increase operational costs.

Controls/mitigation

In 2023 we committed to a Science Based Target on Scope 1 and 2 in the near term to reduce our

emissions by 56.4% by 2033 from a baseline of 2021.

In addition, a Science Based Target project is underway to develop a Scope 3 target and an

associated action plan, expected to be submitted by June 2024.

In parallel, proposals are also under consideration for upgrading vehicle fleet to electric vehicles,

as well as accelerating the shift from gas to electricity.

Impact assumptions

Introduction of carbon taxation with carbon prices based on IEA and NGFS forecasts; emissions

based on current Scope 3 estimates for 2021 and assuming output volume forecasts to 2025.

The Green agenda continues to set the legislative agenda with the introduction of significant

legislation and plastic taxes.

Inherent risk 2025 (short term) 2030 (medium term)

Gross risk score

Inherent risk 2025 (short term) 2030 (medium term)

Gross risk score

Gross risk score (impact x likelihood): Lower Medium Higher|Gross opportunity score (impact x likelihood): Lower Medium Higher

Impact assumptions

Carbon prices based on IEA and NGFS forecasts; emissions based on current Scope 1 and 2 for

2022 and assuming output volume forecasts to 2025.

For Scope 3, emissions reductions are not factored in and residual risk will thus be evaluated once

the emissions target-setting process is complete.

Description

The need to implement regulations that will have a material impact on McBride to drive the

change to a low carbon economy, including legislative proposals from the EU Green Deal,

Chemical Strategy for Sustainability, UK Environment Act and various national plastic taxes.

This will drive a need for reformulation, changes in packaging formats and labelling changes

goingforward.

Controls/mitigation

In 2023 we committed to a Science Based Target on Scope 1 and 2 in the near term to reduce

ouremissions by 56.4% by 2033 from a baseline of 2021.

Supplier engagement is underway to better understand Scope 3 emissions. There are plans to

develop a Scope 3 target and an associated action plan, expected to be submitted by June 2024.

McBride is a member of a number of relevant trade associations and taskforces that help us

correctly implement future legislation.

Mandates and regulation

under a 1.5°C scenario

Climate-related financial disclosures continued

Strategy continued

Strategic report

65 McBride plc Annual Report and Accounts 2023

Description

As we move to a low carbon economy, the implementation of carbon taxation could lead to higher

prices for raw materials, chemicals, plastics and energy costs. This could lead to higher costs of

packaging and product costs. Increased cost of fuel could also affect the transport of products

tocustomers. The higher costs suppliers face may be passed on through McBride’s supply chain.

Controls/mitigation

Engagement with suppliers is currently underway in order to refine Scope 3 current estimates

andoutlook. There are plans to develop a Scope 3 target and an associated action plan, expected

to be submitted by June 2024.

In addition, the following targets included in the McBride Sustainability Policy and expected to

bedelivered by 2025 and form key drivers in understanding the potential increases in the cost of

raw materials going forward:

• all paper and board sourced will be FSC® compliant;

• all our packaging will be 100% fully recyclable, compostable or re-usable;

• on average, all our packaging will contain at least 50% recycled content;

• we will exit all multi-layered flexible packaging; and

• we will remove all REACH-defined microplastics from our formulations.

In addition, on an ongoing basis, reformulation of products will be explored to minimise cost

impact. McBride will work with both suppliers and customers to explore levers to manage cost

riskacross the supply chain.

Impact assumptions

An Enterprise Risk Management approach was taken whereby representatives of each of

McBride’s divisions were consulted regarding the perceived risk to their products and services

based on their technical expertise and experience in the markets. Each division provided an

indication of financial impact range, which were consolidated for an enterprise risk level exposure.

Note: At this stage, assessment of financial impact has been conducted at divisional level. Toascertain

enterprise-level risk/opportunity, interdependencies in the demand for the products of different

divisions require further analysis, to be conducted over 2024 and beyond. It can be assumed that

gross upside and downside risk is significant in the medium term.

Inherent risk 2025 (short term) 2030 (medium term)

Gross risk score

Inherent risk 2025 (short term) 2030 (medium term)

Gross risk score

Gross opportunity score

Impact assumptions

Carbon prices based on IEA and NGFS forecasts; emissions based on current Scope 3 estimates

for 2022 and assuming output volume forecasts to 2025. Supplier emissions reduction targets are

not factored and supplier feedback will inform residual risk estimates.

Impact analysis will be further refined as supplier feedback is received and will feed into our

carbon footprint analysis by June 2024.

Description

McBride’s retail customers are increasingly prioritising reducing carbon emissions and more sustainable

business practices as awareness of the impacts of climate change increases. This shift is more likely to

accelerate as Gen Z’s spending power increases. Failure to meet these shifting values could cause retail

customers to switch to alternative products. Alternatively, capitalising on sustainability reputational

benefits could provide McBride opportunity to extend market share and/or increase revenue.

Controls/mitigation

All divisions have considered sustainability in the context of product development, including with

respect to: sustainability of packaging; reducing energy intensiveness of production; and reducing

the embodied carbon content of products via alternative materials. These have been reflected in

divisional strategies during 2023.

Each divisional leadership team presented their strategy to the Board during 2023. This included

market insights into customers’ focus shift to sustainable product solutions, exploring how

sustainability trends were impacting strategy and addressing the risk/opportunity associated

withchanging consumer preferences.

On an ongoing basis, each division will continue to innovate via R&D and work closely with

retailers and branders to stay abreast of consumer requirements.

11 - Development of new products

or services through R&D and

innovation

under a 1.5°C Scenario

Development of new products

or services through R&D and

innovation

under a 1.5°C scenario

Change in consumer demands

under a 1.5°C scenario

Increased cost of raw materials

under a 1.5°C scenario

Climate-related financial disclosures continued

Strategy continued

Strategic report

66 McBride plc Annual Report and Accounts 2023

Description

McBride’s investment streams could be negatively impacted by investors expecting high levels

ofsustainability performance.

Additionally, the cost of capital may become more expensive and there may be a declining pool

oflenders.

Controls/mitigation

In 2023 we committed to a Science Based Target on Scope 1 and 2 in the near term to reduce

ouremissions by 56.4% by 2033 from a baseline of 2021.

In addition, a Science Based Target project is underway to develop a Scope 3 target and an

associated action plan, expected to be submitted by June 2024.

McBride has a revolving credit facility (RCF) aligned with the Loan Market Association’s

‘Sustainability Linked Loan Principles’. This incorporates three sustainability performance targets:

use of renewable energy; use of recycled plastics; and responsible sourcing of paper and card.

Sustainability is considered as a key factor for yearly strategy reviews with the Board.

Impact assumptions

McBride’s asset register was reviewed and assumptions built around the obsolescence risk to

different technologies. Analysis from McBride’s Science Based Target setting workstream on

othertechnological initiatives was also factored in to inform potential cost ranges, as well as

insight from internal subject matter experts.

Inherent risk 2025 (short term) 2030 (medium term)

Gross risk score

Inherent risk 2025 (short term) 2030 (medium term)

Gross risk score

Gross opportunity score

Impact assumptions

Sustainability, ESG and Net Zero are key topics for investors; increased questions on the topics

areexpected and it is anticipated to possibly deter potential investors.

Cost of capital could potentially increase if climate credentials are poor and climate KPIs are

notmet.

Description

As we move to a low carbon economy, the implementation of different packaging, new materials

and technology could lead to a requirement for some technology enhancement and substitution.

This could lead to: an increase in the cost of replacing assets; some assets requiring upgrade;

and impairment of assets. These higher costs may or may not be shared with customers through

strategic partnerships. Meanwhile, more efficient distribution processes could lead to operational

savings, for example due to lower input material requirements or due to more compact products

and thus more efficient distribution.

Controls/mitigation

In 2023 we committed to a Science Based Target on Scope 1 and 2 in the near term to reduce

ouremissions by 56.4% by 2033 from a baseline of 2021.

In addition, a Science Based Target project is underway to develop a Scope 3 target and an

associated action plan, expected to be submitted by June 2024.

During 2024, McBride plans to explore alignment between climate risk assessment and target

setting with internal capex plans and decision–making. This will aim to ensure sufficient budget

is allocated to support substitution of tech to lower emission options into the future, thus helping

tomanage residual risk.

Investment and finance risk

under a 1.5°C scenario

Use of more efficient

production and distribution

processes

under a 1.5°C scenario

Substitution of existing tech

tolower emission options

under a 1.5°C scenario

Climate-related financial disclosures continued

Strategy continued

Strategic report

67 McBride plc Annual Report and Accounts 2023

Description

Use of renewable energy could reduce costs in the future as carbon taxation is implemented.

Assist in achieving Net Zero strategy, which will act as an opportunity to attract additional

investors, lenders, customers and consumers.

Controls/mitigation

In 2023 we committed to a Science Based Target on Scope 1 and 2 in the near term to reduce

ouremissions by 56.4% by 2033 from a baseline of 2021.

Agreement is in place to purchase additional energy from renewable sources in line with the

Scope 1 and 2 targets. The cost for this has been included in our financial forecasts until 2033.

Inherent risk 2025 (short term) 2030 (medium term)

Gross opportunity score

Impact assumptions

Cost of renewable energy will become cheaper or reach parity with current non-renewable energy.

Carbon prices based on IEA and NGFS forecasts; emissions based on current Scope 1 and 2 for

2022 and assuming output volume forecasts to 2025.

For Scope 3, emissions reductions are not factored in and residual risk will thus be evaluated once

the emissions target-setting process is complete.

Operational decarbonisation through low-emission sources of energy

under a 1.5°C scenario

Climate-related financial disclosures continued

Strategy continued

Informing resilience and strategy planning

Noting the importance of mitigating the potential impacts of these risks and enabling

McBride to capitalise on the identified opportunities, the table opposite outlines

actions McBride is currently undertaking and additional plans it intends to take to

ensure resilience in the face of both the low carbon world (1.5°C) and hot house world

(4°C) scenarios.

Focus going forward to meet recommended disclosures b) and c)

We have made good progress in identifying the CROs we could be exposed to over

different time horizons. We have also started to describe the impact of CROs on

our business, which has helped inform its risk management response and potential

adaptations to its strategy and financial planning. In 2024, McBride intends to conduct

a more granular risk assessment for the most material risks under the two articulated

scenarios. The most material risks have been prioritised based on their gross risk score;

a combination of their impact, likelihood and time horizon assessment. In 2024 we

will start considering risks on a residual basis (i.e. after management response and

strategies have been implemented) and start exploring the impact assessment of the

most material physical risks. Consideration will be given to the resilience of our strategy

under the two articulated scenarios.

Strategic report

68 McBride plc Annual Report and Accounts 2023

Risk management

Defining a process for climate risk identification and management

As detailed on pages 75 to 86, the Group has a rigorous process in place to report the organisation’s principal and emerging risks. Through this process, climate change and

environmental concerns were identified as a principal risk and assessed accordingly. Aspects of climate change risk are also captured in other principal risks, notably supply

chain resilience, changing market dynamics and increased regulatory focus. In addition, we built upon the climate risk assessment that was carried out in 2022 with third-party

consultants, with a deep dive into our most material risks and opportunities. The overall process used for identifying, assessing and managing climate-related risks under different

climate scenarios is detailed in the graphic below.

1. Define climate

scenarios

2. Identify climate-related

risks to McBride plc under

articulatedscenarios

3. Assess business

impacts to McBride

plc

4. Identify potential

responses

5. Perform detailed impact

assessmentof the most material

CROs

Transition risk 1.5°C

Policy and

legalrisks

Market risks Impact on:

• Physical asset

portfolio

• Input costs

• Operational costs

• Revenue

• Supply chain

• Business interruption

Responses might

include:

• Changes to business

model

• Portfolio mix

• Investments in

capabilities and

technology

Pricing of GHG emissions

Mandates and regulation

Increased cost of raw materials

Change in consumer demands

Investment and finance risk

Substitution of existing tech to lower

emission options

Operational decarbonisation through

low-emission sources of energy

Use of more efficient production and

distribution processes

Development of new products or

services through R&D and innovation

Reputational risks Technology risks

Physical risk 1.5°C

and4°C

Acute physicalrisk Chronic

physicalrisks

Impact on:

• Physical asset

portfolio

• Input costs

• Operational costs

• Revenue

• Supply chain

• Business interruption

Responses might

include:

• Changes to business

model

• Portfolio mix

• Investments in

capabilities and

technology

Not an area of focus for 2023.

Our longer-term risks (primarily physical

risks) will be assessed and quantified in

greater detail starting in 2024, to build on

the initial work done in 2022.

Climate-related financial disclosures continued

Strategic report

69 McBride plc Annual Report and Accounts 2023

Climate-related financial disclosures continued

Risk management continued

Metrics and targets

Defining a process for climate risk identification

and management continued

Details of the articulated approach used to assess

climate-related physical and transition risks and

opportunities are included on page 67 of our 2022

Annual Report, supplementing our TCFD risk assessment

process for 2023. A list of potential CROs that could

impact McBride’s business were identified in 2022

under the two articulated scenarios and validated by

management in 2023, ensuring the most material CROs

were tracked and monitored for key developments

and appropriate mitigating factors during the year,

as outlinedin the Strategy section above. In addition,

during 2023, the highest exposure short-term CROs were

assessed via workshops with a cross-functional set of

internal stakeholders. The process identified the impact,

likelihood and mitigations for each CRO in the context of

an adapted set of McBride’s Enterprise Risk Management

(ERM) impact and likelihood scales.

Risk was assessed from an inherent perspective

(i.e.without factoring in mitigation). Going forward, the

identification and assessment of CROs will be refreshed

by McBride on an annual basis.

In 2023, a more in-depth assessment of transition risks

and opportunities with the highest short-term exposure

was undertaken. The assessment focused on a 1.5°C

low carbon world scenario, where transition risk is

anticipated to be high. Impacts were considered in terms

of a potential negative impact on financial performance

(income statement) and financial position (balance sheet).

Specific workshops were held, each focusing on an area

of risk with a collection of relevant internal subject matter

experts. Financial ranges for inherent risk were better

defined. Actions were identified regarding further data

collection and internal policy which needs to be agreed in

order to evaluate residual risk.

Integration of climate risk management into

McBride’s wider risk management

We continue to assess climate risk in 2023 against

an adapted version of our ERM scales. The adapted

scales have allowed for longer time horizons due to

the nature ofclimate risk and the assessment of upside

opportunities. Using aligned scales has also enabled

McBride to integrate the assessment of its climate risks

into its corporate risk register. We have continued to

identify, assess and manage climate risks through the

existing risk management process on an annual basis.

The business plans to take a top-down risk management

approach whereby the risks associated with climate are

tobe centrally monitored by the Risk Council and the

TCFD Working Group.

Details of the Group’s Scope 1, 2 and 3 carbon emissions

for the financial year ended 30 June 2023 are set out on

page48. This data has been provided as eleven months

actual and one month extrapolated. Our Scope 1, 2 and 3

GHG emissions have been calculated in accordance with the

relevant GHG Protocol Corporate Accounting and Reporting

Standards and latest emissions factors from recognised

sources. The Group’s Scope 3 emission data covers the

following categories:

• purchased goods and services;

• upstream transportation and distribution;

• end-of-life treatment of sold products;

• downstream transportation and distribution;

• capital goods;

• waste generated in operations;

• fuel and energy-related activities;

• employee commuting; and

• business travel.

These are the categories that are considered as both

relevant and material to McBride. Emissions relating to the

use of sold products are considered as indirect as they do

not directly consume energy and therefore are not required

to be disclosed.

In addition, during the fiscal year we engaged with an

external partner to identify a heatmap of Scope 1, 2 and

3 GHG emissions sources, by raw material/packaging

category, and conducted a series of workshops across

the organisation to interrogate our emissions data to help

McBride develop an appropriate Science-Based Target.

Following this, a Science-Based Target for Scope 1 and 2

emissions wasagreed.

The table on page 71 details the metrics and targets (linked

to the specific CROs identified by the Company) that have

currently been defined and are being monitored by McBride.

The CO

Scope 1 and 2 targets outlined in the table on

page71 have been costed in detail and the financial

impacts have been factored into our short-term financial

forecasts and plans. McBride expects that as its ESG agenda

develops further over 2024 and beyond, refinements

and additions to these targets and metrics will be made,

with financial impacts being identified and reflected in

forward-lookingforecasts.

Strategic report

70 McBride plc Annual Report and Accounts 2023

Metrics and targets continued

Climate-related financial disclosures continued

Metric

Target

Link to

identified CRO

Performance

against target

Scope 1 and 2

emissions

Reduce Scope 1 and 2 by

54.6% by2033

See page 48

Output volume per

gigajoule ofenergy

15% improvements in

eco-efficiency by2025

See page 49

Use of FSC® certified

board

All paper and board sourced

will be FSC® compliant by

2025

See page 50

Packaging recycling All our packaging will be 100%

fully recyclable, compostable

or re-usable by 2025

See page 50

Recycled plastic content On average, all our packaging

will contain at least 50%

recycled content by 2025

See page 50

Flexible packaging

We will exit all multi-layered

flexible packaging by 2025

See page 50

Microplastics We will remove all REACH-

defined microplastics from

our formulations by 2025

See page 50

Focus for 2024

McBride is committed to building on the progress

achieved in 2023 in relation to the impact our

operations have on the world. Our strategy outlines our

commitments to continue to reduce carbon emissions

by setting appropriate

Science-Based Targets

and

continuing to have these externally validated. For 2024

our focus will be on defining and validating Scope 3

carbon emissions targets and on monitoring the risk of

rising costs of raw materials as a result of carbon pricing

on suppliers, which presents the largest potential

impact to the Company. This will be driven by focused

engagement across our supply chain during 2024 to

refine current Scope 3 emissions estimates as well as to

discuss the likely trajectory of these to 2030.

We also remain very aware of the impact that climate

change may have on us as an organisation. The CRO

identification process is now an established tool for

us to identify the inherent risks that McBride faces.

Following risk identification and scenario analysis in

2023, we remain committed to prioritising and further

embedding the outcomes of the

Science-Based Target

work, which are crucial to mitigate risk. The emissions

reduction targets, as well as the technologies selected

to achieve these, will be pivotal in defining McBride’s

ultimate transition risk to ensure the outcomes of

climate risk assessment are disseminated and mitigation

actions are reviewed and progressed by teams across

the Company. We intend to conduct an assessment

of net residual risk for each of our key CROs from

2024 onwards, as we further embed the outcomes of

the Science-Based Target work, which are crucial to

mitigate risk. In addition, we also intend to focus on

assessing and quantifying long-term risks (i.e. physical

risks) from 2024 onwards. This will ultimately enable

us to monitor and assess these risks whilst focusing on

maximising the climate-related opportunities within our

business model.

Strategic report

71 McBride plc Annual Report and Accounts 2023

Location of TCFD-aligned disclosures within the Annual Report

Governance

Disclose the Group’s governance around climate-related risks and opportunities

a) Describe the Board’s oversight of climate-related risks and opportunities

b) Describe management’s role in identifying, assessing and managing climate-related risks andopportunities

Climate-related financial disclosures

Audit and Risk Committee report

See page(s)

60 to 62

110

Strategy

Disclose the actual and potential impacts of climate-related risks and opportunities on the Group’s business,

strategy and financial planning where material

a) Describe the climate-related risks and opportunities that the organisation has identified overthe short,

medium and long term

b) Describe the impact of climate-related risks and opportunities on the Group’s business, strategyand financial

planning

c) Describe the resilience of the organisation’s strategy, taking into consideration different climate-related

scenarios, including a 2°C or lowerscenario

See page(s)

63 to 68

Risk management

Disclose how the Group identifies, assesses and manages climate-related risks and opportunities

a) Describe the Group’s process for identifying and assessing climate-related risks and opportunities

b) Describe the Group’s process for managing climate-related risks and opportunities

c) Describe how processes for identifying, assessing and managing climate-related risks are integrated into the

organisation’s overall risk management

Climate-related financial disclosures

Principal risks and uncertainties

Audit and Risk Committee report

See page(s)

69 to 70

111 to 114

Metrics and targets

Disclose the metrics and targets used to assess and manage climate-related risks and opportunities

a) Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its

strategy and risk management process

b) Disclose Scope 1, 2 and, if appropriate, Scope 3 GHG emissions, and the related risks

c) Describe the targets used by the organisation to manage climate-related risks and opportunities and

performance against targets

Climate-related financial disclosures

Environmental, social and governance

See page(s)

48 to 50

Climate-related financial disclosures continued

Climate-related financial disclosures

Principal risks and uncertainties

Strategic report

72 McBride plc Annual Report and Accounts 2023

Group non-financial and sustainability information statement

Environmental matters

• Responsible approach to product design and production

Employees

• Responsible for the health and safety of our workforce

Social matters

• Responsible approach to taxation

Respect for human rights,

anti-bribery and corruption

• Reinforcing an ethical business culture

Consumer and

customer trends

Legislation

Financial risks

Legislation

• ESG Policy

• Health & Safety Policy

• Preventing the Facilitation of Tax

EvasionPolicy

• Tax Strategy Statement

• Business Ethics Policy

• Supplier Code of Conduct Policy

• Anti-Bribery and Corruption Policy

• Gifts and Hospitality Policy

• Conflicts of Interest Policy

• International Sanctions Policy

• Share Dealing Policy

• Data Protection Policy

• Policy on the use of independent auditor

for non-audit services

• Policy on the employment of former

employees of the auditors

• Whistleblowing Policy

• Anti-slavery and Human Trafficking

Statement

Pages 45 to 59

Pages 38 and 55

Pages 37 and 181 to 185

Page 59

Understanding the impact of our activities with regard tospecified non-financial matters

In accordance with sections 414CA and 414CB of the Companies Act 2006, which outline new requirements for non-financial reporting, the table below is intended to provide our

stakeholders with the content they need to understand our development, performance, position and the impact of our activities with regard to specified non-financial matters.

Reporting requirement and

ourmaterialareasofimpact

Policy embedding, due diligence,

outcomes and KPIs – pagereference

Relevant Group

principal risks

Relevant Grouppolicies/statements

Strategic report

73 McBride plc Annual Report and Accounts 2023

Group non-financial and sustainability information statement continued

Reporting requirement and

ourmaterialareasofimpact

Policy embedding, due diligence,

outcomes and KPIs – pagereference

Relevant Group

principal risks

Relevant Grouppolicies/statements

Climate-related financial disclosures

• A description of the company’s governance arrangements in

relation to assessing and managing climate-related risks and

opportunities.

• A description of how the company identifies, assesses, and

manages climate-related risks and opportunities.

• A description of how processes for identifying, assessing,

and managing climate-related risks are integrated into the

company’s overall risk management process.

• A description of:

(i) the principal climate-related risks and opportunities arising

in connection with the company’s operations; and

(ii) the time periods by reference to which those risks and

opportunities are assessed.

• A description of the actual and potential impacts of the

principal climate-related risks and opportunities on the

company’s business model and strategy.

• An analysis of the resilience of the company’s business

model and strategy, taking into consideration different

climate-related scenarios.

• A description of the targets used by the company to

manage climate-related risks and to realise climate-related

opportunities and of performance against those targets.

• A description of the KPIs used to assess progress against

targets used to manage climate-related risks and realise

climate-related opportunities and of the calculations on

which those KPIs are based.

Business model

Non-financial KPIs

All risks

Pages 10 and 14

Page 38

Climate change

andenvironmental

Description of principal risks and uncertainties

Pages 75 to 86

Pages 60 to 62

Pages 69 to 70

Pages 63 to 68

Pages 70 to 71 and pages 47 to 53

Strategic report

74 McBride plc Annual Report and Accounts 2023

Principal risks and uncertainties

Our risk management process is underpinned by an integrated and joined-up approach to

managing risk across the Group. It involves understanding, analysing and addressing risk to

enable the business to achieve its overall strategic and day-to-day operational objectives,

therein delivering on its commitments to all stakeholders.

The Group continues to operate under a well-established,

robust and externally benchmarked risk management

framework, which is aligned to ISO 31000:2018, and

supported by a formally defined risk taxonomy structure.

This is to facilitate improved risk identification and to

establish a common language for reporting risks across

the organisation, whilst helping with the categorisation

of the types of risk to which McBride is exposed.

Therisk management framework is also supported by

a comprehensive risk appetite framework to help with

the assessment, escalation and reporting of principal

risks. These activities are performed by identifying and

regularlymonitoring key risk indicators (KRIs) tracked by

senior business leaders on an ongoing basis, from across

the organisation.

Further detail on the risk management process can

befound on page 112.

This process has allowed the Board to identify those

risks which are deemed fundamental to the business

as they potentially threaten the achievement of the

Group’s strategic objectives and the delivery of its key

business priorities. These risks are identified as ‘principal’

based on the likelihood of occurrence and the potential

impact on the Group. These have been consolidated

by the Risk Council and reviewed and agreed with the

Board (having been considered by the Group Executive

Committee and the Audit and Risk Committee). It is also

worth noting thatthese principal risks and uncertainties

in many instances also offer potential opportunities for

thebusinessto harness benefits from.

The principal risks and uncertainties to which the Group

is exposed are summarised on pages 77 to 86, outlining

the risk impact, key mitigating actions and any key

developments during the year, for each principal risk and

uncertainty. The risk trend over the year is also noted,

showing any changes in the risk profile compared to the

prior year. The Group continues to review its overall risk

framework within the context of increasing geopolitical

and macroeconomic uncertainty and the instability being

experienced globally this year, resulting in high inflationary

pressures, currency fluctuations and trading volatility.

This continues to test the resilience of our supply chains,

as wellas impacting an ever-shifting and evolving set of

market, customer and consumer dynamics.

This has been accompanied by a continued heightened

focus on climate and environmental considerations from

both consumers and governments, continued focus in

attracting and retaining talent within the organisation,

a complex and evolving set of legislative requirements

across individual jurisdictions, as well as the increased

riskto sensitive business data as a result of legacy systems,

potential security breaches and a growing significance

of cyber threats over the last year. In addition, health

and safety considerations and product quality and

safety commitments remain fundamental areas of focus

for the Group. Whilst these areas have previously been

managed in our operational risk registers, these have

been elevated as principal risks in 2023, reflecting the

focus on continuing improvements on these areas going

forward. The Board also reconsidered the specific risks

andopportunities relating to the Group’s level of debt and

its funding and financing capabilities in the year. Although

this risk has significantly reduced over the last twelve

months, following the revised RCF funding agreement

announced in September 2022, reduced levels of working

capital and a much-improved set of financial results in the

last year, it remains a principal risk for the Group.

Strategic report

75 McBride plc Annual Report and Accounts 2023

Principal risks and uncertainties continued

Likelihood

Impact

Almost

certain

LikelyPossibleUnlikelyRare

Minimal

Minor

Moderate

Major

Catastrophic

Financing risks

Supply chain resilience

Changing market,

customer and consumer

dynamics

Disruption to systems

andprocesses

Safe and high quality

products

Health and safety

Challenges in attracting

and retaining talent

Climate change and

environmental concerns

Increased regulation

Economic, political and

macro environment

instability

The set of principal risks and uncertainties provided on

the following pages is not intended to be an exhaustive

list. Additional risks not presently known to management,

or risks currently deemed to be less material/strategically

important, may also have the potential to cause an

adverse impact on our business. The Board continues to

have confidence in the ongoing risk horizon scanning and

monitoring activities embedded within the Group’s existing

risk management processes, to provide early notification

of emerging, potentially significant and strategically

important risks on a regular basis.

Strategic report

76 McBride plc Annual Report and Accounts 2023

Principal risks and uncertainties continued

• Financing risk covers the risk of a

deterioration in profitability and its

knock-on/resultant potential negative

impact upon liquidity.

• In 2022, an inability to offset in a

timely manner the significant input

cost inflation by raising prices had

resulted in a deterioration of the Group’s

profitability and liquidity.

• Not achieving the required levels of

profitability and cash flows increases

the risk that banking facilities may be

withdrawn due to breach of banking

covenants.

• A robust and reliable input cost

forecasting process designed to equip

the Group with forward visibility of both

the direction and magnitude of input

cost evolution.

• Divisional Managing Directors are

accountable for maintaining gross

margins through cost saving product

redesigns and/or cost price increases

agreed with customers.

• A comprehensive governance process

of divisional performance reviews is in

place to monitor actual performance

versus pricing and financial targets.

Thisincludes the Executive Committee’s

weekly review of key operational

and financial performance metrics,

meaning that risks can be identified

andmitigating actions agreed in a

timelymanner.

• A detailed and accurate weekly cash,

debt and liquidity forecasting process.

• On 29 September 2022, McBride

announced that it had agreed an

amended RCF with its lender group,

ensuring the Group has sufficient levels

of liquidity headroom and can comply

with revised covenant requirements.

• The return to profitability in 2023,

driven by sales volume increases and

margin improvement actions agreed

with our customers, continued focus on

cash management, and the extension

of invoice discounting facilities to

unencumbered sales ledgers, has driven

improved liquidity. At 30 June 2023,

liquidity of £59.3 million is significantly

above the £15.0 million minimum

liquidity covenant required by the lender

group.

Financing risks

Financing risks, affecting liquidity and

funding, could threaten the ongoing

viability of the Group.

Risk trend/change: 

Risk appetite rating: Low

Averse Low Moderate High Very

high

McBride recognises that it is not possible to

fully eliminate financing risk but continues

to deploy and monitor a robust and

proportionate level of control to ensure that

material instances of risk are minimised.

How it links to our strategy:



Risk impact

Mitigation Key developments

Key: Market standing Operational excellence Sustainability Talent Increased risk No change Decreased risk

Strategic report

77 McBride plc Annual Report and Accounts 2023

Principal risks and uncertainties continued

• Global supply chains remain imbalanced

in many areas as the downturn in

global demand driven by recessionary

concerns was met with a downturn in

production across a large spectrum of

key commodities.

• The current market volatility could create

uncertainty over forward input price

inflation, thus restricting the Group’s

ability to implement plans for recovery

through pricing initiatives.

• The trend of some customers moving

to a more transactional approach to

relationship management leading to

lengthy and prolonged discussions on

the implementation of the required

pricing actions. This has the potential to

have a substantive impact on the Group’s

profitability.

• An over-reliance on any one supplier

could pose a significant business

interruption risk to the Group.

• Our Group Purchasing function is

appropriately resourced with a high

level of market and industry knowledge,

thereby providing the ability to spot

market trends and developments.

• Strong and long-standing supplier

relationships that allow McBride to

leverage scale and push for prioritisation

in times of material shortages.

• A robust and reliable input cost

forecasting process is in place, designed

to equip the Group with forward visibility

of both the direction and magnitude

of input cost evolution, alongwith

a well-structured and controlled

information flow through the supply

chain into the divisional Commercial

teams to help their pricing plans and

actions.

• We have clearly defined account plans

across our customer base to ensure that

we create the appropriate engagement,

at the right level and at the right time.

• A clearly defined set of corporate goals

is in place, underpinned by specific

metrics and targets, with well-articulated

plans to achieve them, that are shared

with our customers.

• We apply a robust and highly effective

risk management approach using set

criteria to identify supply risks and

ultimately drive corrective actions.

• We have an increased level of access to

market intelligence and data, coupled

with a clearly defined training pipeline.

• Our well-structured and effective

monthly forecasting cycle equips the

business with ongoing insights into input

cost evolution and forward outlooks.

• KRIs are embedded, allowing us to

monitor progress and drive appropriate

and proportionate action, where

necessary.

• We have an appropriate level of focus on

contractual cover, with closer alignment

between the Group Purchasing,

Commercial and Legal functions.

• McBride already has a set of published

sustainability targets which are

monitored on a regular basis and has

started on the TCFD reporting journey to

drive further improvements in this area.

Supply chain

resilience

Raw materials remain a significant

proportion of our total product costs.

Asa result of this, the volatility of the

global commodities market continues

toremain a key underlying risk.

Risk trend/change: 

Risk appetite rating: Moderate

Averse Low

Moderate

High Very

high

McBride accepts a moderate level

of concentration risk in relation to

raw material suppliers to maximise

economies of scale and leverage pricing

strategies. The Group is also prepared to

accept a moderate level of risk exposure

in the supply chain to optimise pricing

strategies whilst maintaining a certain

level of flexibility across the value chain

to be able to absorb disruptions and

quickly adapt to change.

How it links to our strategy:



Risk impact

Mitigation Key developments

Strategic report

78 McBride plc Annual Report and Accounts 2023

Principal risks and uncertainties continued

• Our focused Commercial team has

in-depth knowledge of the markets

withinwhich we operate.

• We have an agile approach to product

portfolio management that responds to

changes in consumerneeds.

• We have a rolling five-year strategic plan,

which is reviewed on an annual basis,

to balance capital allocation between

developing new initiatives and supporting

existing business.

• We have strengthened partnerships, with

key retailers to avoid one-dimensional

discussions solely focused on price,

moving the discussion to the full

value-add that McBridebrings.

• A centralised approach to market

data and insights provides us with

visibility of trends and developments

across our markets, allowing informed

decision-making and focused strategic

plans.

• A focused R&D ethos towards cost

saving and sustainability – working

closely with our supplier base to achieve

speed to market.

• The ESG Group has made progress in

measuring the Group’s environmental

impact and setting appropriate

targets to support ongoing business

performance and growth.

• We have demonstrated resilience and

agility in assisting retailers where they

have had disruptions in supply as a result

of competitors’ financial and operational

difficulties.

• We have widened our supplier network

across both direct and indirect

categories in order to ensure reliable

supply at highly competitive price levels.

• All divisions and Group functions have

clear cost-saving targets enabled

by continued investment in business

processes.

Changing market,

customer and

consumer dynamics

High levels of inflation across Europe

are driving a fundamental change in

consumer behaviour. Branders are taking

action to protect against volume loss

as consumers are attracted to the lower

cost offerings of private label. Asprivate

label volume grows, it becomes

increasingly attractive for potential

newplayers to the industry.

Risk trend/change: 

Risk appetite rating: Moderate

to high

Averse Low

Moderate

High Very

high

We strive to uphold strong relationships

with our customers during a period of

dynamic market conditions.

We accept a moderate to high level of risk

in our relationships with customers whilst

we are negotiating increased product

prices to take account of increased input

costs and ever-changing market factors.

How it links to our strategy:



Risk impact

Mitigation Key developments

• With inflation recently running at levels

not seen for a generation and consumer

finances stretched to breaking point,

branders may decide to enter/re-enter, the

private label market to capture some of

the branded sales they have lost.

• Inability to improve the appreciation of all

elements of our value proposition other

than price. This is particularly relevant

during periods of economic slowdown,

and declining consumer consumption,

when key players attempt to hold on to

volumes.

• The lack of growth in the market increases

free capacity and intensifies competition

further. This could lead to greater brander

discounting, stronger retailer pressure on

supplier margins and a squeeze on the role

private label plays.

• Key international retailers face significant

pressure to be the backstop of grocery

inflation and therefore drive an aggressive

approach to tendering and pricing, moving

further towards a transactional price-led

relationship.

• Despite a fragile competitor set, retailers

continue to demand high levels of CSL,

with failure to deliver jeopardising our

reputation and sales performance.

• The razor-sharp focus on value

engineering creates a risk that innovation

becomes de-prioritised, risking

medium-term profitable sales growth.

• Sustainability remains high on the retailers’

agenda, with an increased focus on the

environmental credentials of our products.

Strategic report

79 McBride plc Annual Report and Accounts 2023

Principal risks and uncertainties continued

• Loss of key and sensitive business data

as a result of security breaches, external

hacking and/or cyber attacks.

• The loss of data or the inability to

obtain data – due to issues with

physical storage (e.g. data destruction),

logical storage (e.g.deletion) and data

corruption (e.g. software errors).

• Physical damage to key computer

equipment e.g. due to fire, theft, flood,

malicious damage, etc. which would lead

to disruption at a location which hosts

critical IT services.

• Internet disruption affecting access

toour core systems and operations.

• Underinvesting in Information

Technology (IT) leads to outdated

technologies with weak IT General

Controls (ITGCs), potentially leading

toincreased overhead mitigation costs,

a higher risk of cyber attack, loss of

key data, failure to adequately harness

digitalisation and significant business

disruption.

• Failure to implement a new ERP system

would disrupt our operations and our

ability to serve customers.

• We continually review and invest

in security policies, controls and

technologies to protect commercial

andsensitive data.

• Continued monitoring of developments

in cyber security, which include engaging

with third-party penetration testers and

other specialists, where appropriate.

• Ongoing hardware and software

refreshes and upgrade programmes

are conducted, ensuring performance

can be monitored, and systems and

technologies adequately supported to

combat against any potential loss of

data and/or cyber attacks.

• Formal disaster recovery planning is

undertaken, to ensure critical systems

have a clear plan for recovery.

• Business systems roadmaps are updated

to ensure relevance including core ERP.

• Strong programme governance is in

place for major ERP implementations.

• Annual external vulnerability testing is

undertaken.

• Security KRIs are in place to monitor

progress and drive appropriate action,

where necessary.

• Employee education programme is in

place to improve cyber risk awareness.

• Critical infrastructure is upgraded,

ensuring the correct patch levels are

applied.

• We are moving critical systems away

from our sites into an external cloud

infrastructure.

• An annual review of disaster recovery

processes for all business-critical

systems has been undertaken, ensuring

relevant back-up and recovery plans are

in place.

• New secure access mechanisms

have been introduced for employees

connecting to the corporate systems

when they are not in the office.

• An IT strategy refresh has been

conducted and aligned to business

priorities, with new investments

underway in updated systems and

applications, as part of our Group-wide

Transformation programme.

• Programme governance is in place for

major IT programmes.

Disruption to

systems and

processes

Reliability, availability and security of our

business systems and processes continue

to be a focus area to avoid business

disruption. Availability of core systems

is targeted, as a minimum, to be at the

levels required to maintain the day-to-day

operations of the business. The risk has

increased due to an escalation in the

number of external cyber attacks in the

public domain and elevated threat levels

globally, particularly from rogue nation

states, combined with increasing use of

artificial intelligence as an aid to attacks.

This increasing risk trend is expected to

continue for the foreseeable future.

Risk trend/change: 

Risk appetite rating: Low

Averse Low Moderate High Very

high

We have a low tolerance for risk in this

area but recognise external factors can

be difficult to mitigate as they are often

outside of our control.

How it links to our strategy:



Risk impact

Mitigation Key developments

Strategic report

80 McBride plc Annual Report and Accounts 2023

Principal risks and uncertainties continued

• Issues with quality or safety of products

could lead to reputational damage with

customers, consumers or regulators.

• Potential financial losses could arise due

to a need to recall products, disruptions

in supply, delays to launch or fines

imposed on the Company.

• Our product quality processes and

controls are comprehensive, verified

annually, and monitored for continuous

improvement.

• Raw materials are approved against

our standards and material quality is

regularly monitored.

• In the event of a safety or quality

incident, processes are in place to make

sure that the right experts take prompt

and effective action.

• Our labelling processes comply with all

applicable regulations and are kept up

todate with all regulatory changes.

• We engage with regulators and industry

groups to stay updated on emerging

safety concerns.

• All annual reviews of processes and

controls are completed.

• Raw material policy update has been

completed for 2023.

• We continue to participate in all relevant

trade associations and taskforces.

Safe and

high-quality

products

We recognise the inherent risks

associated with product quality and

safety and we acknowledge that product

defects can occur due to various factors

such as human error, equipment failure,

or other unforeseen circumstances. We

are also aware that any errors in labelling

can have significant repercussions

on consumer safety and customer

reputation. It is therefore imperative

that we maintain the highest standards

of product quality and safety, both to

safeguard the wellbeing of consumers

as well as to uphold the trust and loyalty

customers place on us.

Risk trend/change: 

Risk appetite rating: Averse

Averse Low Moderate High Very

high

So far as the production of safe and

high-quality products is concerned,

McBride has a zero tolerance for risk.

How it links to our strategy:



Risk impact

Mitigation Key developments

Strategic report

81 McBride plc Annual Report and Accounts 2023

Principal risks and uncertainties continued

• The assessment of hazardous tasks/

activities could lead to gaps in

associated risks and relevant controls

required to prevent potential injury, ill

health or environmental incidents.

• An inaccurate or incomplete assessment

of specific/specialised elements of health

and safety, coupled with potentially

differing standards in operational

controls in this area, could result in

the potential risk of injury, ill health or

environmental incidents.

• An insufficient ‘Training Needs Analysis’

could lead to an inconsistent approach

to health and safety training, resulting

in the inability to determine the

necessary competence of workers,

ultimately affecting their health, safety

orenvironmental performance.

• We have an appropriately resourced and

skilled Group-wide Health & Safety (H&S)

function, which includes a Group H&S

Lead reporting directly into the CEO,

supported by dedicated health, safety

and environment professionals ata local

site level in every country.

• We have created an H&S Governance

Framework, incorporating an H&S Council

responsible for the developmentand

implementation of continual

improvement initiatives.

• The utilisation of a standard Group-wide

H&S proforma helps to provide a more

robust risk assessment of general tasks

and activities.

• The development of defined Group

standards on H&S allows McBride

to establish minimum requirements

to improve operational control and

health, safety and/or environmental

performance.

• The development of tailored site Zero

Loss Journey Map (ZLJM) improvement

plans determined from comprehensive

gap analysis enables the Group to

define strategy and priority objectives,

in order to improve health, safety and

environmental performance.

• The ongoing monitoring of defined

Group standards on H&S ensures

minimum standards on health, safety

and/or environmental performance are

maintained.

• The development and implementation of

additional ‘in-process’ tools e.g. Dynamic

Risk Assessment (DRA) and Quick Risk

Prediction (QRP) help to further enhance

the Group’s approach based on proactive

‘Leading Indicators’.

• The acquisition of a leading Health,

Safety and Environmental (HSE)

software solution helps to provide

greater analysis and management

of data/corrective actions to further

enhance the continuous improvement

ofHSE performance across the Group.

• We have Standard Incident Reporting

Sheets across the Group for ‘near misses’

and ‘accidents’.

• We have completed a comprehensive

HSE gap analysis at each site and the

subsequent development of tailored

ZLJMs to define strategy and priority

actions, and to ultimately drive

Group-wide HSE improvements.

• We have developed a standard Root

Cause Analysis (RCA) procedure, driving

alignment on identified issues and

corrective actions to support continual

improvement.

Health and safety

We recognise the inherent risks

associated with poor identification

of health and safety risks, evaluation

of hazards and the prioritisation of

associated actions and controls, which

represents a potential risk of injury, ill

health or environmental incident.

Risk trend/change: 

Risk appetite rating: Averse

Averse Low Moderate High Very

high

McBride has zero tolerance for risk

in this area and deploys a robust and

proportionate level of control and

monitoring mechanisms to ensure

instances of this risk are minimised.

How it links to our strategy:



Risk impact

Mitigation Key developments

Strategic report

82 McBride plc Annual Report and Accounts 2023

Principal risks and uncertainties continued

• Our ability to attract, develop and retain

a diverse workforce with a wide range of

skills is critical for the effective delivery

of our strategies.

• The loss of key leadership and talented

colleagues and the inability to effectively

replace them could make it difficult

to manage the business, ultimately

adversely affecting operations and

financial results.

• Market competition for key leadership

and talent remains strong across the

wider economy and specifically in some

of the countries within which we operate.

Whilst we continue to have robust

response mechanisms in place, we face

the complexities posed by uncertain

macroeconomic conditions, intense

competition for talent and significant

wage inflation.

• People performance, potential and

succession management is formally

reviewed and subject to calibration by

senior management each year. Core skills

gaps are identified to inform clear action

plans and address key talent retention

or attraction risks. There are frequent

discussions on talent and retention with

the Executive Committee, with regular

oversight by the Board.

• Our Remuneration Committee agrees

the objectives and remuneration

arrangements for senior leaders.

• Agile ways of working, including smart

home working, are frequently reviewed,

to unlock internal capacity and support

our ability to motivate, retain and

attracttalent.

• We regularly review our ways of

working to drive speed and simplicity

through our business, allowing us to

remain agile and responsive to market

trends, in particular utilising our new

Human Capital Management (HCM)

system to drive efficiency in our talent

management, skills development and

talent reporting.

• This is our first year of using our new

HCM system to run a full talent cycle,

enabling us to better determine and

report on our colleagues’ performance

and potential, plus reward them as

appropriate to enhance retention of key

colleagues.

• Our onboarding processes have been

reviewed and updated in most areas,

resulting in a more engaging welcome to

McBride for new colleagues.

• Actions have been taken to ensure that

staff remuneration remains competitive

within each localmarket.

• We continue to roll out measures to

ensure the wellbeing of our colleagues,

with a number of specific initiatives

launched during the year, including a

focused four-week Diversity, Equity

and Inclusion impact campaign during

March2023.

Challenges in

attracting and

retaining talent

Failure to attract, retain and develop the

required capabilities, which could impact

the delivery of our purpose, vision and

business performance.

Risk trend/change: 

Risk appetite rating: Low

Averse Low Moderate High Very

high

McBride has a low appetite in relation to

people risks. It acknowledges that there

is a core dependency on people and their

knowledge in order to provide an effective

service both within the business and to our

customers.

How it links to our strategy:



Risk impact

Mitigation Key developments

Strategic report

83 McBride plc Annual Report and Accounts 2023

Principal risks and uncertainties continued

• Government actions to mitigate climate

change, such as carbon taxes, land use

regulations, or regulations restricting

product composition, may increase costs

or limit operational flexibility. This could

lead to financial cost for the Company,

over and above the increased costs

associated with sustainable materials.

• Failing to adapt our business models and

strategies to the sustainability concerns

of customers and consumers could

reduce our ability to continue to produce

and deliver appropriate goods and

services. This could lead to reputational

damage for the Group and ultimately

affect our growth, competitiveness and

profitability.

• The increased incidence of extreme

weather events could impact our

ability to sustainably source essential

components for our products and

services, potentially leading to supply

disruptions.

• We could fail to be eligible as a preferred

supplier to our customers due to lack

of our commitment to measure our

corporate carbon footprint and to

set and realise appropriate reduction

targets.

• The immediate focus of our mitigation

activities is on our preparedness for both

supply chain disruptions (e.g. through

flexible sourcing policies in place) and

the ongoing reduction of our operational

carbon footprint measured via

appropriate metrics and using validated

targets.

• We have developed a more

comprehensive understanding of our

customers’ needs, goals and objectives

to mitigate their overall carbon footprint,

aligning our own climate change action

plans as appropriate.

• An annual measurement of our corporate

carbon footprint and creation of a

carbon heat map has been developed

with external consultants. This follows

required corporate reporting standards

and is the main driver for action

plans to reduce our carbon-intense

productionareas.

• We have a focused cross-functional ESG

forum with an established framework

that continues to operate effectively,

leading the Group’s ESG activities

and specifically driving our response

to climate change and environmental

concerns.

• We continued to engage with experts

to work with the TCFD Working Group,

in order to further risk assess key CROs

over the short, medium and long term

and to assess their potential impact on

the Group’s business. Further details are

provided on pages 63 to 68.

• We are working with our energy

suppliers to increase the proportion of

our energy from renewable sources,

whilst looking to offset additional costs,

via improved site efficiencies. This is

required to meet our 2025 target (30%)

and our agreed Science-Based Target.

• We have completed the 2023 Carbon

Disclosure Project (CDP) disclosure on

climate action.

Climate change

and environmental

concerns

An evolving, multi-dimensional risk

influencing our ability to continue

to produce and deliver appropriate

goods and services in a sustainable and

environmentally responsible manner,

leading to a potential lack of alignment

with key retail customers, a loss of

revenue, supply disruptions and an

inability to deliver a reduction on our

corporate carbon footprint ambitions.

Risk trend/change: 

Risk appetite rating: Low

Averse Low Moderate High Very

high

The Group has a low tolerance for risk in

this area whilst recognising that external

factors can be difficult to mitigate as they

are often outside of our control.

How it links to our strategy:



Risk impact

Mitigation Key developments

Strategic report

84 McBride plc Annual Report and Accounts 2023

Principal risks and uncertainties continued

• Non-compliance with relevant laws

and regulations could expose McBride

and our customers to civil and criminal

actions. This could result in possible

damages, fines, sanctions and damage to

our corporate reputation.

• Changes to and introduction of

additional laws and regulations also have

a material impact on the cost of doing

business via increased reporting and

growing resource requirements to meet

heightened, complex and frequently

evolving compliance needs.

• Our continued focus on product

compliance processes and controls

is regularly monitored to drive

improvement.

• Communication with employees ensures

that compliance is embedded within

keyroles.

• All raw material suppliers must verify

compliance to relevant legal and safety

requirements, with these standards

continually monitored and updated.

• Legal and regulatory specialists continue

to monitor the relevant legislative

framework that McBride operates under,

to provide assurances of compliance

with all existing and new legal

obligations. External legal guidance is

sought, where appropriate.

• McBride is an active member of relevant

trade associations and industry bodies.

Where appropriate, we can provide input

into government consultations which

affect our products or industry.

• Communication of legislative

requirements is now fully formalised via

specific divisional briefing, leadership

briefings and specific project teams.

• Continual improvement of monitoring

and oversight systems, processes

and activities to respond to increased

emerging regulatory compliance and

reporting obligations.

• Use of digital tools to check compliance

of formulations against legal and McBride

policy requirements.

• Monitoring of the legislative landscape

continues to be a priority, particularly in

relation to the EU Green Deal.

• McBride has contributed to the

detergent industry impact assessments

conducted for the update to the

Detergent Regulation, Regulation (EC)

No 1272/2008 on the classification,

labelling and packaging of substances

and mixtures (CLP), Regulation (EC) No

1907/2006 of the European Parliament

and of the Council of 18 December2006

concerning the Registration, Evaluation,

Authorisation and Restriction of

Chemicals (REACH) and the impact

assessments for new pieces of legislation

such as the Ecodesign for Sustainable

Products Regulation (ESPR) and the

Green Claims Directive.

• Increased regulation has also been

further assessed as a transitional risk as

part of the work undertaken by the TCFD

Working Group. Further details are on

pages 64 and 65.

Increased

regulation

The regulatory environment remains

complex with requirements for increased

monitoring, governance, product

composition and reporting. McBride

is subject to laws and regulations in

the markets in which it operates and

compliance with these is an essential

partof our business operations.

Risk trend/change: 

Risk appetite rating: Low

Averse Low Moderate High Very

high

So far as legal compliance and safety of

consumers and employees are concerned,

the Company has a zero tolerance for risk.

McBride recognises the need to adopt

a risk-based approach to managing

regulatory risk that is proportionate to the

risk, delivers acceptable outcomes for its

customers and is financially sustainable

and practical to operate.

How it links to our strategy:



Risk impact

Mitigation Key developments

Strategic report

85 McBride plc Annual Report and Accounts 2023

Principal risks and uncertainties continued

• Failure to react quickly enough

tochanging economic and/orpolitical

conditions e.g. inflationary pressures,

currency instability, global trade tensions,

heightened political protectionism,

changes to customs duties and tariffs,

and eroded consumer confidence, may

impact on our freedom to operate in

a specific market and could adversely

impact forecasting and financial

performance.

• The Group operates in the consumer

products environment where external

factors such as the general economic

and geopolitical climate, levels

of disposable income, changing

demographics and buying patterns

couldall impact customer spending.

• Prolonged uncertainty owing to

political and ongoing macroeconomic

developments, the Russian invasion of

Ukraine and the significant inflationary

pressures that many global economies

are currently facing, could potentially

affect our supply chain, availability of

key products and thereby increase the

Group’s cost base.

• Disruption could be caused by sanctions

imposed due to geopolitical events,

or the failure to respond or react to

sanctions on a timely basis.

• We conduct local and global monitoring

of key business drivers and performance,

with cross-functional steering groups to

manage acute issues, including inflation

and other supply chain considerations.

• Local sourcing strategies are supported

by centrally administered currency and

interest rate hedging arrangements,

tominimise volatility, in line with the

Group’s Treasury Policy.

• The Group monitors the performance of

individual divisions and markets regularly,

covering a range of KPIs.

• We have an adaptable portfolio of

existing products and an ability to

develop new products across all our

geographies, suiting the changing needs

of customers and consumers.

• The business has a proven track record of

being able to pass on inflationary costs

through increased pricing.

• The Group has a formal and frequent

forecasting process as well as

medium-term planning processes, which

help provide early visibility and a timely

response to significant changes in

consumer demand patterns.

• McBride has adopted a Group-wide

International Sanctions Policy, which is

continuously reviewed, monitored and

updated, and implemented a risk-based

process to ensure compliance with

international sanctions measures that

apply to our business and that may

restrict our ability to trade with certain

countries, territories or parties.

• The risk profile increased during the year

primarily due to ongoing political and

macroeconomic developments related

to the aftermath of Covid-19, the Russian

invasion of Ukraine and the significant

inflationary pressures that many global

economies are currently facing.

• We have continued to improve

forecasting and planning capabilities,

resulting in rolling annual volume

forecasts by product category, region

and customer, to better assess and

respond to long-term opportunities

andrisks.

• McBride has taken an active decision

not to trade with countries that are

subject to comprehensive sanctions

programmes, or with any entity or

individual that is located, incorporated

or ordinarily resident in any of these

locations. In relation to other countries

subject to less restrictive sanctions

programmes, we risk assess and perform

adequate due diligence on our business

partners and the final destination of our

products when establishing or reviewing

trade relationships to ensure that we do

not trade with listed sanctions targets

or otherwise engage in activities that

are prohibited under relevant sanctions

measures.

Economic,

political and

macro environment

instability

Failure to anticipate, understand and

successfully respond to changes in

geopolitical and economic uncertainty

ona timely basis may impact our ability

to meet our strategic goals.

Risk trend/change: 

Risk appetite rating: Moderate

to high

Averse Low

Moderate

High Very

high

We accept a moderate to high level of risk

in our relationships with customers and

suppliers whilst these are being tested by

geopolitical uncertainty, rapidly changing

macroeconomic developments and

significant global inflationary pressures.

How it links to our strategy:



Risk impact

Mitigation Key developments

Strategic report

86 McBride plc Annual Report and Accounts 2023

In accordance with the UK Corporate Governance Code

2018, the Board has taken into consideration the Group’s

principal risks and uncertainties when determining whether

to adopt the going concern basis of accounting and when

assessing the prospects for the Group when preparing its

viability statement.

Going concern statement

The Group’s business activities, together with the factors

likely to affect its future development, performance and

position, are set out in the Strategic report. The financial

position of the Group, its cash flows, liquidity position and

borrowing facilities are described in the CFO’s report on

pages 35 and 36. In addition, note 20 to the consolidated

financial statements 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 and liquidity risks. The Group meets its funding

requirements through internal cash generation and bank

credit facilities. At 30 June 2023, committed undrawn

facilities and net cash position (i.e. liquidity, as defined in

note 2 to the consolidated financial statements) amounted

to £59.3 million.

The Group’s base case forecasts are based on the

Board-approved budget and three-year plan. They

indicate sufficient liquidity, debt cover and interest cover

throughout the going concern review period to ensure

compliance with current banking covenants. The Group’s

base case scenario assumes:

• revenue growth of c.4-5% per annum, driven

predominantly by volume increases resulting from net

contract wins;

• raw material prices reducing compared to 2023 levels,

which in themselves remained significantly higher than

the pre-Covid-19 pandemic era as a result of exceptional

levels of input cost inflation;

• interest rates increasing by c.100 basis points versus

budgeted assumptions; and

• Sterling: Euro exchange rate of £1:€1.12.

The Directors have considered a severe but plausible

downside scenario to stress test the Group’s financial

forecasts, with the following assumptions:

• no revenue growth from assumed contract wins in 2024;

• revenue growth reducing to half of that assumed in the

original three-year plan for 2025;

• an increase in raw material and packaging input costs

compared to latest forecasts;

• interest rates increasing by a further 100 basis points;

and

• Sterling appreciating significantly against the Euro to

£1:€1.22.

In the event that such a severe but plausible downside risk

scenario occurs, the Group would remain compliant with

current banking covenants.

After reviewing the current liquidity position, financial

forecasts, stress testing of potential risks and considering

the uncertainties described above, and based on the

currently committed funding facilities, the Directors have

a reasonable expectation that the Group has sufficient

resources to continue in operational existence and without

significant curtailment of operations for the foreseeable

future. For these reasons the Directors continue to adopt

the going concern basis of accounting in preparing the

Group financial statements.

Viability statement

In accordance with the requirements of the UK Corporate

Governance Code 2018, the Directors have performed a

robust assessment of the principal risks facing the Group,

including those that would threaten its business model,

future performance, solvency or liquidity. The Board has

determined that a three-year period to 30 June 2026

constitutes an appropriate period over which to provide

itsviability statement.

In assessing the Group’s viability, the Directors have

considered the current financial position of the Group and

its principal risks and uncertainties. The analysis considers

a severe but plausible downside scenario, featuring the

principal risks from a financial and operational perspective,

with the resulting impact on key metrics, such as debt

headroom and covenants. The downside risk scenario

assumes sensitivity around exchange rates and interest

rates, along with significant reductions in revenue and

cash flow over the three-year period. The Group’s global

footprint, product diversification and access to external

financing all provide resilience against these factors and

the other principal risks to which the Group is exposed.

Whilst the Group ends the year with net current liabilities

of £11.9 million, the Directors conclude that the Group has

access to sufficient financing facilities in order to support

this position.

After conducting their viability review, the Directors

confirm that they have a reasonable expectation that the

Group will be able to continue in operation and meet its

liabilities as they fall due over the three-year period of their

assessment to 30 June 2026.

Going concern and viability statement

The Strategic report was approved and signed by the

Board on 18 September 2023 and signed on its behalf by:

Chris Smith

Chief Executive Officer

Strategic report

87 McBride plc Annual Report and Accounts 2023

Chairman’s introduction to the Directors’ report

Dear shareholder

On behalf of the Board, I am pleased to present this year’s Directors’ report and to

updateyou on the work of the Board and its Committees and how we have discharged

our responsibilities during this fi nancial year.

Board leadership

As Chairman, I am responsible for leading and ensuring an eff ective Board. As we

emerged from a period of economic uncertainty, we successfully concluded negotiations

with our syndicate of lenders, culminating in our announcement on 29 September

2022 of agreement by the lenders to continue to provide the Group’s €175million

sustainability-linked RCF to its original maturity date of May 2026. Iwould like again

to pay tribute to my Board colleagues for their fl exibility and outstanding support

throughout the year.

Governance

The application of the Principles of the Code is evidenced throughout this Annual Report.

We are accountable to all of our stakeholders for ensuring that governance processes

are in place and we are fully committed to meeting the standards of the 2018 Code as far

as it applies to a FTSE Fledgling company. The table on page 92 provides details of our

compliance with the 2018 Code for the fi nancial year 2023.

Board changes

Having served nine years on the Board, Steve Hannam, who was Senior Independent

Director, retired from the Board at the conclusion of the 2022 AGM on 16 November2022

and Elizabeth McMeikan took up the position of Senior Independent Director upon his

retirement. Elizabeth already had extensive experience as a Senior Independent Director,

which she now brings to the role. Regi Aalstad was appointed as the Non-Executive

Director responsible for employee engagement, continuing Steve’s good work in this area.

On 31 May 2023, Igor Kuzniar stepped down as a Director after four years’ service. Igor

joined the Board following constructive discussions with Teleios Capital Partners LLC,

a European-focused investment fi rm and the Company’s largest shareholder, regarding

Board composition and governance considerations. His insights and perspectives have

been invaluable as the Company charted a new direction and navigated the challenges

created by the current external environment. Igor leaves McBride with confi dence in

the Board and leadership to continue their work in delivering the Company’s strategy

supported by a strong corporate governance framework.

On behalf of the Board, I would like to thank Igor and Steve for their commitment and

contribution to the Board and its Committees throughout their tenure as Directors.

The Board continues to

support and challenge

management as we now

focus on delivering our

Compass strategy both

effi ciently and eff ectively.

Jeff Nodland

Chairman

Directors’ report

88 McBride plc Annual Report and Accounts 2023

Chairman’s introduction to the Directors’ report continued

Dividend

The Board has agreed with its lender group that no dividends will be paid until it is in

compliance with its original net debt and interest cover banking covenants, per the

lender refinancing agreement of May 2021. Therefore, the Board is not recommending

a final dividend in 2023. As stated in the 2022 Annual Report, future dividends will be

final dividends paid annually in cash, not by the allotment and issue of non-cumulative

redeemable preference shares (‘B Shares’).

As outlined in the RNS dated 29 September 2022, under the Company’s €175 million

RCFas amended, the Company is not permitted to redeem or repay any of its share

capital. Thisrestriction remains in place until the original maturity date of the RCF in

May2026 and,as a result, no redemption of existing B Shares is permitted at the present

time. Once this restriction is lifted, B Shares will continue to be redeemablebut limited to

oneredemption date per annum, in November of each year.

S172 of the Companies Act 2006

Stakeholder interests are at the heart of every strategic and operational decision taken

by the Board. Our focus on discharging our responsibilities to promote the success of the

Company in accordance with section 172 of the Companies Act 2006 and the impact our

decisions will have on our stakeholder groups is at the forefront of our minds at each and

every Board and Committee meeting.

Further information on our stakeholders, how we have considered them in decisions

duringthe year and our engagement with these stakeholders is set out on pages 39 to 44.

Board effectiveness

As Chairman, I am responsible for ensuring we continue to have an effective and

functioning Board. We review our effectiveness as a Board on an annual basis, including

an assessment of its Committees.

The internally led Board evaluation undertaken in May 2023 gave us the opportunity to

reflect on our own performance and consider areas of focus which will drive positive

change over the coming years. Further details of the Board evaluation can be found in

theNomination Committee report on pages 103 and 104.

I will continue to work with my fellow Directors and with the Company Secretary to

seek enhancements to the effectiveness of the Board and our Board Committees and

create further focus on those areas that the Board believes will make the most impact in

achieving long-term sustainable success for the business.

Annual General Meeting

The 2023 AGM will be held at the registered office of McBride plc, Middleton Way,

Middleton, Manchester M24 4DP on 20 November 2023 at 2.00pm.

Each ordinary share of the Company carries one vote at General Meetings of the

Company. Any ordinary shares held in treasury and the B Shares have no voting rights.

A shareholder entitled to attend, speak and vote at a General Meeting may exercise

their right to vote in person, by proxy, or in relation to corporate members, by corporate

representatives. To be valid, notification of the appointment of a proxy must be received

not less than 48 hours before the General Meeting at which the person named in the

proxy notice proposes to vote.

As a Board, we have continued to adapt to ensure that we can effectively respond to a

multilateral world of volatility, uncertainty, complexity and ambiguity and the need to

keep our strategy under constant review. We would like to thank our colleagues, suppliers,

investors, lender group and customers for their continued support. I believe that your

Board has the right balance of skills and expertise to continue to support and challenge

management as we move forward in embedding our Compass strategy.

Jeff Nodland

Chairman

Directors’ report

89 McBride plc Annual Report and Accounts 2023

Board of Directors

The Board of Directors is collectively responsible for the long-term success of the Company.

Jeff Nodland

Chairman

Chris Smith

Chief Executive Offi cer

Mark Strickland

Chief Financial Offi cer

Appointed to Board:

26 June 2019

Skills and experience:

Jeff has 12 years’ experience in consumer chemicals manufacturing businesses,

including both private label and contract manufacturing activities. He was

most recently President and CEO of KIK Custom Products, one of North

America’s largest independent manufacturers of consumer-packaged goods

(including branded and private label products), retiring in February 2019 after

11 years in the role.

During that time Jeff led the fi nancial turnaround and growth of the business,

both organically and via acquisition.

Previously, Jeff held executive positions at specialty chemical businesses

including Hexion Speciality Chemicals, Inc., McWhorter Technologies and The

Valspar Corporation, with responsibility for activities at a number of chemical

plants in Europe.

Other roles:

Independent Non-Executive Director of EcoSynthetix. He is also a board

member of Pioneer Recycling Inc. and Trademark Cosmetics Inc.

Appointed to Board:

7 January 2015

Skills and experience:

Chris joined the Company in 2015 as Chief Financial Offi cer. During the

period 22 July2019 to 1 November 2019 he held the position of Interim

ChiefExecutive Offi cer and on 11June2020 he was appointed Chief

ExecutiveOffi cer.

Chris’s career spans over 30 years working in listed manufacturing businesses

in highly competitive global industries. He brings extensive experience of

international leadership in multi-site and multi-country organisations, covering

mostly the UK, Europe and Asia Pacifi c. From 2008 to 2014, Chris was Group

Finance Director at API Group plc, the AIM-listed specialty metallic fi lm, foil

and laminates producer. Other previous roles have included Scapa plc, where

he was Finance and IT Director for Europe and Asia, and also a number of

senior fi nance roles at Courtaulds plc, where he gained extensive international

experience, including overseas positions based in Germany and Hong Kong.

Appointed to Board:

4 January 2021

Skills and experience:

Mark has operated at the C-Suitelevel for more than 25years, possessing

extensive and hands-on fi nance experienceacross chemicals, logistics, retail/

own label food businesses, B2B/B2C services, insurance and fi nancial services.

More recently, Mark has been involved in a number of business turnarounds/

transformations and has delivered a number of successful private equity exits

(having worked with CBPE, Apollo and Promethean). Immediately prior to

joining McBride plc, he was Interim Chief Financial Offi cer at The AA plc.

Mark has an MBA from Manchester Business School and is a Fellow member

of CIMA.

Audit and Risk Committee Nomination Committee Remuneration Committee Chair

Directors’ report

90 McBride plc Annual Report and Accounts 2023

Board of Directors continued

Audit and Risk Committee Nomination Committee Remuneration Committee Chair

Alastair Murray

Independent Non-Executive Director

Regi Aalstad

Independent Non-Executive Director

(and Designated Non-Executive

Director for Employee Engagement)

Appointed to Board:

14 November 2019

Skills and experience:

Elizabeth has extensive experience within the consumer goods and retail

sectors, including senior management roles in operations and marketing at

Colgate Palmolive and Tesco. This, combined with her strong non-executive

experience, makes her an excellent addition to the Board.

Her past appointments include Senior Independent Director and

RemunerationCommittee Chair of Unite Group plc, Senior Independent

Director at J.D. Wetherspoon plc and Senior Independent Director and

Remuneration Committee Chair at Flybeplc.

Other roles:

Non-Executive Chair of Nichols plc, Senior Independent Director and

Remuneration Committee Chair at Dalata Hotel Group plc, Senior Independent

Director at Custodian REIT plc, Non-Executive Director andChair of the

AuditCommittee ofFresca Group Ltd.

Appointed to Board:

2 August 2021

Skills and experience:

Alastair, a chartered management accountant, brings a strong fi nancial

background, having operated as Chief Financial Offi cer of Premier Foods plc

until August 2019. He has recent and relevant fi nancial experience across a

number of listed companies, including Premier Foods plc, Dairy Crest plc and

The Body Shop International plc. As well as a background in fi nance, Alastair

has signifi cant experience in corporate strategy, restructuring and M&A.

Other roles:

Independent Member of the Audit and Risk Committee for the Department

for Education and Non-Executive Director and Chair of the Audit and Risk

Committee at Greencore Group plc.

Appointed to Board:

14 March 2022

Skills and experience:

Regi has extensive leadership experience in global fast-moving consumer

goods. She has held Regional General Manager and Vice President positions

with Procter & Gamble (P&G) in Europe, Asia, the Middle East and Africa. She

fi rst joined P&G in the Nordics within the laundry and cleaning sector. Regi is

currently a Non-Executive Director at several tech start-ups in Switzerland,

where she resides. She also works as an adviser to private equity companies

and as a coach.

Regi holds a Master of BusinessAdministration from the University of

Michigan, USA.

Regi has previously held Non-Executive Director positions at Telenor ASA,

Geberit AG and as chair of aninternational NGO.

Other roles:

Non-Executive Directorat Billerud AB, Gmelius SA and Plair SA.

Elizabeth McMeikan

Senior Independent

Non-ExecutiveDirector

Directors’ report

91 McBride plc Annual Report and Accounts 2023

The Board is pleased to report that the Company has applied the Principles and complied

with the Provisions of the UK Corporate Governance Code 2018 for its financial year

ended 30 June 2023.

The table below provides a guide to the most relevant explanations for how the Company

has complied with eachPrinciple.

Board leadership and Company purpose Page reference

A. An effective and entrepreneurial Board promotes the

long-term sustainable success of the Company, generating

value for shareholders and contributing to wider society.

pages 1 to 87,

90to 91 and

93to99

B. Purpose, values and strategy are set and align with culture,

which is promoted by the Board.

pages 15 to 20,

54, 93 to 99 and

119

C. Resources allow the Company to meet its objectives and

measure performance. A framework of controls enables

assessment and management of risk.

pages 59, 70, 75

to 86 and 111 to 114

D. Engagement with shareholders and stakeholders is effective

and encourages their participation.

pages 39 to 44

and 93 to 94

E. Oversight of workforce policies and practices ensures

consistency with values and supports long-term sustainable

success. The workforce is able to raise matters of concern.

pages 40, 54 to

58, 93 to 94 and

Division of responsibilities Page reference

F. The Chairman is objective and leads an effective Board with

constructive relations.

pages 89, 90 to 91

and 96 to 99

G. The Board comprises an appropriate combination of

Non-Executive and Executive Directors, with a clear division

ofresponsibilities.

pages 88 to 91

and 96

H. Non-Executive Directors commit appropriate time in line with

their role.

pages 99, 100, 106

and 115

I. The Company Secretary and the correct policies, processes,

information, time and resources support Board functioning.

pages 94 to 95

and 98 to 99

Composition, succession and evaluation Page reference

J. There is a procedure for Board appointments and succession

plans for Board and senior management which recognise merit

and promote diversity.

pages 88 and 100

to 105

K. There is a combination of skills, experience and knowledge

across the Board and its Committees. Tenure and membership

are regularly considered.

pages 90 to 91,

96, 98 and 100

to 105

L. Annual evaluation of the Board and Directors considers overall

composition, diversity, effectiveness and contribution.

pages 89and 103

Audit, risk and internal control Page reference

M. Policies and procedures ensure the independence and

effectiveness of internal and external audit functions.

TheBoard satisfies itself of the integrity of financial and

narrative statements.

pages 106 to 114

N. A fair, balanced and understandable assessment of the

Company’s position and prospects is presented.

pages 1 to 87, 114

and 150 to 174

O. Procedures manage and oversee risk, the internal control

framework and the extent of principal risks the Company is

willing to take to achieve its long-term strategic objectives.

pages 75 to 86, 95

and 106 to 114

Remuneration Page reference

P. Remuneration policies and practices are designed to support

strategy and promote long-term sustainable success, with

executive remuneration aligned to Company purpose, values

and strategic delivery.

pages 116 to 118

and 119 to 128

Q. A transparent and formal procedure is used to develop policy

and agree executive and senior management remuneration.

pages 116 to 118

and 119

R. Independent judgement and discretion is exercised over

remuneration outcomes taking account of the relevant

widercontext.

pages 116 to 118

and 119 to 128

The Code is published by the Financial Reporting Council, a full copy of which can be

viewed on its website www.frc.org.uk

Compliance with the UK Corporate Governance Code 2018

Directors’ report

92 McBride plc Annual Report and Accounts 2023

Corporate governance statement

Board leadership and Company purpose

Introduction

In this Annual Report we report on how we have applied the main Principles of the 2018

Code and followed its recommendations. A cross-referencing table to each Code Principle

can be found on page 92.

The Directors’ report complements the strategic report and explains how the Board

operates within a robust governance framework, which underlies the work of the Directors

to ensure that the Company’s purpose, values, strategy and culture are aligned. The Board’s

role is promoting the Group’s long-term success; setting its strategic aims and values;

supporting leadership to put them into effect; supervising and constructively challenging

leadership on the operational running of the business; ensuring a framework of prudent

and effective controls; and reporting to shareholders on the Board’s stewardship. We trust

that the Strategic and Directors’ reports together enable our stakeholders to assess the

effectiveness of those frameworks and the quality of theiroutcomes.

Business model, strategy and risks

Strategy

During the year, the Board’s focus shifted from immediate short-term margin recovery

actions, towards our Transformation programme and embedding our Compass strategy,

in order to ensure sustained margin improvement and revenue growth. Key to delivering

our strategy has been the agility and expertise within the divisional business teams. The

divisions have been continuously adapting to the dynamics, nature and speed of change

in their markets and to changes in raw material prices, exchange rates, inflation and sales

prices. There has been a lack of predictability and a multiplex of forces creating difficulties

in planning which sharpened the need to manage risks, foster change and solve problems.

As a Board, we reviewed the strategic direction of each division during the year. The review

again confirmed the Compass approach, divisional organisation and the strategic direction

of each division, whilst reaffirming the fact that our purpose, vision and values continue

to set the right objectives for the Group. On pages 46 to 53 we explain our approach to

enhancing the sustainability of our business, whilst outlining some of the key initiatives we

are taking to create value for our customers, employees, shareholders and society. Further

details on strategic topics assessed by the Board during 2023 can be found on page 95.

Purpose, values and culture

McBride plc’s purpose, values and strategy, Programme Compass, have sustainability at

their heart. Whilst we operate through five divisions, we have a single vision and purpose

and common values. Our guiding principles of focused profitable growth, backedby

effective execution and a strong McBride plc identity, provide strategic direction

towards achieving our vision and purpose and achieving long-term sustainable success.

As explained in the Strategic report, to fulfil our commitment to our stakeholders to

govern responsibly, we need to ensure that we have a full understanding of the impact

of our products and the way we conduct business, on people and the environment.

Oursustainability framework is therefore based around four objectives:

• product and design;

• production and operations;

• our people; and

• community and society.

McBride plc continues to encourage a sense ofbelonging and employee engagement

to ensure a motivated and productive workforce. We are continuing to focus on

the development of our people and on promoting a diverse and inclusive culture.

Themeasurements the Board uses to evaluate culture are evolving and include senior

leaders’ pulse surveys and monitoring HR statistics such as absenteeism, employee

turnover, learning and development completion rates and safety incidents. Some of

theseare already part of ournon-financial KPIs as set out in the Strategic report.

Stakeholder engagement

The Board is aware of its obligations both collectively and individually to promote the

success of the Company for the benefit of its stakeholders as a whole: its workforce,

its customers, its suppliers, its shareholders and its communities. Having an overall

understanding of our stakeholders’ perspectives and values, and considering them in

our decision-making and planning, is crucial to the Group’s continued success and we

value their broad range of perspectives. Comprehensive engagement allows us to make

informed decisions, while taking into account the consequences of our actions on the

different stakeholder groups. The Board is mindful of all of the Group’s stakeholders

whenmaking decisions of strategic importance.

Directors’ report

93 McBride plc Annual Report and Accounts 2023

Corporate governance statement continued

Board leadership and Company purpose continued

Stakeholder engagement continued

Workforce engagement

In accordance with Provision 5 of the 2018 UK Corporate Governance Code, the Board

appointed SteveHannam, Senior Independent Director, as the dedicated Non-Executive

Director for workforce engagement. On 16 November 2022, Steve Hannam stepped down

as a Director of the Company and, with effect from 17 November 2022, Regi Aalstad took

on the role of dedicated Non-Executive Director for workforce engagement and continues

with the good work that Steve started.

During the year, the Board visited a number of the Group’s manufacturing plants

and spent time with our colleagues. Engaging with the workforce, both formally and

informally, is a priority for the Board to ensure that we are aware of the views of the

workforce and can address any concerns they may have.

Customer engagement

Engagement with customers is at the operational level. The Board receives regular

updates from the CEO and members of the senior management team on customer sales

performance and ongoing customer engagement. Updates are also shared in relation

to evolving relationships with customers as we respond to market conditions. During

the course of the year, there continued to be global challenges with raw material price

increases, availability of certain raw materials and packaging, together with distribution

and wider macroeconomic supply chain issues. Engagement with our customers has

been vital at these times to ensure that we were able to agree selling price increases

that would reduce the impact of raw material price increases, whilst still fostering a good

working relationship. These updates assist the Board in developing and maintaining its

understanding of any potential issues and how these could be addressed.

Supplier engagement

Further details on engagement with our suppliers can be found on page 42.

Communities

The Board is conscious of the need to positively impactthe communities living

and working around us by providing employment within our communities and by

our increased focus on ESG initiatives. Further details of engagement within our

communitiescan be found onpage 44.

Shareholder engagement

The Board recognises the importance of regular, open and constructive dialogue with

shareholders throughout the year. The Board welcomes the opportunity to openly

engagewith shareholders and help them understand our business. Details of engagement

with shareholders can be found on page 43.

Case study

Dialogue between the Board and

employees is achieved through different

forums. Face-to-face discussions during

site visits as well as frequent interaction

with the divisional leadership teams

continued to be an effective method of

engagement during the year.

The Board recognises the importance of site visits in order to engage with

senior management and other employees on a face-to-face basis to continually

learn about the Company’s operations on a first-hand basis and gain an insight

into the successes and challenges in each of the Company’s businesses.

Duringthe year, visits were made to sites in Hammel and Holstebro, Denmark

and Foetz, Luxembourg.

The site visits provided the opportunity for informal discussions and deeper

two-way dialogue between Board members and individual colleagues working

in the manufacturing facilities and in roles such as Transformation, R&D and H&S.

The Chairman also visited two sites in France and our site in Spain to interact

with the management, employees and participate in a business review for our

Aerosol and Powders divisions.

Significant planning goes into each site visit. There is a robust agenda and

the Board works together with senior executives to create a broad list of

potential presenters, key topics for discussion and other elements that can

be incorporated into the agenda. More site visits are planned, to enable the

Board to build an appreciation of our colleagues’ experience of their working

environment and how this differs by site.

A meeting with the European Works Council employee representative

spokesperson in April 2023 provided the Board with greater appreciation of

the issues of importance to the workforce.

Directors’ report

94 McBride plc Annual Report and Accounts 2023

Corporate governance statement continued

Board leadership and Company purpose continued

Board activity in 2023

Below is a non-exhaustive list of areas of focus, actions and decisions taken by the Board

during the year.

Governance

and risk

Trading, financial and

operational performance

33%

Strategic development

opportunities

49%

Market and economic

environment

10%

Market and economic environment

Matters considered

• Pricing indexation reviews

• Sales and pricing activity reviews

• Purchasing performance and feedstock

forecasts

• Forward outlook for FX and interest

rates

• Market and customer development

updates

• Competitor activity analysis

• Raw material market updates

Strategic development opportunities

Matters considered

• Programme Compass – review of

divisional strategies and organisational

strategy

• Key operational project progress

reviews, including major capital

expenditure investment proposals

• Review of talent strategy

• Transformation programme –

operational efficiencies and process

improvements

• Overseeing strategic implementation

Trading, financial and operational performance

Matters considered

• Consideration of shareholder views and

analyst expectations

• Reviewed the funding and

management of the defined benefit

pension scheme

• Considered the share price

performance

• Banking and liquidity reviews

• Approval of amendment to RCF

• Considered the impact of raw material

price increases on the business

• Reviewed pricing strategy

• Divisional trading reports

• Financial management and

performance

• Approval of budget

• Banking, tax and treasury strategy and

policy reviews

• Review and approval of three-year

plans

• Approval of full-year and half-year

announcements and other trading

updates

• Annual Report and Accounts review

and approval

Governance and risk

Matters considered

• Received updates from the Audit

and Risk Committee,Nomination

Committee and Remuneration

Committee

• Approved the 2022 Annual Report and

Accounts

• Approved Committee Terms of

Reference

• Litigation updates

• Corporate governance horizon

scanning

• Approved the business to be

considered at the 2022 AGM

• Insurance programme renewal

• Corporate policies review and approval

• Health and safety updates

• Approval of the modern slavery

statement

In addition to the scheduled Board meetings, the Board regularly met for financial

updates during the period leading up to the agreement with the Company’s lenders to

amend the terms of the Group facilities.

Directors’ report

95 McBride plc Annual Report and Accounts 2023

The Board

The Board has collective responsibility for leading theGroup and promoting its long-term

success. Ithasthe prime role of confi rming the Group’s purposeand vision and agreeing

a sustainable strategy that supports its purpose. It is responsible for setting cultural

expectations that drive ethical and responsible business conduct.

As of 30 June 2023, the Board of Directors comprised the Non-Executive Chairman,

three independent Non-Executive Directors and two Executive Directors. Additional

responsibilities assigned to certain Non-Executive Directors are explained on page 97.

The composition of the Board is subject to review and is a responsibility delegated to the

Nomination Committee. Details of the tenure, gender, nationality and relevant experience

of Board members are set out below.

Board Committees

The Board is directly assisted in the discharge of its duties by three Board Committees:

the Nomination Committee, the Audit and Risk Committee and the Remuneration

Committee. The remit, authority and composition of the Committees is monitored to

ensure eff ective Board support. Each Committee provides dedicated focus to a defi ned

area of responsibility with the nature of delegated work ranging from a recommendation

being made to the Board or, if within its agreed authority, a fi nal decision being taken on

behalf of the Board. Further information on the specifi c role of each Committee is set out

in their respective reports on pages 100 to 145.

The Audit and Risk Committee

The Board has established an Audit and Risk Committee of independent Non-Executive

Directors. The Audit and Risk Committee is responsible for monitoring the integrity of the

fi nancial statements, reviewing the eff ectiveness of internal controls and risk management

systems, and overseeing the relationship with the independent auditors.

Details of its composition and work during the year are set out in the Audit and Risk

Committee report on pages 106 to 110. The Board is satisfi ed that the Chair of the Audit

and Risk Committee has recent and relevant fi nancial experience including competence

inaccounting.

The Remuneration Committee

The Board has established a Remuneration Committee, the composition and role of

whichis set out in the Remuneration report. The Remuneration Committee ensures

that the remuneration policies and practices are designed to support the Company’s

strategy and promote long-term sustainable success. Further details of the work of

theRemuneration Committee throughout the year can be found on pages 115 to 118.

The Nomination Committee

The Board has established a Nomination Committee. The Nomination Committee is

responsible for setting out and monitoring the Board’s succession plans, reviewing

composition and diversity of the Board and proposing new appointments to the Board.

Further detail of the composition of the Nomination Committee and its work during the

year can be found on pages 100 to 105.

Operational management

The management of the Group’s business activities is delegated to the CEO, who is

ultimately responsible for establishing objectives and monitoring executive actions and

for the overall performance of the business. The day-to-day management and global

governance of the business isdelegated to members of the Executive Committee on a

structured functional basis.

As at 30 June 2023, the membership of the Executive Committee comprised the Chief

Executive Offi cer, the Chief Financial Offi cer, the Divisional Managing Directors of the

three largest divisions, namely Liquids, Unit Dosing and Powders, the Chief Transformation

Offi cer, the Chief HR Offi cer and the Chief Legal Offi cer and Company Secretary.

Corporate governance statement continued

Division of responsibilities

Tenure Gender Relevant experience Nationality

0-5 years 5

6-8 years 1

Manufacturing 5

Retail 1

Chemicals 1

Finance 4

Norwegian 1

American 1

British 4

Male 4

Female 2

Board composition as at 30 June 2023

Directors’ report

96 McBride plc Annual Report and Accounts 2023

Roles within the Board

The roles of the Chairman and the Chief Executive Officer are separate and there is a clear division of responsibility between the executive and non-executive members of

the Board. Details of these responsibilities are set out below:

Chairman of the Board

Responsible for:

• overall leadership and governance of the Board, ensuring it operates effectively in terms

of agenda setting, information management, induction, development and performance

evaluation;

• maintaining a focus on strategy, performance and value creation and the assessment of

significant risks in the implementation of strategy;

• ensuring the Board as a whole has a clear understanding of shareholder, customer and

workforce views;

• promoting a healthy culture of challenge and debate at Board and Committee meetings

and encouraging constructive debate and decision-making;

• fostering effective relationships and open communication between all Directors;

• ensuring both Board and shareholder meetings are properly conducted; and

• developing a supportive working relationship with the Chief Executive Officer.

Chief Executive Officer

Responsible for:

• effective leadership and development of the executive management team and operational

running of the Group;

• developing and implementing the Group’s business model and strategy;

• effectively communicating the Group’s strategy and performance; and

• building positive relationships by engaging appropriately with all internal and external

stakeholders.

Chief Financial Officer

Responsible for:

• deputising for the Chief Executive Officer;

• proposing policy and actions to support sound financial management, including in

relation to funding and netdebt;

• leading the Finance, Tax, Treasury and IT functions;

• leading on mergers and acquisitions; and

• overseeing the defined benefit pension scheme.

Senior Independent Director

Responsible for:

• providing a sounding board for the Chairman and acting as an intermediary between

other Directors when necessary;

• evaluating the performance of the Chairman on behalf of the Directors; and

• being available to shareholders, where contact through the Chairman or Executive

Directors is not appropriate.

Company Secretary

Responsible for:

• compliance with Board procedures and supporting the Chairman of the Board;

• ensuring the Board has high-quality information, adequate reading time and the

appropriate resources;

• advising and keeping the Board updated on corporate governance developments;

• considering Board effectiveness in conjunction with the Chairman;

• facilitating the Directors’ induction programmes and assisting with professional

development; and

• providing advice, services and support to the Directors as and when required.

Non-Executive Directors

Responsible for:

• providing the skills, experience and knowledge toassist the Board’s decision-making;

• challenging and assisting with developing and establishing objectives and monitoring

theGroup’s business model and strategy;

• measuring and reviewing the performance of the Executive Directors;

• providing independent insight and support and advice to the Executive Directors;

• reviewing Group financial information and overseeing the effectiveness of the

Company’sinternal controls;

• reviewing succession plans for Board Directors and senior managers and supporting

inclusion and diversity; and

• setting policy in respect of Executive Director remuneration.

Corporate governance statement continued

Division of responsibilities continued

Directors’ report

97 McBride plc Annual Report and Accounts 2023

How the Board operates

Boardroom culture

The Board recognises the importance of establishing the right culture and values and

communicating this message consistently throughout the organisation. It is important

thatthe Board provides strong and effective leadership, constructive challenge and

accepts collective accountability for the long-term sustainable success of the Group.

Inso doing, it will continue to drive and deliver our strategy in the best interests of

allourstakeholders.

A strong feature of the Board’s effectiveness in delivering the Group’s strategy is our

inclusive and open style of interaction which benefits from a free flow of information

between the Executive and Non-Executive Directors. The size of our Board encourages

Directors to discuss matters openly and freely and to make individual contributions

through the exercise of their personal skills and experience. No individual has unfettered

powers of decision making.

All Directors communicate with each other on a regular basis and contact with the

Group’s senior managers is sought and encouraged. In-person Board meetings have

beenheld at various site locations across the Group in 2023.

Independence

All Non-Executive Directors have been appointed fortheir specific areas of knowledge

and expertise. They are independent of management and exercise their duties in good

faith based on judgements informed by their personal experience. This ensures that

matters can be debated constructively in relation to both the development of strategy

and assessment ofperformance against the objectives set by the Board.

It is believed that the balance between non-executive and executive representation

continues to encourage healthy independent challenge.

Powers of Directors

The powers of the Directors are determined by the Articles of Association (‘Articles’),

which are available on our website, UK legislation, including the Companies Act 2006,

andany directions given by the Company in a General Meeting. The Directors are

authorised by the Company’s Articles to issue and allot ordinary shares and to make

market purchases of its own shares. These powers are referred to shareholders for

renewalat each AGM.

The appointment and replacement of Directors is governed by the Company’s Articles,

the 2018 Code, theCompanies Act 2006 and related legislation.

The Directors may from time to time appoint one or more Directors. As required by the

Articles, any Director appointed during the year will be required to step downand stand

for re-election at the next AGM.

Any amendments to the Articles can only be made by special resolution at a General

Meeting of shareholders.

Subject to the Articles and the Companies Act 2006 and any directions given by special

resolution, the business of the Company is managed by the Board who may exercise all

the powers of the Company.

Conflicts of interest

In line with the Companies Act 2006 and the Articles, the Company has a strict process

inplace to manage conflicts of interest.

A Director who becomes aware that they or their Connected Persons have an interest in

an existing or proposed transaction with the Company is required to declare that interest

at a meeting of the Board. Suchdisclosures are recorded and compliance reviewedat

each meeting. Under the powers granted by the Articles, the Board is authorised to

approve suchconflicts where appropriate.

No Director had a material interest at any time in any contract of significance with the

Company other than their service contract or letter of appointment.

Re-election of Directors

The Board is satisfied that all the Directors standing for re-election perform effectively

and demonstrate commitment to their roles. This has been demonstrated during the year

by the willingness of the Directors to attend additional Board meetings as well as from

thegeneral support they have given to the Executive Directors and senior managers.

When appropriate, any changes to the commitments of any Director are considered in

advance by the Board to ensure they are still able to fulfil their duties satisfactorily.

Although the Articles require the Directors to submit themselves for re-election at every

third AGM, in line with the requirements of the 2018 Code, all Directors aresubject to

annual re-election at the AGM.

The biographies for each Director seeking re-election are set out in the 2023 notice of

meeting. These provide details of the skills and experience which demonstrates why each

Director’s contribution is, and continues to be, important to the Company’s long-term

sustainable success.

The Board, its Committees and the individual Directorsparticipate in an annual

performance review. Furtherdetails of the performance review process can be found in

the Nomination Committee report on pages 103 and 104.

Theperformance review process confirmed thecontinuing independent and objective

judgement of all the Non-Executive Directors. Theprocess also confirmed that the

performance of all the current Directors standing for re-appointment continued to be

effective and demonstrated that the Board has the necessary range of skills, knowledge

and diversity of thought.

Corporate governance statement continued

Division of responsibilities continued

Directors’ report

98 McBride plc Annual Report and Accounts 2023

Policies

Whilst the Board takes overall responsibility for approving Group policies, including those

relating to business ethics, health and safety, environmental matters, anti-bribery and

corruption, and whistleblowing, their implementation is delegated to the Chief Executive

Officer and cascaded throughout the organisation via the Executive Committee and the

various functional teams.

Time commitment

The expected time commitment of the Chairman and Non-Executive Directors is agreed

and set out in writing in the letters of appointment confirming their position. The existing

demands on a Non-Executive Director’s time are assessed on appointment to confirm

their capacity to take on the role. The Nomination Committee reviews Directors’ external

commitments annually to ensure they still have sufficient capacity to fulfil their role.

Further appointments which could impair their ability to meet these arrangements

can only be accepted following approval by the Board. Thetaking on of any external

appointment by an Executive Director is subject to Board consent.

There were eight scheduled meetings in the year to 30June 2023. Scheduled meetings

of the Board follow an agreed format, with agendas developed by the Chairman, Chief

Executive Officer and Company Secretary, who consider the Board’s annual plan of

business and the current status of projects, strategic workstreams and overarching

operating content. Adequate time is allocated to support effective and constructive

discussion of each item. An electronic resources portalallows efficient navigation of

Boardpapers.

Board and other meetings

Board papers are prepared and issued prior to each Board meeting to allow Directors

sufficient time to givedue consideration to all matters. Directors are able to take

independent professional advice, if necessary, atthe Company’s expense.

The Board holds a minimum of seven meetings a year at regular intervals. Additional

meetings were held during the financial year 2023 toreceive and consider financial

updates, and updates on progress with the Company’s pricing initiatives.

From time to time, the Board authorises the establishment of an additional committee or

sub-committee to consider and, if thought fit, approve certain items of business.

During the year, the Non-Executive Directors have met without Executive Directors being

present after each scheduled Board meeting. The Senior Independent Director and the

Non-Executive Directors have also conversed by telephone without the presence of the

Chairman as part of the Board performance evaluationexercise.

The Corporate governance statement was approved by the Board on 18 September 2023

and signed on its behalf by:

Jeff Nodland

Chairman

Corporate governance statement continued

Division of responsibilities continued

Attendance at meetings year ended 30 June 2023

Number of scheduled Board meetings held: 8

Members of the Board

Number of

scheduled

meetings

attended

Eligible to

attended

Jeff Nodland

Chairman 8 8

Chris Smith

Chief Executive Officer 8 8

Mark Strickland

Chief Financial Officer 8 8

Regi Aalstad

Independent Non-Executive Director 8 8

Steve Hannam

(1)

Senior Independent Non-Executive Director 4 4

Igor Kuzniar

(1)

Non-Executive Director 7 8

Elizabeth McMeikan

Independent Non-Executive Director 8 8

Alastair Murray

Independent Non-Executive Director 8 8

(1) To date of resigning as a Director.

Directors’ report

99 McBride plc Annual Report and Accounts 2023

Dear shareholder

On behalf of the Nomination Committee, I am pleased to present the Nomination

Committee report for the year ended 30 June 2023.

The Committee’s key objective is to ensure that the Board comprises individuals with

theappropriate skills, knowledge, experience and diversity to ensure that McBride plc

canfulfi l its purpose, achieve its vision andexecute its strategy.

On 16 November 2022, Steve Hannam stepped down from the Board as Non-Executive

Director and Senior Independent Director following the 2022 AGM. In line with the

Committee’s succession plans, the Committee recommended to the Board that

ElizabethMcMeikan be appointed to the role of Senior Independent Director following

Steve’s retirement. Elizabeth is an experienced Senior Independent Director and has

transitioned into the role smoothly.

On 31 May 2023, Igor Kuzniar stepped down from the Board as a non-independent

Non-Executive Director, being the representative of our largest shareholder, Teleios

Capital Partners LLC. On stepping down, Igor expressed his confi dence in the leadership

team, the Company’s strategic vision and the eff ective governance process. Igor is not

being replaced.

Composition of the Nomination Committee

I chair the Nomination Committee and was regarded as independent on appointment.

I will not chair the Committee when it is dealing with matters of succession to the

Chairmanship of the Board. The Committee also comprises three other independent

Non-Executive Directors: Elizabeth McMeikan, Alastair Murray and Regi Aalstad.

Nomination Committee report

Composition, succession and evaluation

Committee membership and meetings 2023

The Committee held two scheduled meetings and one ad hoc meeting, to agree Board

role changes, during the year. Details of attendance by all members at scheduled

meetings can be found below:

Members

Number of

meetings

attended

(quorum is

three members)

Eligible

to attend

Jeff Nodland (Chair) 2 2

Regi Aalstad 2 2

Steve Hannam

(1)

1 1

Igor Kuzniar

(2)

2 2

Elizabeth McMeikan 2 2

Alastair Murray 2 2

(1) Steve Hannam stepped down as a Non-Executive Director on 16 November 2022.

(2) Igor Kuzniar stepped down as a Director on 31 May 2023.

This year the

Committee focusedon

improvement in the

areas identifi ed through

theBoardevaluation.

Jeff Nodland

Chair of the Nomination Committee

Directors’ report

100 McBride plc Annual Report and Accounts 2023

Induction, development and support

On appointment, all new Directors undergo formal and in-depth induction programmes to

provide them with an appropriate understanding of the business and what is expected of

them in their role as a Director. This involves site visits, meetings with senior management

and provision of access to key documents relating to their role. External training may also

be provided by independent legal advisers in relation to the key duties ofDirectors and

required governance principles.

The Board recognises the importance of ongoing training and development to ensure

Directors have the skills and knowledge to discharge their duties eff ectively. This can take

the form of briefi ng papers and/or presentations on strategic, regulatory and legislative

developments and other topics of specifi c relevance to ensure that the Directors

continually update their knowledge of, and familiarity with, the Group’s business and

the markets in which we operate. During the year, the Board was provided with external

training on its reporting obligations under the Task Force on Climate-Related Financial

Disclosures framework.

All Directors have access to the Company Secretary, who is responsible for ensuring that

Board procedures are followed and that the Company complies with all applicable rules,

regulations and obligations governing itsoperations.

Key responsibilities of the Nomination Committee

Details on our key responsibilities can be found below and inour Terms of Reference at

www.mcbride.co.uk

Board composition

• Review the ongoing composition of the Board and its Committees to ensure they have

the necessary expertise and experience to discharge their role now and in the future.

• Lead the appointment process for new Directors.

Succession planning and talent management

• Ensure adequate plans are in place for eff ective succession planning at management

and Board level.

• Review the measures in place for the development and retention of senior

management.

Diversity and inclusion

• Ensure a balance of skills, knowledge, experience and diversity on the Board.

• Encourage diversity throughout the Group and oversee a diverse pipeline for

succession.

• Review the Board’s monitoring of diversity and inclusion initiatives to ensure

compliance with the Board’s policy.

Governance

• Oversee the Board performance and evaluation process.

• Agree an action plan addressing the results of the annual performance evaluation

process.

Nomination Committee report continued

Composition, succession and evaluation continued

Board site visit

Middleton

Directors’ report

101 McBride plc Annual Report and Accounts 2023

Nomination Committee report continued

Composition, succession and evaluation continued

Committee activities

Our principal activities during 2023 and up to the date of approval of this Annual Report were as follows:

Board composition Discussed and recommended proposed changes to the Board of Directors.

Re-election of Directors After considering the individual contributions made by the Directors, recommended to the Board that all Directors be proposed for

re-election at the 2023 AGM.

Review of performance and effectiveness

during 2023

Undertook a review of the Board and the Committee’s performance and effectiveness as part of the Board evaluation.

Conflicts of interest and independence Informed the Board of updates to the Conflicts of Interest Register.

During the year, all independent Non-Executive Directors were considered to have maintained independence throughout the year.

External commitments and Director

performance review

As a general principle, the Committee takes the view that Non-Executive Directors should have no more than four, and for Executive

Directors no more than one, additional listed mandates.

For example, the Committee concluded that the appointment of Elizabeth McMeikan as Chair of Nichols plc would still leave her with

sufficient time to devote to the Company. Consideration was given to Elizabeth’s current listed mandates, and although she now has

four listed mandates (with Chair positions being allocated two mandates), the Committee was comfortable that she still had sufficient

time to devote to the Company and this new position would not have a detrimental effect on her performance as a Director.

The Board has concluded that each Non-Executive Director has sufficient time to discharge their duties as a Director of the Company,

taking into consideration their external appointments and commitments. The Committee will continue to review the external

commitments of each Director on an annual basis.

Details of the Directors’ external commitments can be found on pages 90 and 91.

The Chairman assessed the performance of all Directors during the course of the year and met with each Non-Executive Director to

discuss their performance and contribution to the Board. Directors’ duties under section 172 Companies Act 2006 are referenced in

theminutes at the beginning of every meeting.

The Committee reviewed and considered the performance and contribution made by Elizabeth McMeikan as part of a mid-term

review conducted pursuant to the succession planning procedures. The Committee confirmed Elizabeth’s effectiveness in the role and

acknowledged her valuable contribution to Board debates and effective chairmanship of the Remuneration Committee. The Committee

approved an additional term of three years.

Board Inclusion and Diversity Policy The Board-level policy on inclusion and diversity was reviewed to ensure the ongoing relevance of Board membership to a global

manufacturing company in today’s world.

Talent and capability The Board received an update on executive and senior leader talent and succession planning, which enabled the Directors to monitor

the internal talent pipeline and provide feedback. This update included analysis of the gender diversity of the talent pool, with a view

towards continuing to improve diversity over the longer term.

Directors’ report

102 McBride plc Annual Report and Accounts 2023

Assessing Board performance

Progress against 2022 actions

In last year’s Annual Report, the Board reported on the key areas of focus from the 2022 Board evaluation. The table below sets out the Board’s progress in the key areas of focus.

Key areas of focus from

our 2022 evaluation Actions to be taken throughout the year Page references

Value creation and strategy More time to be set aside in Board meetings for strategic discussions;

to identify Group strategic priorities and to assess and support the

implementation of agreed strategic objectives.

More time was devoted to strategic discussions than in previous years, as

demonstrated on page 95.

Talent management and

culture

Continue to engage with employees through site meetings,

manufacturing plant visits and social occasions to provide the Board with

better oversight of any issues.

Continue to focus on talent and capability across senior leadership and

developing further bench strength.

The Board has continued to engage with employees through

engagement with leadership teams and reviewing high level talent

assessments, which has provided the Board with invaluable insight into

the talent across the business. Further details are provided on page 102.

Oversight of ESG Oversight of ESG ambitions and targets and how to further embed ESG

intostrategy.

The Board’s oversight of social and environmental risks, its monitoring of

KPIs and of the level of resource, competence and commitment applied

to the management of ESG issues to ensure a culture of continuous

improvement is set out on pages 45 to 59.

2023 Board evaluation process

As a constituent of the FTSE Fledgling, McBride plc is not required to conduct an externally facilitated Board evaluation; however, the Board recognises the importance and benefits of

continually monitoring the Board’s effectiveness. In April 2023, the Board conducted an online evaluation, led by the Chairman. Theevaluation used Independent Audit’s online system,

Thinking Board

, as the basis of the review. The respondents consisted of the Board and the Company Secretary, who anonymously answered questions derived from the Thinking Board

library and discussions with the Independent Audit team where particular focus was required. A report was prepared by Independent Audit based on the results of the self-assessment.

Nointerviews or document reviews were conducted as part of this exercise, and the report was based solely on the information gathered through the questionnaires.

The evaluation covered themes regarding the operation of the Board, value creation and strategy, talent and culture, management of risk, Board composition and dynamics, the

Chairman and the Committees. Subsequently, the Chairman held one-to-one discussions with each Director to discuss areas of focus for the year ahead.

The Senior Independent Director, Elizabeth McMeikan, also led a meeting of the Non-Executive Directors (without the Chairman being present) to appraise the Chairman’s performance

separately to the Board evaluation. Elizabeth discussed the feedback and any areas of development with the Chairman.

Nomination Committee report continued

Composition, succession and evaluation continued

Directors’ report

103 McBride plc Annual Report and Accounts 2023

Nomination Committee report continued

Composition, succession and evaluation continued

Assessing Board performance continued

2023 Board evaluation findings

The Board’s main strengths identified by the evaluation were:

• the calibre, expertise and experience of the Directors;

• collegiate and productive Board relationships with Non-Executive Directors who are engaged and seek out opportunities to support the Executive Directors;

• open and inclusive discussions;

• effectiveness of the Committees; and

• effective chairmanship of the Board and the Committees.

Areas of focus for 2024 Commentary and actions

Macro and megatrends To adapt the Board agenda to review more fully the strategic impacts from macro and megatrends including:

• challenge the strength and resilience of the business model and emerging technologies;

• ESG influences; and

• consumer and retailer developments.

Corporate resilience Reviewing business readiness for any future challenges and opportunities, including:

• crisis management including cyber risks;

• margin and pricing management in a volatile macro environment; and

• medium-term validity of key strategic initiatives.

Information and support Improve Board papers through better use of summaries and appendices and clearer positioning.

Succession planning

During the year, the Committee continued to develop its succession plan for all Board roles to ensure that appointments are made of individuals who have the appropriate skills,

experience and personal characteristics.

Our succession planning involves the following steps:

Identify those

roles that

are subject

to formal

succession

planning.

4.3.2.1.

Define the skills,

competencies

and experience

required of

individuals

to undertake

thoseroles

Identify

internal talent

or external

sources

to which

recruitment will

be directed

Assess the

individuals to

undertake the

roles

Appoint

Individuals

Identify those

roles that

are subject

to formal

succession

planning

Directors’ report

104 McBride plc Annual Report and Accounts 2023

Nomination Committee report continued

Composition, succession and evaluation continued

Succession planning continued

In 2021 the Board approved a formal succession plan considering the Group’s strategy and

structure, the size and composition of the Board, the terms of appointment for the current

Directors and the skills and expertise that McBride plc will need going forward. Short-term

and medium-term plans were put in place for all roles subject to formal succession

planning. The Committee has continued to work towards this succession plan throughout

2023 and identified the need for new skills such as a knowledge of cyber security and an

understanding of the commodity markets.

Over the next year, the Committee will continue to review the succession plan to ensure

that it continues to support the development of a diverse pipeline with particular focus on

key senior employees. Where internal candidates are identified, ongoing development will

be put in place to ensure that they are prepared for the role.

Board appointments and election procedures

The Committee has overall responsibility for leading the process for new appointments to

the Board and ensuring that the Board has Non-Executive Directors with relevant, diverse

and complementary skills.

Any new Directors are appointed by the Board and, in accordance with the Company’s

Articles of Association, they must be elected at the next AGM to continue in office.

Allexisting Directors retire by rotation and stand for re-election every year.

Diversity and inclusion

In 2023, the Committee reviewed the Board Diversity Policy, which sets out a commitment

to encourage diversity and inclusion in the boardroom. The Policy sets out to ensure that

appointments are based on the best individual for the role and that the Board’s composition

should have an appropriate balance of skills and diversity to meet the requirements of the

business. TheCommittee considers that it has successfully achieved diversity in terms of

differing experience, education, background, thinking styles and gender, both on the Board

and Executive Committee. However, the Committee acknowledges it must continue to move

forward to embrace all aspects of diversity. As a global company with manufacturing sites

in the EU and Asia, with five non-UK nationals on the Board and Executive Committee, the

Company is well placed to continue on this journey.

At 30 June 2023, two members of the Board were female (33.3%), three out of eight

members (37.5%) of the Executive Committee were female and 27.1% (13 out of 48) of

thedirect reports to the Executive Committee were female.

At 30 June 2023, no members of the Board or the Executive Committee were from a

non-white background.

The objectives of the Board Diversity Policy are reviewed and recommended to the

Board for adoption annually by the Committee. This year the Board updated the Policy

as it continues to strive for greater diversity on the Board and at executive and senior

management level. The Board’s objectives are set out opposite:

Objective Implementation and progress

To ensure so far as possible

that the proportion of

women on the Board is not

less than40%.

The appointment of Regi Aalstad increased the

proportion of women on the Board and following

the departure of Igor Kuzniar the proportion is 33%.

McBride continues to work towards its diversity target

of 40% female representation. The Committee is hopeful

that any future recruitment will enable the Board to

exceed this target.

To ensure that at least

one of the senior Board

positions (Chair, CEO, SID

or CFO) is a woman.

In November 2022, Elizabeth McMeikan was appointed

to the role of Senior Independent Director following

Steve Hannam stepping down from the Board.

To ensure so far as possible

that the proportion of

women within the Executive

Committee and their direct

reports is not less than 25%.

The minimum target for female representation within

the Executive Committee and their direct reports has

been achieved and maintained throughout the year.

TheCompany will continue to ensure that there are

no barriers for women rising to senior positions within

McBride.

To ensure so far as possible

that there is one member of

the Board from a minority

ethnic background.

During the search for our most recently recruited

Non-Executive Director, our search partner, Warren

Partners, uncovered ethnically diverse talent using

technology such as LinkedIn and other online search

engines, identifying potential candidates across a list

of target companies as well as assessing ‘first-time’

Non-Executive Directors or candidates operating below

Board level. We will continue to ensure that these

methods are used during any future recruitment to

identify ethnically diverse talent to enable the Board to

achieve this target.

The Committee will continue to make recommendations for new appointments to

the Board based on the best individual for the role, whilst ensuring that the Board’s

composition has an appropriate balance of skills and diversity to meet the requirements

ofthe business.

2024 objectives

The Committee’s focus for 2024 will be on strategic opportunities and drivers and ensuring

the business has the resilience and preparedness to withstand external challenges and

leverage our technology, capabilities and people to capture future opportunities.

Jeff Nodland

Chair of the Nomination Committee

Directors’ report

105 McBride plc Annual Report and Accounts 2023

Dear shareholder

On behalf of your Board, I am pleased to present the Audit and Risk Committee report for

the year ended 30June 2023.

The Committee is responsible for monitoring and reviewing the integrity of the

Group’s fi nancial reporting systems and for assessing and providing assurance on the

adequacy and eff ectiveness of internal control policies and procedures in place for the

identifi cation, assessment and reporting of risk. The Committee also reviews and oversees

the relationship with the independent auditors, PricewaterhouseCoopers LLP (PwC),

including the approval of the terms of their engagement and fees, their independence

and expertise, and the eff ectiveness of the audit process. In addition to the disclosure

requirements relating to audit and risk committees under the Code, the Committee’s

report sets out areas of signifi cant andparticular focus for the Committee.

Over the course of 2023, we carried out our usual work as set out on page 108.

Inaddition,given the unprecedented infl ationary impact on commodity prices, driven

fi rst by post-Covid-19 supply chain disruptions and more recently by the associated

economic and infl ationary impacts of the war in Ukraine, we gave special consideration

to the impact of macroeconomic conditions and the external environment in our principal

geographies and on the Group as a whole, especially regarding Group funding.

Composition of the Audit and Risk Committee

I served as Chair of the Committee and Regi Aalstad and Elizabeth McMeikan served

as members of the Committee throughout the year. Steve Hannam stepped down from

theBoard and the Committee on 16 November 2022.

For the purposes of the UK Corporate Governance Code, I qualify as a person with

‘recent and relevant fi nancial experience’ being a Fellow of the Chartered Institute of

Management Accountants and having previously been the Chief Financial Offi cer for

Premier Foods plc. I have previously held other senior fi nance roles at Dairy Crest plc

andThe Body Shop International plc.

Audit and Risk Committee report

Audit, risk and internal control

Committee membership and meetings 2023

The Committee met six times in the year ended 30June2023, at appropriate times in

the fi nancial reporting and audit cycle. Details of attendance can be found below:

Members

Number of

meetings

attended

(quorum is

three members)

Eligible

to attend

Alastair Murray (Chair) 6 6

Regi Aalstad 6 6

Steve Hannam

(1)

4 4

Elizabeth McMeikan 6 6

(1) Steve Hannam stepped down as a Non-Executive Director on 16 November 2022.

During the year we gave

special consideration

to the impact on the

Group of macroeconomic

conditions and the

external environment.

Alastair Murray

Chair of the Audit and Risk Committee

Directors’ report

106 McBride plc Annual Report and Accounts 2023

Audit and Risk Committee report continued

Audit, risk and internal control continued

Composition of the Audit and Risk Committee continued

All members of the Committee are independent Non-Executive Directors, with a broad

range of fast-moving consumer goods (FMCG), commercial, operational and financial

experience relevant to the Group’s business.

In addition to the Committee members, the Chief Executive Officer, Chief Financial Officer,

Chairman, Group Financial Controller, Head of Internal Audit and independent audit

partner are regularly invited to attend and present at the Committee’s meetings. During

the year, PwC attended all six meetings.

During the year I met separately with representatives of the independent auditors in the

absence of the Executive Directors. I also had regular meetings with senior members

of the Finance team and the Head of Internal Audit. This provided me with a better

understanding and insight of the key risk and control issues raised, and ensured sufficient

time was devoted to them at subsequent meetings.

Effectiveness of the Audit and Risk Committee

As part of the annual Board evaluation, the effectiveness of the Committee was reviewed

by questionnaire. Itwas determined that the Committee continues to be effective in its

role. More details on how the annualBoard evaluation was conducted can be foundon

pages 103 and 104 of the Nomination Committee report.

The Board is satisfied that each of the Committee members is independent, and that

the Committee as a whole has the necessary commercial, financial and audit expertise

required to fulfil its responsibilities. The members of the Committee have a wide range of

business, international and governance expertise both within the sector and elsewhere,

as shown in their biographies on pages 90 and 91. The Board has determined that the

Committee has competence relevant to the sector in which theGroupoperates.

Independent auditors

The Audit and Risk Committee has primary responsibility for making recommendations to

the Board on the appointment, re-appointment and removal of the independent auditors.

This is submitted to shareholders for their approval at the Company’s AGM.

As part of its oversight of the independent auditors, the Committee has undertaken its

annual assessment of the auditors and audit process. This included the Committee’s own

evaluation of the reports and services received, such as the scope, strategy, approach,

audit hours, quality of reports presented to the Committee, value added, and outcome of

the year-end audit. The Committee also considered the professionalism, competence and

objectivity, constructive challenge of management and key judgements of the auditors.

In its assessment the Committee took account of the views of management and the

Committee’s own experience and interactions with the independent auditors throughout

the year.

The Committee has sought assurance from PwC of their compliance with applicable

ethical guidance and, in addition, has taken account of the appropriate independence

andobjectivity guidelines.

The Committee considers the risk of PwC withdrawing from the market as remote, since

they are one of the top four accounting firms globally.

The Committee has considered and approved the terms of engagement and fees of PwC

for the year ended 30June 2023. Fees payable by the Group to PwC totalled £1.3million

(2022: £1.1m) in respect of audit services. There were no contingent fee arrangements

withPwC.

Audit tenure

PwC was appointed as the Group’s auditors on 14November 2011. In accordance with the

Companies Act 2006 and the EU Audit Regulation forming part of UK law (as amended

by the EU Exit Regulations), a full tender for the appointment of the independent audit

firm was undertaken during 2021, as a result of which, PwC were re-appointed as our

independent auditors from 2022.

The Committee remains satisfied with the level of independence, objectivity, expertise,

fees, resources and general effectiveness of PwC and, accordingly, the Committee

recommends (and the Board agrees) that a resolution for the re-appointment of PwC as

independent auditors for the Company should be proposed at the forthcoming AGM in

November 2023. The independent auditors are required to rotate the audit engagement

partner every five years. Hazel Macnamara began her appointment as audit engagement

partner in July 2023, so this is her first audit cycle.

Non-audit services

The Company maintains a detailed policy on the engagement of the independent auditors

for non-audit services, designed to preserve their independence when performing the

statutory audit. To avoid any conflict of interest, types of non-audit work are categorised

asthose:

• for which the auditors can be engaged without referral to the Committee;

• for which a case-by-case decision is necessary; and

• from which the independent auditors are excluded.

In accordance with this policy, other providers are considered for non-audit work.

Suchwork is awarded on the basis of expertise, service and cost. Thispolicy is regularly

reviewed and a copy is available from the Group’s website at www.mcbride.co.uk.

Directors’ report

107 McBride plc Annual Report and Accounts 2023

Non-audit services continued

Fees payable by the Group to PwC totalled £2,000 (2022: £2,000) in respect of non-audit

services, equating to 0.1% of audit fees received by PwC during the year (2022: 0.2%).

These non-audit services involved other non-audit assurance services. TheCommittee

is of the view that this has not threatened the independence or objectivity of the

independent auditors.

The Company’s policy on the employment of former employees of the independent

auditors was adhered to during the financial year. No such employees were employed

byany company in the Group.

In all other respects, the Committee is satisfied that the independent auditors have

exercised an appropriate level of scepticism and challenge in relation to the Company’s

control environment.

Responsibilities of the Audit and Risk Committee

The Committee’s principal responsibility is to monitor the Group’s financial reporting

process and the integrity of the Group and Company financial statements, reviewing

anysignificant financial reporting judgements contained therein.

Additional responsibilities of the Committee are:

• to review the formal announcements of the Group’s performance;

• to consider the Group’s viability statement;

• to review the Internal Audit programme and the consideration of findings of any

internal investigations and management’s response, and to review the effectiveness

ofthe Internal Audit function;

• to review and monitor the effectiveness of the Group’s internal controls and risk

management systems in respect of finance, operations and compliance; and

• to oversee the appointment, objectivity, independence, effectiveness and remuneration

of the independent auditors, including the policy on the engagement of the

independent auditors for non-audit services.

The main roles and responsibilities of the Committee are set out in its Terms of Reference.

The Committee is authorised by the Board to investigate any matters within its Terms

of Reference. The Terms of Reference are reviewed annually to ensure that they are

aligned with best practice, including the recommendations of the ICSA: The Chartered

Governance Institute. A copy ofthe Committee’s Terms of Reference is available on the

Group’s website www.mcbride.co.uk.

Committee activities

The Committee received regular reports on the Group’s trading performance, as well

as progress on both the interim and full-year financial statements. Papers and other

regular updates from both management and PwC have also been provided to assist the

Committee in assessing whether suitable accounting policies have been adopted and

appropriate judgements made bymanagement.

The significant matters considered, and judgements undertaken during the financial year,

are set out on pages 109 and 110. The Committee is satisfied that the presentation of

the financial statements is appropriate and in accordance with the Group’s accounting

policies.

The Committee concluded that there were no major concerns that had not been

addressed, that there was no evidence of systemic control weaknesses and that the

overall control environment was acceptable for a group of McBride’s size and nature.

Going concern and viability

The Code requires the Board to state whether it considers it appropriate to adopt the

going concern basis of accounting in preparing the financial statements and identify any

material uncertainties to the Company’s ability to do so over a period of at least twelve

months from the date of approval of the financial statements. Details of the Group’s

goingconcern statement are on page 87.

The Committee thoroughly considered and constructively questioned the forecast

assumptions underlying the going concern and viability statements presented by

management. The Committee assessed the prospects of the Company over a three-year

period following a robust assessment of principal and emerging risks affecting the

Company, the business model, forecasts and strategic plans. It also reviewed ‘severe, but

plausible downside risk’ stress test scenarios. Details of the assessment and the viability

statement are set out on page 87.

Audit and Risk Committee report continued

Audit, risk and internal control continued

Directors’ report

108 McBride plc Annual Report and Accounts 2023

Audit and Risk Committee report continued

Audit, risk and internal control continued

Significant judgements and estimates

Matters considered Committee review and conclusions

Impairment reviews Management’s judgement on the need (or otherwise) to take impairment charges for goodwill or fixed assets was reviewed,

considering the trading performance of, and the prospects for, each cash-generating unit (CGU).

Details of the impairment reviews performed are outlined in note 12 to the financial statements. Thereviews concluded that no

impairment was required.

Going concern status and longer-term

viability statements

In line with typical market practice for most UK companies, the Board considered that an 18-month period from the reporting date

constitutes an appropriate period over which to provide its going concern statement. The Board determined that a three-year period

to30June2026 constitutes an appropriate period over which to provide its viability statement.

Reviews of the Group’s going concern status were carried out by the Committee at both the half and full-year period ends. Detailed

papers setting out all the relevant considerations were tabled bymanagement and discussed by the Committee together with PwC.

The Committee noted that during 2023 the Group has negotiated a further increase to liquidity by extending invoice discounting

facilities to unencumbered receivables ledgers and extended the commitment dates on existing overdraft and invoice discounting

facilities. The Group’s base case forecasts, based on the Board-approved budget and three-year plan, indicate sufficient liquidity

throughout the going concern and viability review period to ensure compliance with its banking covenants.

Furthermore, the Committee considered a severe but plausible downside scenario including several downside assumptions relating

to lower revenue growth, increases in input costs, increases in interest rates and a weakening Euro, in order to stress test the Group’s

financial forecasts. In the event that such a severe but plausible downside risk scenario occurs, the Group would remain compliant with

current banking covenants.

After reviewing the Group’s liquidity position, financial forecasts, stress testing of potential risks and uncertainties, and based on the

committed funding facilities, the Directors have a reasonable expectation that the Group has sufficient resources to be able to meet its

liabilities as they fall due over the three-year period ending 30June2026. The risk that the Group would become insolvent during this

timeframe was considered remote.

The Committee recommended to the Board that the going concern and viability statements on page 87 be approved.

Exceptional items The Committee reviewed the accounting treatment of exceptional items and agreed that the items listed in note 4 are exceptional in

size and nature in relation to the Group and therefore itis appropriate to disclose them separately.

Quality of earnings Reviews of the quality of the earnings (material items of income or expense) and one-off items included in cash flow were carried

out by the Committee both at the half-year and full-year ends. The Committee agreed that sufficient disclosure has been made in the

financial statements.

Tax and treasury matters The Committee continued to review the Group’s tax strategy and monitor tax governance and compliance with transfer pricing rules.

TheCommittee recommended for Board approval the Group’s tax strategy for 2023; this can be found inthe Corporate Policies section

of the Group’s website at www.mcbride.co.uk. TheCommittee received updates regarding the tax audits undertaken in Poland, Belgium

and France, and the preparation of documentation to fully supportthe minor changes made to the Group’s transfer pricing policy.

The Committee reviewed the Group’s debt funding strategy and compliance with policies on currency, and interest rate hedging

transactions. TheCommittee continued to monitor performance versus all relevant covenants, toensure the Group could continue to

have sufficient funding capacity to deliver its strategy.

Directors’ report

109 McBride plc Annual Report and Accounts 2023

Significant judgements and estimates continued

Matters considered Committee review and conclusions

Pensions The Committee reviewed the performance of the Robert McBride Pension Fund (‘the Fund’), a defined benefit pension scheme,

closedto new members and future accrual, operated in the UK.

As a result of the government bond crisis in 2022 and changes in liability driven investing (LDI) managers’ collateral requirements,

the Trustee amended the cash flow driven investment (CDI) strategy in October 2022 and as an interim step moved to an unlevered

government bond-based hedge with c.40% of interest rate and inflation hedging. The investment strategy is currently being reviewed

and hedging is due to be increased to c.60% of interest rates and inflation. This level of hedging broadly hedges the current funding

level of the Fund and strikes a balance between risk and return objectives and the liquidity needs of the Fund.

Following the triennial valuation at 31 March 2021, the Company and Trustee agreed a new deficit reduction plan based on the scheme

funding deficit of £48.4 million. The current level of deficit contributions of £4.0million per annum is payable until 31 March 2028.

TheCompany has separately agreed that (from 1 October 2024) conditional profit-related contributions of £1.7 million per annum will

be paid over the period to 31 March 2028. Further details can be found in the CFO’s report.

Task Force on Climate-related Financial

Disclosures (TCFD)

The Committee continues to provide oversight of the Group’s compliance with the recommendations ofTCFD, assessing the processes

used to develop McBride plc’s TCFD-aligned disclosures.

The TCFD Working Group, established during 2022, continues to actively drive the Group’s TCFD response. During 2023, this

cross-functional working group has continued to develop the Group’s approach to TCFD, raising awareness of climate-related risks

around the business and reporting on progress to the Committee. The TCFD Working Group reports into the Risk Council, thereby

co-ordinating the adoption of TCFD best practices into the Group’s risk management processes, whilst also ensuring visibility and

oversight of the programme by the ESG Governance Committee, with which it works in close collaboration. Over the year, the

Committee has reviewed progress against the various workstreams; the Group’s TCFD roadmap, actions and priorities for 2023;

andprogress against the four disclosure pillars (governance, strategy, risk management, and metrics and targets). The Group’s TCFD

disclosure is set out on pages 60 to 72.

Audit and Risk Committee report continued

Audit, risk and internal control continued

Directors’ report

110 McBride plc Annual Report and Accounts 2023

Risk management framework

The Group continues to identify, evaluate, mitigate and monitor risks facing the business

through an established risk management framework, aligned to ISO 31000:2018, and

incorporating both a top-down and a bottom-up approach to identify and assess the

Group’s principal risks and operational risks, respectively. The framework was updated

and enhanced in the prior year to formalise a risk taxonomy framework, which continues

to be adopted across the Group, thereby helping with the categorisation of risk types

to which McBride is exposed, whilst providing a common language for the management

and reporting of risk across the organisation. In addition, a risk appetite framework was

also established during 2022, and continues to operate effectively at present, helping the

organisation with the assessment, communication, escalation and reporting of principal

risks, within the context of determining the amount of risk that the Board is prepared to

accept, tolerate or be exposed to at any point in time.

Responsibility for the ongoing review, reporting oversight and monitoring of risks

lies witha cross-functional Risk Council made up of senior employees from across

the business. The council continues to act as a focal point for the exploration and

evaluation of strategic and emerging risks faced by the Group, as it pursues its strategic

objectives. It provides regular reporting on KRIs to the Executive Committee and makes

recommendations for appropriate mitigation strategies in line with the Group’s risk

appetite. It also helps improve risk awareness, conduct a more joined-up discussion on

risk and facilitates the consideration of risk in key decision-making, by actively driving

and supporting the embedding of the Group’s risk management framework across the

organisation.

During the fourth quarter of the financial year 2022, an assessment of each principal risk

was completed by the Risk Council. The Risk Council considered any new and emerging

risks facing the Group; analysed any contextual changes to any existing risks as to

whether they had become more or less material based on impact and likelihood over the

course of the year; and ensured adequate and reasonable procedures were in place for

controlling, mitigating and managing each risk.

The principles of risk management continue to be embedded into the day-to-day

operations of the divisions and corporate functions, who remain primarily responsible

for identifying and evaluating key risks in their functional, operational and geographical

domains, and escalating the same to the Risk Council. The Committee was responsible

for monitoring and challenging the adequacy of the Company’s procedures in respect

of business risk identification, assessment, monitoring and reporting. On behalf of the

Board, the Committee specifically considered those risks and uncertainties which were

deemed significant and sought comfort from management on any specific and underlying

mitigating factors being used to manage, monitor and address these. The current principal

risks and uncertainties affecting the Group can be found on pages 77 to 86.

The Committee has also continued to be responsible for ratifying the Risk Council’s

Terms of Reference and is provided with biannual updates of matters the Risk Council

hasconsidered. Information on the matters considered by the Risk Council can be found

on page 113.

Audit and Risk Committee report continued

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Directors’ report

111 McBride plc Annual Report and Accounts 2023

Audit and Risk Committee report continued

Audit, risk and internal control continued

Risk management framework

The Board

• Monitors and reviews the

effectiveness of the Group’s risk

management and internal control

systems.

• Approves the risk appetite of

theGroup.

• Reviews reports from the Audit

and Risk Committee on risk

management and internal controls.

Audit and Risk Committee

• Supports the delivery of the Group’s

strategy in the context of the risk

management framework.

• Ensures actions to mitigate risks

have been developed and designed

with appropriate ownership and

timescales.

• Monitors the timely and effective

completion of risk mitigation actions,

in line with agreed timelines.

• Monitors and reviews keyfinancial,

non-financial and internal controls,

as well as the independent audit

process and report.

• Receives and reviews a report

from the Risk Council on the

principalrisks.

• Discusses and confirms the risk

trend and overall effectiveness of

the risk control and monitoring

environment.

• Considers whether any additional

control improvement actions

arerequired.

Executive Committee

• Reviews risk registers from across

individual divisions and functions.

• Ratifies the assessment and

evaluation of risks conducted by

theRiskCouncil.

• Agrees actions to mitigate key

risks facing the business that are

escalatedto it.

• Ensures risk management is

embedded across thebusiness.

• Defines and establishes the risk

appetite of theGroup.

• Considers KRIs escalated bythe

Risk Council.

• Works with the business to ensure

adequate and effective risk

mitigation actions are in place for

risks outside acceptable tolerance

thresholds.

Risk Council

• Group-wide cross-functional forum

for the discussion, monitoring and

oversight of risks and controls.

• Explores and evaluates strategic,

significant and emerging risks.

• Accesses internal and external

knowledge, expertise and insight.

• Periodically reviews KRIs submitted

by the business, before reporting

and escalating the same to the

Executive Committee.

• Supported by various risk forums

focusing on the identification,

assessment and monitoring of risks

andcontrols within each division

and function.

Directors’ report

112 McBride plc Annual Report and Accounts 2023

Risk management and internal control environment

The Group’s risks are identified and managed through various activities, including:

• business risk reviews;

• major project and investment reviews;

• strategic risk assessments and specific functional risk mapping activities;

• ongoing risk identification, ‘horizon scanning’ and evaluation discussions at individual

functional and divisional levels, and by the Risk Council;

• year-end self-assessment questionnaires supporting key internal control procedures,

with an in-built control validation, review and reporting mechanism;

• a quarterly follow-up process to review outstanding internal control actions; and

• a programme of audits within and across individual processes, functions and sites by

various internal stakeholders, including Internal Audit and other assurance providers

within the business.

The responsibility for reviewing the effectiveness of the Group’s systems of internal

control has been delegated by the Board to the Audit and Risk Committee. This includes

reviewing all material financial, operational and compliance controls, key corporate

policies, financial reporting framework and processes, the preparation of the Group’s

consolidated financial statements, and also the overall risk management system in place

throughout the year under review, uptothe date of this Annual Report.

The Committee receives regular reporting from senior management, and it has concluded

that there continues to be a robust and effective control environment in place. The

Committee also confirms that it has not been advised of any failings, breaches or

weaknesses which it considers to be significant during the financial year, and which are

likely to have had a material effect on the Group’s financial performance.

Key control procedures undertaken by the Group during the year included:

• monthly consolidated management accounts reviewed by the Executive Committee;

• monthly reporting on commercial, operational, financial and non-financial KPIs, with

performance discussed at both functional and Group level;

• regular updates to the Board on the Group’s financialperformance and position against

targets;

• a comprehensive annual budgeting process ultimately approved by the Board;

• ongoing monitoring of the Group’s cash and debt position;

• monthly reviews of working capital balances;

• authorisation and control procedures in place for capital expenditure and other

major projects, with post-completion reviews to highlight issues and learnings, and to

improve future performance and delivery; and

• regular meetings and site visits with insurance and risk advisers to discuss risk

assessments, safety audits and performance against agreed objectives.

Audit and Risk Committee report continued

Audit, risk and internal control continued

Directors’ report

113 McBride plc Annual Report and Accounts 2023

Risk management and internal control environment continued

The Internal Audit function provides independent assurance on the adequacy and

effectiveness of the Group’s risk management framework and is responsible for

overseeing and monitoring the effective design and operation of internal control

processes across theGroup. Further details are set out below.

Recommendations arising from the independent auditors’ internal controls report have

been reviewed by the Committee and actions to implement enhanced policies, processes

andprocedures undertaken by management over the course of the year have been

discussed and agreed by the Committee every six months.

Based on the effective conduct of its activities, the Audit and Risk Committee has enabled

the Board to confirm that a robust assessment of the Company’s risk management and

internal controls has been carried out and that no significant failings or weaknesses have

been identified. The assessment covered financial, operational and compliance controls

together with financial reporting processes.

Internal Audit

The Internal Audit function provides a range of financial, operational, regulatory and

compliance-driven audit activities, either performed by our independent, experienced

and qualified in-house internal audit professionals, or in conjunction with skilled and

experienced in-house personnel, at a central functional or a local divisional level. By

discharging its duties in a robust and effective manner, the Internal Audit function

provides assurance to the Committee that the overall control environment and specific

control activities across the Group are adequate, effective and fit-for-purpose.

Regular meetings are held between the Head of Internal Audit and the Chair of the

Auditand Risk Committee and the Committee actively engages the Internal Audit

function to determine the extent to which the overall internal control environment is

adequate, appropriate and effective and how it can be enhanced further by considering

and evaluating specific process and control enhancements.

At the start of each financial year, the Committee reviews and agrees the Internal Audit

Plan. This is based on confirming its alignment with the Group’s strategic priorities and

key current and emerging risk management considerations, whilst also ensuring there is

appropriate focus on essential, integral and ongoing compliance monitoring requirements.

There are in-built mechanisms to ensure that the Internal Audit Plan remains flexible

and agile at all times, in order to address any new and emerging risks that mayarise

throughout the year.

Every six months, the Committee considers the resultsof any audits undertaken and the

adequacy, effectiveness andtimeliness of management’s response to matters raised. Any

recurring themes across processes, functions or locations are challenged and considered.

Such themes, along with any significant or unexpected audit findings, could result in

specific follow-up audits or separate assurance reviews, informing and influencing the

scope of workundertaken in the Internal Audit Plan, both forthecurrent year and for

thefuture.

The Committee continues to be satisfied that the Internal Audit function has sufficient and

appropriate resources at its disposal and provides a critical and effective assurance role to

theorganisation.

Fair, balanced and understandable

Having given due and full consideration to all the matters referred to above, the

Committee is satisfied that the financial statements present a fair, balanced and

understandable view and provide shareholders with the necessary information to assess

the Group’s position, performance, strategy and business model, andhas undertaken to

report accordingly to the Board.

The Audit and Risk Committee report was approved bythe Board on 18 September 2023

and signed on its behalf by:

Alastair Murray

Chair of the Audit and Risk Committee

Audit and Risk Committee report continued

Audit, risk and internal control continued

Directors’ report

114 McBride plc Annual Report and Accounts 2023

Dear shareholder

On behalf of the Remuneration Committee, I am pleased to present the Directors’

Remuneration report (‘the Report’) for the year ended 30 June 2023.

This Report has been prepared in accordance with the provisions of the Companies Act 2006

and Schedule 8 of the Large and Medium-sized Companies and Groups (Accounts and

Reports) Regulations 2008 as amended (‘the Regulations’), the UK Corporate Governance

Code 2018 and the Financial Conduct Authority’s Listing Rules and takes into account

the accompanying Directors’ Remuneration Reporting Guidance and the relevant policies

of the shareholder representative bodies. TheReport is split into three sections: the

Remuneration Committee Chair’s annual statement, Annual Report on Remuneration

andthe proposed new Remuneration Policy (‘the Policy’).

At the 2023 AGM, we will be asking shareholders to vote on three resolutions. The fi rst

is a binding vote on the new Policy, which, if approved, provides the framework for

remuneration over the next three years. The second is an advisory vote on the Annual

Report on Remuneration, which provides details of how we have operated the current

Directors’ Remuneration Policy (‘the current Policy’), the remuneration earned by

Directors for performance in the year ended 30 June 2023 and how the proposed Policy

will be implemented for the coming year.

Shareholders will also be asked at the 2023 AGM to approve a new Long-Term Incentive

Plan (‘2023 LTIP’) to replace the McBride plc 2014 Long-Term Incentive Plan which expires

on 14 October 2024. A summary of the key features of the 2023 LTIP will be included in

the AGM circular.

Finally, shareholders will be asked to approve an amendment to the 2020 Restricted Share

Unit Plan to increase the annual limit from 15% to 30% in line with the new Policy.

Remuneration Committee report

Annual statement

Committee membership and meetings 2023

The Committee met fi ve times in the year ended 30June2023. Details of attendance

canbe found below:

Members

Number of

scheduled meetings

attended

(quorum is

three members)

Eligible

to attend

Elizabeth McMeikan (Chair) 4 4

Regi Aalstad 4 4

Steve Hannam

(1)

2 3

Alastair Murray 4 4

Jeff Nodland 4 4

(1) Steve Hannam stepped down as a Non-Executive Director on 16November 2022.

Jeff Nodland satisfi ed the independence condition on his appointment as a Non-Executive

Director. The Board is satisfi ed that the remaining members during the year were independent

Non-Executive Directors. Meetings may be attended by the Chief Executive Offi cer on all

matters except those relating to his own remuneration. The Chief Financial Offi cer, the Chief

HR Offi cer and the Company’s independent remuneration consultants also attend meetings

by invitation. Igor Kuzniar (aNon-Executive Director) also attended meetings during the year.

Igor stepped down as a Director of the Company on 31 May 2023. The Company Secretary

attended each meeting as Secretary to the Committee. No Director or attendee participates in

any discussion relating to his or her own remuneration.

The Committee seeks

to support the delivery

of McBride’s strategy

through establishing

appropriate remuneration

arrangements.

Elizabeth McMeikan

Chair of the Remuneration Committee

Directors’ report

115 McBride plc Annual Report and Accounts 2023

Performance of the business

McBride entered the year in a significantly stronger position than the previous year, where a

volatile macro backdrop led the Group and the industry to experience unprecedented margin

pressures. The Group returned to profitability as the time lag between the exceptional levels

of input cost inflation hitting the business and the mitigating actions being agreed with our

customers unwound. The decisive actions implemented through the second half of calendar

year 2021 and into 2022, to enable the business to weather these challenges, have provided

the foundations for a much-improved performance and encouragingly, a return to strong

volume growth. In particular, in the second half of the year, encouraging sales momentum has

been seen across the Group, underpinned by improved customer service levels, new contract

wins and increased consumer demand for great-value, high-quality private label products.

2023 remuneration outcomes

All awards in relation to the financial year 2023 were made in accordance with our current

Policy. Thekey decisions made by the Committee in respect of Directors’ remuneration were

as follows:

• annual bonus (Executive Directors) – The outcomes for the Chief Executive Officer

and Chief Financial Officer were determined by reference to performance against the

agreed financial measures of Group adjusted EBITA and Trade Working Capital (up to

80% of salary) and the Committee’s assessment of their individual performance during a

challenging year. The methodology used to calculate the financial performance determined

that there would be a pay-out at 77% of salary this year. The Committee considered the

progress against each Executive Director’s personal objectives for the year across all

aspects of the Company’s strategy and determined an overall pay-out for the CEO and

CFO of 18% of salary. Further detail can be found on page 132;

• vesting of 2020 LTIP awards – Following a review ofthe last three years’ performance

against the pre-agreed measures, the Committee determined that the 2020 LTIP awards

would not vest, as the performance measures had not been satisfied. Further detail can be

found on page 133; and

• taken as a whole, the Committee is satisfied that the overall pay outcomes for the year

ended 30June2023 are appropriate and, accordingly, we have not applied any discretion

to this year’s outturns.

In addition, the Committee reviewed the base salaries of the Executive Directors during the

year. The Committee agreed to increase the base salary of the CEO by 4% (the same increase

as applied to the rest of senior management) to £456,924 with effect from 1January 2023.

The CFO was recruited as CFO on 4 January 2021 on a salary of £264,000. This compared

to a salary of £300,000 that Chris Smith was paid as CFO prior to becoming CEO in June

2020. Having reflected on market levels of pay for a CFO, the need to retain the current

CFO and his strong performance since he joined us, the Committee determined that it was

both appropriate and necessary to make a material market adjustment to Mark Strickland’s

base salary. As a result, the Committee decided to increase his base salary to £300,000 with

effect from 1 January 2023, which also included an inflationary increase of 4% in line withthe

increase being awarded to senior management. The Committee did consider whether tomake

such an adjustment in one go or to phase itin and felt, on balance, that it was important to

make the adjustment in one go to ensure that Mark Strickland was fairly paid going forward.

As further background, the Company agreed to adopt a tiered approach to salary

increases for the UK workforce, reflecting the fact that the cost-of-living crisis has more

impact on those earning lower salaries, as a result of which the following increases took

effect from 1 January 2023:

• 7% for operational blue collar unionised colleagues;

• 6% for office colleagues below Willis Towers Watson Grade 12; and

• 5% for office colleagues and managers above Willis Towers Watson Grade 12.

Employees on the UK minimum wage received a further increase in April2023.

Remuneration principles and structure

The Committee seeks to support the delivery of McBride’s strategy through establishing

appropriate remuneration arrangements. The link to strategy for each element of the

Executive Directors’ remuneration is described in the Policy.

The Committee has adopted remuneration principles which are designed to ensure that

executive remuneration:

• is transparent in respect of elements of remuneration, quantum, the rationale for

targets and performance outcomes;

• is simple to ensure that remuneration structures act as intended and are clearly

understood;

• discourages inappropriate behaviours or excessive risk-taking through clawback

provisions and holding periods;

• is predictable through the use of a range of outcomes and individual caps;

• is aligned to the Group’s strategy and the long-term sustainable development of the

business; and

• is aligned to the Company’s purpose, values and strategy and to the Group’s culture.

These principles apply equally to those of senior management.

Remuneration Committee report continued

Annual statement continued

Directors’ report

116 McBride plc Annual Report and Accounts 2023

Remuneration Committee report continued

Annual statement continued

Review of Directors’ Remuneration Policy in 2023

Our current Policy was approved at the 2020 AGM, receiving 87.59% votes in favour. In

addition, at the 2021 and 2022 AGMs, 98.43% and 99.68% of the shareholders that voted

supported the advisory vote on the Directors’ Remuneration report, respectively.

Our current Policy introduced the concept of including Restricted Share Units (RSUs)

at 15% of salary as part of fixed compensation to help get more shares into the hands of

the executives to ensure stronger alignment with the interests of the shareholders. This

element also provides an additional retention tool as these RSUs vest over three years.

The RSUs worked particularly well during the recent challenges faced by the Group; where

external factors have significantly impacted Company performance and were generally

outside of management’s control. Those external factors include the unprecedented raw

material cost price increases, significant increases in logistics and freight costs as well as

labour and energy cost pressures which rendered target setting for both annual bonus

and particularly LTIPs unusually challenging.

The Committee carried out a thorough review of the current Policy during the year with

a focus on attraction and retention at the most senior levels of the business. In particular,

the Committee considered whether it was appropriate to maintain the current structure

with 15% of salary paid in shares via an RSU plan, with the long-term incentive being

delivered entirely in performance shares; move from performance shares to RSUs in

whole or in part; or introduce a one-off arrangement. In considering this question, the

Committee took account of the following:

• the desire of the Board to continue to seek to drive and reward executives for improved

performance over the longer term by including a leveraged element of remuneration by

reference to performance;

• a concern that the current Policy was not working as well as it could in enabling the

Company to attract, retain and motivate high-quality executives who would be critical

to the Company’s success going forward;

• the difficulty in operating LTIPs given the difficulty in target setting and the extent to

which performance can be driven by factors outside of the control of management;

• the concern that a complete switch to RSUs would lessen the link between reward

andperformance; and

• a concern that a one-off recovery type plan would be very high risk and not aligned

with McBride’s risk profile, and that such plans are in general disliked by shareholders.

On balance, the Committee is of the view that the principles underpinning the current

Policy remain fit for purpose but that there is a need to rebalance a couple of elements in

order to ensure that the Company is able to attract, retain and motivate senior executives

by increasing the level of RSUs awarded and decreasing the level of LTIPs awarded,

resulting in a small increase in the total target remuneration and a small decrease in

the total maximum remuneration. The Committee is therefore seeking shareholders’

support for a number of proposed evolutionary amendments to the current Policy.

Theseamendments are intended to achieve the following:

• support the execution and delivery of McBride’s business strategy;

• further increase the alignment of Executive Directors and senior management with the

goals and interests of our shareholders by increasing the proportion of total package

represented by RSUs; whilst still maintaining a long-term performance pay element,

albeit at a slightly reduced level. This proposal recognises the cyclical element to input

prices and the challenges this brings to target setting; reflected in the sparse levels of

LTIP pay-out over the past decade; and

• an increased ability to attract, retain and motivate Executive Directors and senior

management alike via enhancing fixed pay utilising RSUs.

Proposed changes to the Directors’ Remuneration Policy to apply from the

2023 AGM

As a result of the review of remuneration described above, the Committee is proposing

the following substantial changes which will reduce the maximum level of remuneration,

slightly increase target levels of remuneration, and increase the time over which

executives are required to hold shares. The changes are as follows:

• increase the RSU award from 15% to 30% of salary;

• reduce the maximum LTIP award from 125% to 100% of salary for the CEO and from

110% to 90% for the CFO; and

• strengthen the post-cessation shareholding requirement so that shares must be held

for twoyears post-cessation.

As a result of these changes, the total combined RSU and LTIP awards for the Executive

Directors will be as follows:

• for stretch performance, total combined RSU and LTIP awards will reduce from 140% to

130% for the CEO and from 125% to 120% for the CFO; and

• for on-target performance (50% of maximum), total combined RSU and LTIP awards

will increase from 77.5% to 80% for the CEO and from 70% to 75% for the CFO.

The Committee believes that the rebalancing of the RSU and LTIP awards for the

Executive Directors will better align participants with shareholders, whilst maintaining

an important incentive to achieve outperformance of the strategic business plan in

an unpredictable macroeconomic environment. In addition, the strengthening of the

shareholding requirement will increase alignment with shareholders and the long-term

interests of the Company.

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117 McBride plc Annual Report and Accounts 2023

Directors’ remuneration matters considered during and in respect of 2023

A summary of the key matters considered by the Committee in respect of Directors’

remuneration during the year and since the year end in respect of 2023 is asfollows:

• the Committee reviewed the base salaries for the Executive Directors;

• in relation to the annual bonus, the Committee determined after the year end that

a bonus of 95% of maximum would be payable to Executive Directors covering this

period. No discretion was applied in reaching this decision. Further details can be

found on page 131;

• in relation to the LTIP awards granted in September 2020, the Committee reviewed the

performance conditions after the year end and determined that performance for these

awards was below the threshold levels. No discretion was applied in determining the

level of vesting. As a result, these awards lapsed in full;

• the Committee approved the grant of the 2022 LTIP and RSU awards. As disclosed

in my statement last year, the Committee agreed to set the number of shares to be

subject to these LTIP awards by using the higher of 35 pence and the share price on

the day prior to the date of grant. As the share price on that day was only 23.55 pence,

the price of 35 pence was used, resulting in the maximum face value of shares subject

to the awards being only 84% of salary for the CEO and 74% of salary for the CFO,

rather than the normal policy levels of 125% and 110% of salary respectively; and

• the Committee reviewed and approved the Chief Executive Officer’s and Chief

Financial Officer’s personal objectives under the annual bonus scheme.

Main duties:

• to review the ongoing appropriateness and relevance of the Directors’ Remuneration

Policy;

• to apply formal and transparent procedures regarding executive remuneration

packages;

• to consider and make recommendations to the Board on remuneration issues for the

Chairman, Executive Directors and other senior executives, taking into account the

interests of relevant stakeholders;

• to ensure that failure is not rewarded and that steps are taken to mitigate loss on

termination to contractual obligations where appropriate; and

• to review the implementation and operation of any Company share option schemes,

bonus schemes and Long-Term Incentive Plans (LTIPs) and to review the formal policy

for shareholding requirements, both in employment and post-cessation.

The Terms of Reference of the Committee were reviewed during the year and a

copyofthe Committee’s Terms of Reference is available on the Group’s website

www.mcbride.co.uk.

Directors’ Remuneration Policy and shareholder engagement

During the year, the Committee reached out to all shareholders holding more than 0.5%

ofthe issued share capital on the review of the current Policy and held meetings with, and

received significant support for our proposals from, shareholders holding in aggregate

nearly 70% of the issued share capital.

Looking forward to 2024

• For the 2023 LTIP awards, we will be reverting back to a ROCE measure for 50% of the

award (from the net debt to EBITDA ratio used for the 2022 awards). Whilst it remains

important to ensure that the business maintains a healthy cash flow, this is now less

critical than it was last year and hence the Committee feels it is appropriate to revert to

the ROCE measure, alongside an EPS measure.

• For the EPS measure, the Committee has decided to measure performance

cumulatively over the three-year performance period, given the volatility inherent in

external factors impacting the business. Previously, performance was measured only for

the final year of the performance period.

• As the share price is now beginning to recover, the Committee intends to revert to

using the prevailing share price on the date of grant to determine the number of shares

subject to awards. As a result, we expect to grant LTIP awards over 100% of salary to

the CEO and 90% of salary to the CFO (down from the current Policy level of 125% and

110% respectively) assuming the new Policy is approved at the AGM. This will allow us

to increase the annual RSU awards from 15% of salary to 30% of salary.

• The Chair and NED fees were last reviewed in 2020 The Committee reviewed the level

of fee for the Chairman and agreed to increase this by 5% with effect from 1 July 2023.

The Board, excluding the Non-Executive Directors, also reviewed the fee levels for the

Non-Executive Directors and agreed to increase the base fee by 5% with effect from

1July 2023.

Looking ahead

Looking to the future, the Committee will continue to seek to align Executive Directors’

remuneration with the experience of our shareholders, and to ensure appropriate

alignment between executive pay arrangements and the wider workforce.

Elizabeth McMeikan

Chair of the Remuneration Committee

Remuneration Committee report continued

Annual statement continued

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118 McBride plc Annual Report and Accounts 2023

Remuneration Committee report continued

Directors’ Remuneration Policy

The Policy set out below will be subject to a binding vote at the AGM to be held on 20 November 2023. If approved, it will be effective for three years from the date of approval.

Policy principles

The Group’s approach for all employees, including executives, is to set remuneration that is closely aligned with our underlying Group strategy, takes account of market practice,

economic conditions, the performance of the Group and of teams or individuals, recognising any collective agreements that may apply as well as any legal or regulatory requirements

in jurisdictions where it operates. Our Policy aims to attract, motivate and retain suitably effectiveemployees.

The Committee follows the following broad principles when considering the design, implementation and assessment of remuneration in line with the recommendations set out in

Provision 40 of the 2018 UK Corporate Governance Code:

Clarity The Committee is committed to being transparent in respect to the elements of remuneration, quantum, the rationale for targets set and performance

outcomes. The Committee engages with shareholders and is keen to understand their views and priorities when considering key remuneration issues and any

major changes.

Simplicity The Committee is mindful of the need to avoid overly complex remuneration structures which can be misunderstood and deliver unintended outcomes.

TheCommittee is confident that the remuneration structure and its operation isunderstood by participants and supports the overall strategic objectives.

Risk Targets are reviewed to ensure they reflect the overall risk appetite set by the Boardand do not encourage inappropriate behaviours or excessive risk-taking.

Mitigation is provided through the clawback provisions (which are in line with current best practice expectations) and through the discretion the Committee

has to override the vesting result in exceptional circumstances.

In addition, holding periods are in place for awards under the RSU plan andthe LTIP and at least 30% of any annual bonus is deferred for three years under the

Deferred Bonus Plan.

Predictability The Committee assesses the potential outcome of future reward by reference to potential pay-outs that can be received at a range of outcomes (minimum,

mid-point and maximum). Individual caps apply to participation in our incentive plans.

Proportionality The Committee seeks to ensure that targets for annual bonus and long-term incentives are aligned with the Group’s strategy and the long-term sustainable

development of the business.

The focus of our remuneration strategy is on rewarding performance – the majority of executive remuneration is performance-based and only payable if

demanding performance targets are met. The majority of variable pay is delivered in the form ofshares.

When setting targets for variable elements of pay, the Committee carefully considers the targets to minimise the risk of excessive reward by reference to the

maximum potential award that could be achieved.

When assessing performance against annual bonus and LTIP, the Committee also considers:

• the overall performance of the business;

• the quality of earnings when assessing the achievement of financial targets; and

• the market in which the Company operates.

Both annual bonus and LTIP payments are at the ultimate discretion of the Committee. The Committee retains discretion to override formulaic outcomes

produced by the assessment of performance against predetermined performance conditions and scale back awards where, in the Committee’s view, the

pay-out levels do not reflect the performance of the wider business over the period, individual performance or where events happen that cause the Committee

to determine that the conditions are unable to fulfil their original intended role. Any exercise of discretion will be fully disclosed to shareholders.

Notwithstanding that the Restricted Share Units (RSUs), which are an element of our fixed pay, are not subject to performance conditions, the Committee is

mindful of the potential for windfall gains when awards vest and downward discretion may also be applied to the actual number of shares to be granted and

the vesting of RSU awards where exceptional circumstances exist.

Alignment to

culture

The Committee is mindful of the need to avoid overly complex remuneration structures which can be misunderstood and deliver unintended outcomes.

TheCommittee is confident that the remuneration structure and its operation isunderstood by participants and supports the overall strategic objectives.

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119 McBride plc Annual Report and Accounts 2023

Remuneration Committee report continued

Directors’ Remuneration Policy continued

Policy table

The following table summarises each element of our Policy for the Executive Directors, explaining how each element operates.

Element: Executive Director base salary

Purpose and link

to strategy

• To ensure the Group is able to recruit and retain high-calibre executives.

Operation • Salaries are set by the Committee taking into account individual experience, performance, skills and responsibilities, prevailing market conditions

(byreference to companies of a similar size and complexity and other companies in the same industry) and internal relativities.

• Salaries are paid monthly in arrears by bank transfer and are normally reviewed annually with any changes effective from January.

Maximum • Details of current salaries of the Executive Directors are detailed on page 131.

• Salaries are normally reviewed annually and may be increased each year. There is no maximum, but increases will generally be in line with those

awarded to the Group’s workforce, as well as reflective of the overall financial performance of theGroup.

• Increases beyond this may be awarded in limited circumstances, such as where there is a change in responsibility, experience or a significant

change in the scale of the role and/or size, value and/or complexity of the Group.

Performance measures • Not applicable.

Changes from previous

policy

• No change.

Element: RSUs

Purpose and link

to strategy

• To ensure the Group is able to recruit and retain high-calibre executives.

• To provide enhanced alignment to shareholders.

Operation • Annual awards, as part of fixed pay.

• Awards will normally vest three years from the date of grant subject to continued employment.

• Awards will be subject to a two-year post-vesting holding period, less any shares required to be sold to cover withholding tax.

• Not pensionable, or ‘salary’, for the purposes of bonus, LTI or payments for loss of office.

• A ‘dividend equivalent’ provision is also available on the Deferred Annual Bonus Plan (DBP) shares at the discretion of the Committee, enabling

dividend equivalent payments to be paid, in cash or shares, on any shares that vest.

• Subject to malus and clawback

(1)

Maximum • Awards of up to 30% of salary may be granted annually.

Performance measures • Not applicable.

Changes from previous

policy

• Increase in maximum from 15% to 30% of salary.

(1) Malus and clawback apply in the event of an error in calculation, a material misstatement of the financial results, serious misconduct by a participant, corporate failure or reputational damage.

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120 McBride plc Annual Report and Accounts 2023

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Directors’ Remuneration Policy continued

Element: benefits

Purpose and link to

strategy

• To provide market-competitive benefits, in line with those provided to other Group employees.

Operation • Benefits may include private medical insurance, sick pay, a fully expensed car (orequivalent cash allowance), disability and life assurance cover.

• Some benefits may be provided in the case of relocation, such as removal expenses, and in the case of international relocation might also include

such items as cost of accommodation, children’s schooling, home leave, tax equalisation and professional advice etc.

• The Company has the ability to reimburse the tax payable (grossed up) on any business expenses captured as taxable benefits.

Maximum • The benefit provision is reviewed periodically. No maximum level is set on the value or cost of benefits provided.

Performance measures • Not applicable.

Changes from previous

policy

• No change.

Element: pension

Purpose and link to

strategy

• Retirement benefits are regarded as an important element of the Group’s basic benefits package to attract and retain talent.

Operation • Membership of the Company’s defined contribution, or similar, pension scheme, or in agreed circumstances, a cash allowance in lieu of pension.

Maximum • Up to 8% of base salary, or such other amount in line with that available to the majority of the UK general workforce, from time to time.

Performance measures • Not applicable.

Changes from previous

policy

• No change.

Policy table continued

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Directors’ Remuneration Policy continued

Element: annual bonus

Purpose and link to

strategy

• The purpose of the annual bonus is to incentivise delivery of the Group’s financial and non-financial objectives and to ensure that Executive

Directors and senior executives are fairly rewarded for their contribution to the success of the Group.

• To provide alignment of Directors’ interests to the interests of shareholders through enhanced shareholdings.

Operation • Performance conditions are set independently by the Committee at the start of each year.

• Performance criteria include the financial targets of the Group as agreed by the Board and specific targets based on clear and measurable

objectives that underpin, and are key to achievement of, the Group’s strategy.

• Personal objectives are reviewed by the Committee to ensure they contribute to the strategic aims of the Group.

• To further align the interests of Directors with shareholders, 30% of the bonus is paid via the DBP.

• Executive Directors can voluntarily invest any remaining bonus, up to a maximum of 70% of salary, into the DBP. Invested sums will be matched

with additional shares on a 1:2 ratio.

• Awards granted under the DBP vest after three years and are normally subject tothe Director remaining employed by the Group at the end of

thatperiod.

• A ‘dividend equivalent’ provision is also available on the DBP shares at the discretion of the Committee, enabling dividend equivalent payments

tobe paid, in cash or shares, on any shares that vest.

• All bonus payments are at the ultimate discretion of the Committee and the Committee retains an overriding ability to ensure that overall bonus

payments reflect its view of corporate performance during the year when determining the final bonus amount to be awarded.

• Both the cash and deferred share elements of the annual bonus are subject to malus and clawback

(1)

Maximum • 100% of base salary.

Performance measures • At least 80% of the bonus will be assessed against a sliding scale of challenging and stretching financial performance targets, with no more than

20% of the bonus being based on the achievement of specific and measurable personal targets. Irrespective of achievement against the personal

targets, no bonus is payable unless a minimum level of financial performance is achieved. Targets are set taking into account our financial and

strategic plans for the business.

• The Committee retains the ability, in exceptional circumstances, to adjust the targets and/or set different measures and alter weightings for

the annual bonus if certain events occur, such as a material divestment of a Group business, which cause it to determine they are no longer

appropriate and a change is required to ensure that they achieve their original purpose and are not materially less difficult to satisfy.

Changes from previous

policy

• No change.

(1) Malus and clawback apply in the event of an error in calculation, a material misstatement of the financial results, serious misconduct by a participant, corporate failure or reputational damage.

Policy table continued

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Directors’ Remuneration Policy continued

Element: LTIP

Purpose and link to

strategy

• The objectives of the LTIP are to align the long-term interests of shareholders andmanagement and reward achievement of long-term,

stretchingtargets.

• Awards are made to Executive Directors and to senior executives who have asignificant influence over the Group’s ability to meet its strategic

objectives. Whilst it is not a requirement of the LTIP, senior executives are encouraged to usethe scheme to increase their share ownership in

theCompany.

Operation • Annual awards are granted, subject to individual performance and Committee discretion. The awards vest after three years subject to continued

employment and the satisfaction of challenging performance conditions. A two-year post-vesting holding period applies to all shares (less any

shares required tobesold to cover withholding tax) that vest.

• LTIP awards are subject to malus and clawback

(1)

• A ‘dividend equivalent’ provision is also available on the LTIP shares at the discretion of the Committee, enabling dividend equivalent payments to

be paid, in cash or shares, on any shares that vest.

• The Committee will operate the LTIP according to its respective rules and in accordance with the Listing Rules and HMRC rules, where relevant.

Maximum • 100% of salary for the Chief Executive Officer and 90% of salary for the ChiefFinancial Officer and any other Executive Director in any financial

year. TheCommittee reviews the quantum of awards annually to ensure they are in line with market levels and appropriate given the performance

of the individual and the Company.

• Actual award levels to Executive Directors are set out in the Annual Report on Remuneration.

Performance measures • Vesting of awards would normally be based on key financial measures of performance (such as, but not limited to, earnings per share (EPS),

ROCE), selected by the Committee and measured over a period of no less than three financial years. EPS is a measure of the Company’s overall

financial success and ROCE is a key performance indicator for the Group. In the first year of operation of the policy, it is intended that half of the

award will be subject to an EPS performance condition and the remaining half subject to a ROCE performance condition.

• Different performance measures and/or weightings may be used for future awards to help drive the strategy of the business.

• Targets are set by the Committee for each award on a sliding scale basis. No more than 25% of awards will vest for threshold performance, with

fullvesting taking place for equalling or exceeding maximum performance conditions. Targets are set taking into account the prevailing strategy

and long-term plans.

• The Committee retains the ability, in exceptional circumstances, to adjust the targets and/or set different measures and alter weightings for the

LTIP if events occur, such as a material divestment of a Group business, which cause it to determine they are no longer appropriate and a change

isrequired to ensure that they achieve their original purpose and are not materially less difficult to satisfy.

Changes from previous

policy

• Reduction in maximum from 125% to 100% of salary for the CEO and from 110% to 90% of salary for the CFO.

(1) Malus and clawback apply in the event of an error in calculation, a material misstatement of the financial results, serious misconduct by a participant, corporate failure or reputational damage.

Policy table continued

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Directors’ Remuneration Policy continued

Element: Non-Executive Director fees

Purpose and link to

strategy

• To ensure the Group is able to attract and retain experienced and skilled Non-Executive Directors able to advise and assist with establishing and

monitoring the strategic objectives of the Company.

Operation • The remuneration of the Chairman and the Non-Executive Directors is payable in cash fees.

• They are not eligible to participate in bonus or share incentive schemes.

• Their services do not qualify for pension or other benefits.

• Expenses incurred for advice in respect of UK tax returns for non-UK NEDs may be reimbursed.

• Fees are paid monthly and reasonable expenses are reimbursed where appropriate. Tax may be reimbursed if these expenses are determined

tobea taxable benefit.

• Fee levels are determined by the full Board with reference to those paid by other companies of similar size and complexity, and to reflect the

amount of time they are expected to devote to the Group’s activities during the year (and may include additional ad-hoc payments to reflect

increased time commitments over a short period).

• A supplementary fee is also paid to Committee Chairs and to the Senior Independent Director to reflect their additional responsibilities.

• An additional allowance of up to £50,000 p.a. may be payable to the Chairman to compensate for the additional time commitment involved

intravelling both to attend Board meetings and to generally carry out the duties as Chairman.

• An additional allowance of up to £15,000 p.a. may be paid to NEDs based overseas for any additional time commitment involved in travelling

bothto attend Board meetings and to generally carry out the duties as a NED.

Maximum • Details of the current fees for the Chairman and Non-Executive Directors are set out on page 137. The aggregate annual sum for Non-Executive

Director fees cannot exceed £600,000 p.a. The Company does not intend to seek shareholder approval for any increase to this maximum in the

short to medium term.

Performance measures • No element of the Chairman’s nor Non-Executive Directors’ fees is performance related.

(1) Malus and clawback apply in the event of an error in calculation, a material misstatement of the financial results, serious misconduct by a participant, corporate failure or reputational damage.

Policy table continued

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Directors’ Remuneration Policy continued

Element: share ownership guidelines/requirements

Purpose and link to

strategy

• Executive Directors and other senior executives are required to build and maintain a shareholding in the Company as this represents the best

wayto align their interests with those of shareholders. Levels are set in relation to earnings and according to the post held in the Company.

• Non-Executive Directors are encouraged to build and maintain a shareholding.

Operation • The expectation is that executives will build up to these levels over a period of time, through retaining shares received under the Company’s

incentive arrangements, net of sales to settle tax and/or shares purchased in their own right.

• Vested but unexercised LTIP awards, unvested RSU awards and deferred shares will count towards this requirement, on a net of tax basis.

• The Executive Directors are also required to maintain their shareholding requirement or the actual shareholding on departure, if lower, for a

minimum of 24 months after cessation of employment. The post-cessation shareholding obligation will apply to shares acquired (net of tax)

underawards granted under this and future policies. Shares purchased from the executives’ own funds would not be included.

Maximum • There is no maximum; however, Executive Directors are required to build and maintain a shareholding equivalent to 200% of salary, 300% for

theCEO and 50% of salary for other senior executives.

• Newly appointed Executive Directors would normally be required to achieve the required shareholding within a five-year period of appointment

tothe Board.

• The guideline for NEDs is to hold shares equivalent to 100% of their annual fee.

Performance measures • Not applicable.

Changes from previous

policy

• Increase in the length of the post-cessation shareholding obligation from twelve months to 24 months.

Policy table continued

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Directors’ Remuneration Policy continued

Policy table continued

Committee discretion in the operation of variable pay schemes

The Committee operates the Group’s incentive plans according to their respective rules

and in accordance with HMRC requirements and the Listing Rules, where relevant. The

Committee, consistent with market practice, retains discretion over a number of areas

relating to the operation and administration of the plans. The extent of such discretion is

set out in the relevant plan rules and the Remuneration Policy table above. The Committee

will apply certain operational discretions to ensure the efficient administration of the plans

which include, but are not limited to:

• selecting the participants;

• timing;

• quantum of awards, including determining the actual number of shares granted, taking

into account share price and wider factors;

• setting the performance criteria and respective weightings of performance measures;

• determining the extent of vesting based on the assessment of performance;

• determining ‘good leaver’ status;

• the form of payment; and

• making appropriate adjustments required in certain circumstances, including overriding

formulaic outcomes and scaling back awards in respect of variable pay outturns.

The Committee may vary the performance conditions applying to share-based awards if

an event occurs which causes the Committee to consider it would be appropriate to

amend the performance conditions, if the Committee considers the varied conditions are

fair and reasonable and not materially less challenging than the original conditions.

Any use of such discretion would, where relevant, be explained in the Annual Report on

Remuneration. Anyproposed application of this discretion to make an upward adjustment

would be the subject of consultationwith shareholders.

Statement of consideration of shareholder views

The Committee considers the feedback from shareholders at the AGM each year and

guidance from shareholder representative bodies more generally. In addition, the

Committee consulted proactively with major shareholders in the development of the

proposed Policy for approval and received support from the majority with whom

itconsulted.

Statement of consideration of employment conditions elsewhere in the Group

Workforce remuneration data is provided to the Committee on a regular basis by the

Chief HR Officer. Recognising there are good reasons for the level and structure of

executive pay to differ from that of the wider employee population, the Committee will

continue to consider pay across McBride, reflecting on the appropriate alignment with

theprinciples which guide executive remuneration across the wider employee population.

Differences in the Policy for executives relative to the broader employee

population

The Policy for the Executive Directors is informed by the structure operated for the

broader employee population. Pay levels and components vary by organisational level

butthe broad themes and philosophy remain consistent across the Group:

• salaries are reviewed annually with regard to the same factors as those set out in the

Policy table for Executive Directors;

• members of the Executive Committee participate in an annual bonus plan aligned

with that offered to the Executive Directors. Other members of senior management

participate in the same plan, dependent on performance of the Group or performance

of business division, according to their role and level;

• members of the senior management team can be considered for awards under the

LTIP. This is intended to encourage share ownership in the Company and align the

management team with the strategic business plan; and

• eligibility for and provision of benefits and allowances varies by level and local

marketpractice.

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Directors’ Remuneration Policy continued

Element: recruitment remuneration

Purpose and link

to strategy

• To ensure the Group is able to recruit and retain high-calibre Executive and Non-Executive Directors.

Operation • New Director remuneration arrangements will be based upon and within the limits of the various elements as set out on pages 143 and 144.

In addition:

• Executive Director buy-out payments may be made in exceptional circumstances, typically when these are considered to be in the best interests of the

Company to facilitate the buy-out of value forfeited on joining the Company for an external appointment. These payments would typically be in the form of

an enhanced LTIP award under the rules and maximums permitted under the Company’s LTIP rules at that time or under the Restricted Share Plan. Listing

Rule 9.4.2 may be used for this purpose if required. Such payment would take account of remuneration being relinquished, including the nature and time

horizons attached to such remuneration and the impact of any performance conditions. In exceptional circumstances, payments could be made in the form

of a cash payment which would normally be subject to clawback in certain situations, in line with other elements under the Company’s Remuneration Policy.

• Relocation packages, generally consisting of out-of-pocket expenses, together with any additional costs solely attributable to the relocation may be offered

in situations deemed essential in order to carry out the relevant role successfully. Any package will be designed to ensure the new recruit becomes effective

in their role as soon as possible, with minimal distractions from any relocation.

• In respect of internal promotions, any remuneration commitments made before such promotion (whether or not they would fall within the principles of the

Company’s current Remuneration Policy) may form part of that Director’s remuneration package, with the expectation that any such commitments would

be phased out over time.

Maximum • It is intended that the value of any element of normal remuneration will generally be on the same basis as the existing Directors (pro-rated where appropriate

dependent on time of joining the Company) and elements such as buy-out payments being no higher than the expected value of the forfeited arrangements.

Element: Executive Director compensation on loss of office

Purpose and link

to strategy

• On termination of an Executive Director’s service contract, the Committee will seek to provide the minimum compensation applicable to the individual’s

employment contract.

• The Committee will take into account the departing Director’s duty to mitigate their loss when determining the amount of compensation.

Operation • In the event of an early termination, any compensation commitments will be within the principles of the Company’s approved Remuneration Policy (or if an

amendment to the Policy authorising the Company to make the payment has been approved by shareholders).

• Directors’ service contracts confirm that the Company may terminate the contract with immediate effect by making a payment equal to base salary for any

unexpired period of notice. The Company also has the option to pay notice month by month that would reduce or cease if the departing Director obtained

other employment.

• There are no agreements between the Company and its Directors or employees providing for additional compensation for loss of office or employment

(whether through resignation, purported redundancy or otherwise) that may occur in the event of a takeover bid. It is also the Company’s policy not to

include liquidated damages clauses in service contracts, unless there is a clear explainable benefit for the Company in doing so. None of the Executive

Director service contracts contain any such liquidated damages provision.

• Statutory redundancy payments will be made as appropriate.

• Costs attributable to outplacement and/or legal fees associated with the termination of an Executive Director’s service contract may be paid by the

Company, where appropriate.

• Payments may be made by the Company where appropriate to settle claims brought against the Company, such as unfair dismissal.

Policy table continued

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Directors’ Remuneration Policy continued

Element: Executive Director compensation on loss of office

Maximum In circumstances in which a leaving Director may be entitled to pursue a legal claim, the Company may negotiate settlement terms if it considers this to be in

the best interests of the Company and, with the approval of the Committee on the remuneration elements therein, enter into a settlement agreement.

Normal exit

(termination for reasons of resignation or

dismissal where the Committee does not

exercise discretion to treat the leaving Director

as a good leaver).

Good leaver

(termination for reasons of death, ill health,

retirement, redundancy, or at the discretion of

the Committee).

Change of control

(excludes a reorganisation or reconstruction where

ownership does not materially change).

Base salary,

RSUs, pension

andbenefits

Base salary, pension and benefits will be paid/

provided to the date employment ends or

payment in lieu of notice made. Any untaken

holiday is pro-rated to the leaving date.

Unvested RSUs will lapse. Any vested RSUs

will normally remain subject to the two-year

post-vesting holding period.

Base salary, pension and benefits will be paid/

provided to the date employment ends or

payment in lieu of notice made. Any untaken

holiday is pro-rated to the leaving date.

Unvested RSUs (at Committee discretion)

will vest at the normal vesting date unless the

Committee determines they shall vest on an

earlier date.

Any vested RSUs will normally remain subject

to the two-year post-vesting holding period.

If within twelve months of a change of control the

individual is given notice or there is a material change

to their duties precipitating departure, there would be

an additional payment due of 18 months’ salary for the

CEO and twelve months’ salary for the CFO and other

Executive Directors.

Any unvested RSUs will vest on the date of the

relevant event, subject to pro-ration by reference to a

twelve-month period from the grant date (as defined)

andthe two-year post-vesting holding period will end.

Annual bonus

andDBP

No entitlement for year of exit. Payments in

earlier years may be subject to clawback in

certain circumstances.

DBP awards lapse.

Annual bonus is pro-rated (based upon timing)

and subject to performance for year of exit.

Any DBP awards, which include compulsory

and voluntary deferral and matching shares,

(at Committee discretion) vest in full at either

the normal vesting date or on cessation of

employment.

Extent to which performance requirements are satisfied in

year determines level of annual bonus.

If within twelve months of a change of control the

individual is given notice or there is a material change

to their duties precipitating departure, there would be

an additional payment due of 150% of target bonus for

the CEO and 100% for the CFO and any other Executive

Directors.

Any unvested DBP awards will vest in full on the date of

the relevant event.

LTIP Unvested awards lapse. Vested awards may be

subject to clawback in certain circumstances.

Anyvested awardswill normally remainsubject

to the two-year post-vesting holding period.

Unvested awards may be pro-rated based

upon the rules of the LTIP plan (at Committee

discretion) and vest on either the normal

vesting date or cessation of employment.

Vested awards may be subject to clawback

in certain circumstances. Anyvested awards

will normally remain subject to the two-year

post-vesting holding period.

Unvested awards may be pro-rated based upon the rules

of the LTIP plan (at Committee discretion) andvest on the

date of the relevant event. Vested awards may be subject

to clawback in certain circumstances and the two-year

post-vesting holding period willend.

Policy table continued

continued

Directors’ report

128 McBride plc Annual Report and Accounts 2023

Remuneration Committee report continued

Directors’ Remuneration Policy continued

Executive Directors’ service contracts

Service contracts stipulate that the Executive Directors will provide services to the

Company on a full-time basis. Copies of the Executive Directors’ service contracts are

available for inspection at the Company’s registered office.

Executive Director

(1)

Date of service

contract

Notice

period

Chris Smith 11 June 2020 6 months

Mark Strickland 4 January 2021 6 months

(1) Both Directors are re-elected on an annual basis by either the Company or the Executive Director.

Inexceptional circumstances, notice periods of up to a maximum of twelve months may be offered

tonewly recruited Directors. The service contract is of an unlimited duration.

The contracts contain restrictive covenants for periods of up to six months

post-employment relating to non-competition and non-solicitation of the Group’s

customers, suppliers and employees and indefinitely with respect to confidential

information. In addition, they provide for the Group to own any intellectual property rights

created by the Directors in the course of their employment.

The employment contracts for Executive Directors are structured on a similar basis to the

US ‘double trigger’ in the event of a change of control. If the change of control is followed

within twelve months by the Executive Director being given notice or there is a material

change in their duties precipitating their departure, the Chief Executive Officer would

receive an additional payment equivalent to 18 months’ salary and 150% of target bonus

for the relevant period. For the Chief Financial Officer and any other Executive Director,

this payment will be by reference to twelve months’ salary and 100% of target bonus.

Remuneration performance scenarios 2024

The Executive Directors’ remuneration packages comprise both core fixed elements

(basesalary, RSUs, pension and benefits) and performance-based variable pay. The charts

opposite illustrate the composition of the Chief Executive Officer’s and Chief Financial

Officer’s remuneration packages (£’000) at minimum, target, maximum andmaximum

+50% share price growth for 2024 in line with policy.

Minimum

Maximum

Target

Fixed pay

2,000,000

200,000

1,200,000

400,000

1,400,000

1,800,000

1,600,000

Annual bonus Long-term incentive

800,000

1,000,000

600,000

Maximum +50%

share price growth

£655,200

36.5%

38.1%

25.4%

41.8%

29.1%

20.5%

59.0%

20.5%

100.0%

£1,112,200

£1,797,500

CEO

£1,569,000

Minimum

Maximum

Target

Fixed pay

2,000,000

200,000

1,200,000

400,000

1,400,000

1,800,000

1,600,000

Annual bonus Long-term incentive

800,000

1,000,000

600,000

Maximum +50%

share price growth

£432,400

38.0%

35.6%

26.4%

43.2%

26.9%

29.9%

20.9%

60.3%

18.8%

100.0%

£717,400

£1,137,400

CFO

£1,002,400

(1) Fixed pay comprises salary for the financial year beginning 1July2023, RSUs, benefits and cash

allowance in lieu of pension.

(2) Bonus includes both the cash element and the deferred share element but it is assumed that no

voluntary deferral takes place and therefore no matching award is made.

(3) Assumptions when compiling the charts are:

• minimum = fixed pay only (i.e. salary, RSUs face value at grant (i.e. 30% of annual salary), benefits

and pension);

• target = fixed pay plus 50% of annual bonus payable and 50% vesting of LTIP;

• maximum = fixed pay plus 100% of annual bonus payable and 100% of LTIP vesting; and

• maximum +50% share price growth = fixed pay plus 100% of annual bonus payable and 100% of LTIP

vesting at a 50% higher share price than when the LTIP was awarded.

Directors’ report

129 McBride plc Annual Report and Accounts 2023

Remuneration Committee report continued

Directors’ Remuneration Policy continued

External appointments

Executive Directors are permitted, where appropriate and with Board approval, to assume non-executive directorships of other organisations. Where the Company releases the

Executive Directors to carry out non-executive duties, they will be required to disclose the fact that they retain any earnings and the amount of suchremuneration. During the

yearended 30 June 2023, neither Executive Director held any external non-executive directorships.

Non-Executive Directors’ letters of appointment

Set out below is information regarding the dates of the letters of appointment and notice periods for the Chairman and the Non-Executive Directors.

Copies of the letters of appointment are available for inspection at the Company’s registered office.

Director

(1)

Latest letter of

appointment

Date first appointed

to the Board Notice period

(2)

Jeff Nodland 21/06/2019 26/06/2019 3 months

Steve Hannam

(3)

03/09/2019 04/02/2013 3 months

Elizabeth McMeikan 14/11/2019 14/11/2019 3 months

Igor Kuzniar

(4)

31/05/2019 03/06/2019 3 months

Alastair Murray 01/07/2021 02/08/2021 3 months

Regi Aalstad 17/02/2022 14/03/2022 3 months

(1) All Directors stand for re-election on an annual basis at the AGM.

(2) Terminable at the discretion of either party. Appointments may be terminated without compensation in the event of them not being re-elected by shareholders or otherwise in accordance with the Articles.

Appointments are of an unlimited duration subject to note 1 above.

(3) Steve Hannam stepped down as a Non-Executive Director on 16 November 2022.

(4) Igor Kuzniar stepped down as a Non-Executive Director on 31 May 2023. The Board agreed to dispense with the requirement to provide three months’ notice.

Any appointment for more than nine years in total will be subject to annual review by the Board, as well as shareholder approval. Consideration will be given to the importance of

refreshing the membership of the Board and avoiding any undue reliance on any particular individual, whilst assessing the contribution made by that individual, together with the

ongoing commitment required to the role and the benefit gained from any continuity of handover with newer members of the Board. Further information on the Board’s assessment

ofindependence and succession planning can be found in the Nomination Committee report on pages 102 and 104 to 105.

Directors’ report

130 McBride plc Annual Report and Accounts 2023

Application of the shareholder-approved 2020 Remuneration Policy for 2023

Single total remuneration figure for the Executive Directors (audited)

The table below sets out a single total remuneration figure for the position of the Executive Directors in office for the 2023 financial year:

Fixed remuneration Performance-related remuneration

Total

£’000

Base

salary

£’000

RSU

(1,2)

£’000

Benefits

(3)

£’000

Pension

(4)

£’000

Total fixed

remuneration

£’000

Annual

bonus

£’000

LTI Ps

£’000

Total variable

remuneration

£’000

Chris Smith

2023 448 66 24 36 574 425 — 425 999

2022 439 66 24 35 564 — — — 564

Mark Strickland

2023 282 40 17 23 362 267 — 267 629

2022 264 40 17 21 342 — — — 342

(1) RSU grants have been included for Chris Smith as follows: (i) a grant made 11 June 2021, with 345/365ths of this included in 2021/22, (ii) a grant made 13 June 2022, with 18/365ths of this included in 2021/22 and the

remaining 347/365ths of this included in 2022/23, and (iii) a grant made 12 June 2023, with 19/366ths of this included in 2022/23 and the remaining 347/366th of this to be included in 2023/24. All grants are valued

using the closing share price for the day prior to the date of grant. The 2022 RSU has been restated above using the share price at grant as an error in the share price used last year was identified in this calculation

during preparation of the 2023 figures. The restatement increases the single figure value by £2,000.

(2) RSU grants have been included for Mark Strickland as follows: (i) a grant made 25 February 2021 covering the eight-month period January 2021 to August 2021, with 2/8ths of this included in 2021/22, (ii) a grant

made 9September 2021, with 10/12ths of this included in 2021/22 and the remaining 2/12ths of this included in 2022/23, and (iii) a grant made 3 October 2023, with 10/12ths of this included in 2022/23 and the

remaining 2/12ths of this to be included in 2023/24. All grants are valued using the closing share price for the day prior to the date of grant.

(3) Benefits consist of the provision of a company car and fuel (or cash equivalent), private healthcare, disability insurance and life cover. Note that the figures reported in 2022 did not include disability insurance and life

cover, these have been restated above to reflect the inclusion of both benefits.

(4) The pension figure represents the value of the Company’s contribution to the individual’s pension scheme and/or the cash value of payments in lieu of pension contribution.

Pension (audited)

Both Chris Smith and Mark Strickland receive a pension supplement in lieu of contributions to a pension scheme of 8% of salary, which is in line with that available to the majority of the

UKgeneral workforce. The Company has a contracted agreement with the Executive Directors that this payment relieves the Company of any liability for pension provision on theirbehalf.

Annual bonus (audited)

For the 2023 financial year, the maximum bonus opportunity for the Executive Directors was 100% of base salary. 80% of bonus was based upon financial performance and 20% for

performance against demanding specific measurable personal objectives. Based on the outcomes of the financial and personal elements (as set out below), the Executive Directors

both received a total bonus of 95% of salary (representing 95% of the maximum bonus opportunity).

Remuneration Committee report continued

Annual Report on Remuneration

Directors’ report

131 McBride plc Annual Report and Accounts 2023

Remuneration Committee report continued

Annual Report on Remuneration continued

Annual bonus (audited) continued

Financial element outcomes

The financial element of the bonus consisted of Group adjusted EBITA targets (40% of bonus) and Trade Working Capital targets (40%), as set out below:

Performance targets Actual

performance

Pay-out

(% of salary) Threshold Target Stretch

Group adjusted EBITA

(1,2)

£1.0m £4.7m £15.0m £13.0m 37%

Trade Working Capital vs. budget

(3)

Q1 (0.5)% — (2.0)% (5.2)% 10%

Q2 (0.5)% — (2.0)% (4. 9)% 10%

Q3 (0.5)% — (2.0)% (4.4)% 10%

Q4 (0.5)% — (2.0)% (3.8)% 10%

(1) Excludes amortisation of intangibles and exceptional costs.

(2) EBITA as a percentage of target will be calculated on a straight-line basis between the threshold and target and between target and stretch.

(3) Trade Working Capital is measured quarterly against budget. Budget for each quarter was 17.1% (Q1), 16.1% (Q2), 14.8% (Q3) and 14.4% (Q4).

Personal element outcomes

Both Executive Directors were set two personal objectives to be measured as a whole, weighted at a maximum of 20% as follows:

1. For both Executive Directors: Ensure the Business Excellence team is fully staffed with defined objectives, KPIs and milestones for the identified improvement objectives.

2. For Chris Smith: Deliver the envisaged reset of the logistics function and complete the TMS rollout following stabilisation of current challenges.

3. For Mark Strickland: Develop the long-term plan, timing, costs and benefits for the business processes simplification and the ERP system to support the Transformation agenda.

Chris and Mark performed very strongly against their personal objectives throughout the year. All objectives relating to the Business Excellence team were achieved, the reset of the

logistics function had progressed smoothly by the end of the year with second half service performance levels significantly exceeding the target, and the long-term plan was

developed effectively with projects underway. Based on their performance, the Committee determined that the first objective (applicable to both Executive Directors) was met in full

and that the second and third objectives were each 80% met. This resulted in an overall pay-out for both Executive Directors of 90% of the 20% allocated to the personal objectives

and therefore a pay-out of 18% of salary for both Executive Directors.

Directors’ report

132 McBride plc Annual Report and Accounts 2023

LTIP (audited)

In the year under review, LTIP awards were granted to both Executive Directors in October 2022 under the McBride plc 2014 LTIP. These awards were granted in the form of conditional

share awards.

Detailed assumptions used in calculating the fair value of the awards are outlined in note 23 to the consolidated financial statements on page 207.

Interests of Directors under the McBride plc 2014 LTIP at 1 July 2022 and 30 June 2023 are set out below:

Director

Date of

award

Number of

awards at

1 July

2022

Allocated

in year

Awards

vested in

year

Allocations

lapsed

in year

Number of

awards at

30 June

2023

Market price

the day

before the

date of

award (£)

Vesting

date

Performance

period

Chris Smith 07/1 0/2019 585,870 — — 585,870 — 0.552 08/10/2022 1 July 2019-

30 June 2022

10/09/2020 877,016

(1)

— — — 877,016 0.62 10/09/2023 1 July 2020-

30 June 2023

09/09/2021 716,955 — — — 716,955 0.766 09/09/2024 1 July 2021-

30 June 2024

03/10/2022 — 1,569,107

(2)

— — 1,569,107 0.35

(2)

03/10/2025 1 July 2022-

30June 2025

Total 2,179,841 1,569,107 — 585,870 3,163,078

Mark Strickland 25/02/2021 178,378

(1)

— — — 178,378 0.8140 25/02/2024 1 July 2020-

30 June 2023

09/09/2021 379,112 — — — 379,112 0.766 09/09/2024 1 July 2021-

30 June 2024

03/10/2022 — 829,714

(2)

— — 829,714 0.35

(2)

03/10/2025 1 July 2022-

30June 2025

Total 557,490 829,714 — — 1, 387, 204

(1) The LTIP awards granted on 10 September 2020 to Chris Smith and on 25 February 2021 to Mark Strickland were based on performance over the three years to 30 June 2023. On 11 July 2023, the Committee reviewed

the related performance conditions (as detailed in the tables on the following pages) and determined that the Company had not achieved threshold performance in either element and therefore the award granted to

Chris Smith lapsed on 10 September 2023 and the award granted to Mark Strickland will lapse on 25 February 2024.

(2) Awards were granted in the year on the basis of 125% of salary for Chris Smith and 110% of salary for Mark Strickland using a share price of 35 pence. The face values of the awards based on a share price of

35pence were as follows: Chris Smith: £549,187 and Mark Strickland: £290,400, however the face values of the awards based on the market price the day prior to the date of award of 23.55 pence were as follows:

ChrisSmith:£369,525 and Mark Strickland: £195,398, which represented 84% and 74% of their salaries respectively.

Remuneration Committee report continued

Annual Report on Remuneration continued

Directors’ report

133 McBride plc Annual Report and Accounts 2023

LTIP (audited) continued

The performance conditions attaching to awards under the LTIP included in the preceding table are:

Grant September 2020, Grant February 2021 and Grant September 2021

(a) 50% of the award is subject to a ROCE performance condition. ROCE is defined as the adjusted operating profit

(1)

as a percentage of average capital employed in the period.

Operating profit is defined as EBITA adjusted for the amortisation of tangible assets and exceptional items. Capital employed is defined as tangible and intangible fixed assets,

including goodwill plus inventories and current trade and other receivables less current trade and other payables.

ROCE

Grant Sept 2020 and February 2021

% of total award

vesting (max 50%)

(2)

<14.8% —

14.8% 5 (threshold)

17.2% 25 (target)

18.6% 50 (maximum)

Average ROCE over the performance period for the above awards was 4%, which was below the threshold.

ROCE

Grant Sept 2021

% of total award

vesting (max 50%)

(2)

<11.6% —

11.6% 5 (threshold)

14.0% 25 (target)

15.4% 50 (maximum)

(1) Please refer to APM in note 2.

(2) The awards vest on a straight-line basis between threshold and target and between target and maximum.

(b) 50% of the award is subject to an EPS performance condition as set out in the table below.

EPS Compound Annual Growth Rate (CAGR)

(1)

Grant Sept 2020 and February 2021

% of total award

vesting (max 50%)

(2)

<7.0% p.a. —

7.0% p.a. 5 (threshold)

14.3% p.a. 25 (target)

21.1% p.a. 50 (maximum)

For 2023, the threshold of 7% p.a. growth was not met.

EPS Compound Annual Growth Rate (CAGR)

(1)

Grant Sept 2021

% of total award

vesting (max 50%)

(2)

<12.6% p.a. —

12.6% p.a. 5 (threshold)

21.95% p.a. 25 (target)

31.3% p.a. 50 (maximum)

(1) Adjusted to include effects of amortisation of intangible assets and exceptional items.

(2) The awards vest on a straight-line basis between threshold and target and between target and maximum.

Remuneration Committee report continued

Annual Report on Remuneration continued

Directors’ report

134 McBride plc Annual Report and Accounts 2023

LTIP (audited) continued

ROCE and EPS performance are measured over the period of three consecutive financial years of the Company, beginning with the year of grant of the award. There will be no

resetting or retesting of the performance conditions, other than in exceptional circumstances as set out on page 123.

Grant October 2022

(a) 50% of the award is subject to a net debt to EBITDA ratio performance condition. EBITDA means adjusted EBITDA which is defined as adjusted operating profit before

depreciation. Net debt to EBITDA ratio is net debt as divided by EBITDA.

Net debt to EBITDA ratio

% of total award

vesting (max 50%)

(1)

>3.5x —

3.5x 5 (threshold)

2.8x 50 (maximum)

(1) The awards vest on a straight-line basis between threshold and target and maximum.

(b) 50% of the award is subject to an EPS performance condition as set out in the table below.

EPS for financial year ending 30 June 2025

(1)

% of total award

vesting (max 50%)

(2)

<8.0p —

8.0p 5 (threshold)

11.0p 50 (maximum)

(1) Adjusted to include effects of amortisation of intangible assets and exceptional items.

(2) The awards vest on a straight-line basis between threshold and maximum.

Net debt to EBITDA and EPS performance are measured over the period of three consecutive financial years of the Company, beginning with the year of grant of the award. There will

be no resetting or retesting of the performance conditions, other than in exceptional circumstances as set out on page 123.

Remuneration Committee report continued

Annual Report on Remuneration continued

Directors’ report

135 McBride plc Annual Report and Accounts 2023

Restricted Share Unit Plan (RSU) (audited)

The RSU was approved by shareholders at the 2020 AGM on 23 November 2020. In the year under review, RSU awards were granted to Chris Smith and Mark Strickland under the

McBride plc 2020 RSU. These awards were granted in the form of conditional share awards.

Interests of Directors under the McBride plc 2020 RSU at 1 July 2022 and 30 June 2023 are set out below:

Director

Date of

award

Number of

awards at

1 July

2022

Allocated

in year

Awards

vested in

year

Allocations

lapsed

in year

Number of

awards at

30 June

2023

Market price

the day

before the

date of

award (£)

Vesting

date

Chris Smith 23 December 2020

(1)

98,864 — (98,864) — — 0.66

(1)

11 June 2023

(1)

11 June 2021

(2)

74,382 — — — 74,382 0.886 11 June 2024

13 June 2022

(3)

216,073 — — — 216,073 0.305 13 June 2025

12 June 2023

(4)

— 254,317 — — 254,317 0.2695 12 June 2026

Total 389,319 254,317 (98,864) — 544,772

Mark Strickland 25 February 2021

(5)

32,432 — — — 32,432 0.814 25 February 2024

9 September 2021

(6)

51,697 — — — 51,697 0.766 9 September 2024

3 October 2022

(7)

— 169,957 — — 0.233 3 October 2025

Total 84,129 169,957 — — 254,086

(1) The RSU plan was approved by shareholders at the 2020 AGM on 23 November 2020. Following the approval of the RSU, McBride plc resolved to grant RSU awards on 23 December 2020, with a deemed grant date

of 11 June 2021, being the date that Chris Smith was appointed as CEO. This led to two grants in the financial year 2021. This was because the award formed part of his CEO remuneration package from his date of

appointment. The share price disclosed of £0.66 was the closing share price on 10 June 2021 which was used by the Committee to determine the number of shares subject to the award such that the total value would

be 15% of his salary and has therefore been included above. Based on this price, the face value of the award was £65,250, being 15% of his base salary. The closing share price on the day prior to the actual date of

grant was£0.886. This award vested on 11 June 2023, and an additional 1,648 shares vested in relation to dividends accrued during the vesting period.

(2) The face value of the award granted to Chris Smith on 11 June 2021 was £65,902, being 15% of his base salary.

(3) The face value of the award granted to Chris Smith on 13 June 2022 was £65,902, being 15% of his base salary.

(4) The face value of the award granted to Chris Smith on 12 June 2023 was £68,538, being 15% of his base salary.

(5) The face value of the award granted to Mark Strickland on 25 February 2021 was £26,400, being 15% of 8/12ths of his base salary (as the RSU award was only meant to cover the period from January to August with

future awards being made in September each year).

(6) The face value of the award granted to Mark Strickland on 9 September 2021 was £39,599, being 15% of his base salary.

(7) The face value of the award granted to Mark Strickland on 3 October 2022 was £39,600, being 15% of his base salary.

Remuneration Committee report continued

Annual Report on Remuneration continued

Directors’ report

136 McBride plc Annual Report and Accounts 2023

Deferred Annual Bonus Plan (DBP) (audited)

No awards were made under the McBride plc 2012 Deferred Annual Bonus Plan during the year. Neither of the Executive Directors currently have any outstanding awards under this plan.

Single total remuneration figure for the Non-Executive Directors (audited)

2023 2022

Base

fee

£’000

Committee

Chair/

SID fee

£’000

Benefits

(1)

£’000

Total

£’000

Base

fee

£’000

Committee

Chair/

SID fee

£’000

Benefits

(1)

£’000

Total

£’000

Jeff Nodland

(2)

200 — 60 260 200 — 49 249

Steve Hannam

(3)

19 3 — 22 50 8 — 58

Igor Kuzniar

(4)

46 — 1 47 50 — 1 51

Elizabeth McMeikan

(5)

50 13 2 65 50 8 — 58

Alastair Murray

(6)

50 9 1 60 46 6 — 52

Regi Aalstad

(7)

50 — 1 51 15 — — 15

(1) Benefits comprise reimbursement of expenses on a gross of tax basis incurred by Non-Executive Directors in the course of carrying out their roles which are considered by HMRC to be taxable.

(2) Jeff Nodland received a travel allowance of £50,000 during the year.

(3) Steve Hannam resigned from the Board on 16 November 2022.

(4) Igor Kuzniar resigned from the Board on 31 May 2023.

(5) Elizabeth McMeikan was appointed Senior Independent Director on 17 November 2022.

(6) Alastair Murray joined the Board on 2 August 2021 and was appointed Chair of the Audit and Risk Committee on 19 October 2021.

(7) Regi Aalstad joined the Board on 14 March 2022.

Remuneration Committee report continued

Annual Report on Remuneration continued

Directors’ report

137 McBride plc Annual Report and Accounts 2023

Statement of Directors’ shareholding and share interests (audited)

At 30 June 2023

At 18

September 2023 At 1 July 2022

Total shares

beneficially

owned

(1)

Value

of shares

£’000

of annual

base salary

Shareholding

requirement/

guideline %

(2)

Shareholding

requirement/

guideline met

(2)

Conditional

awards

(3)

holding

Total shares

beneficially

owned

(1)

Conditional

awards

(3)

Jeff Nodland 664,600 175.8 87.9% 100 Below guideline N/A 664,600 664,600 N/A

Steve Hannam

(4)

75,126 18.2 36.4% 100 Below guideline N/A N/A

(6)

75,126 N/A

Igor Kuzniar

(5)

— — — N/A — N/A N/A — N/A

Elizabeth McMeikan 29,000 7.7 15.4% 100 Below guideline N/A 29,000 29,000 N/A

Alastair Murray — — — 100 Below guideline N/A — — N/A

Regi Aalstad 80,000 21.2 42.4% 100 Below guideline N/A 80,000 80,000 N/A

Chris Smith

(6)

537,440 142.4 25.8% 300 Below requirement 3,707,850 436,928 436,928 2,569,160

Mark Strickland

(7)

95,923 25.4 9.0% 200 Below requirement 1,641,290 95,923 45,923 641,619

(1) Changes in the current Directors’ interests in shares in the Company and those of their Connected Persons between the end of the financial year and 18 September 2023 are shown in the table above.

(2) Executive Directors have a shareholding requirement equal to a multiple of base salary; 300% in the case of the CEO and 200% in the case of the CFO which they are expected to reach within five years of their

appointment. NEDs have a shareholding guideline equivalent to 100% of their annual base fee.

(3) The conditional share awards have been made under the McBride plc 2014 LTIP, 2020 Restricted Share Unit Plan and the 2020 Deferred Annual Bonus Plan. The conditions to which the share awards are subject are

set out on pages 133 to 137.

(4) Steve Hannam stepped down from the Board on 16 November 2022. This sets out his shareholding as at the date he stepped down from the Board.

(5) Igor Kuzniar was the appointed representative of McBride plc’s largest shareholder Teleios Capital Partners GmbH and therefore the NED guidelines do not apply to him. He stepped down from the Board on 31 May 2023.

(6) Of the CEO’s 3,707,850 shares subject to conditional awards (2022: 2,569,160), 544,772 were granted as RSUs and hence are not subject to performance measures and are only subject to continued employment.

(7) Of the CFO’s 1,641,290 shares subject to conditional awards (2022: 641,619), 254,086 were granted as RSUs and hence are not subject to performance measures and are only subject to continued employment.

None of the Directors had any interest in the shares of any subsidiary company.

Remuneration Committee report continued

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Directors’ report

138 McBride plc Annual Report and Accounts 2023

Shareholder dilution

Awards under executive share plans are currently being satisfied either using newly issued

shares or using market purchase shares acquired by the Employee Benefit Trust (which

held 486,647 shares at 30 June 2023 that were available to satisfy subsisting awards).

There are no all-employee share plans. The Company monitors the number of shares

issued and issuable under these schemes and their impact on dilution limits.

The Company’s maximum percentage of shares that have been or can be issued under the

executive share plans compared with the dilution limits set by the Investment Association

in respect of executive share plans (5% in any rolling ten-year period) as at 30 June 2023

is as follows:

Executive share plans

Actual 3.17%

Limit 5.0%

Review of past performance

The graph below charts the TSR (share value movement plus reinvested dividends),

over the ten years to 30June2023, of shares in McBride plc compared with that of a

hypothetical holding in the FTSE SmallCap Ex. Investment Companies Index. The Directors

consider this index to be an appropriate comparator group for assessingthe Company’s

TSR as it provides a well-defined, understood and accessible benchmark.

McBride FTSE SmallCap

Jun

100

150

200

250

Jun

300

This graph shows the value, by 30 June 2023, of £100 invested in McBride plc on

30June2013, compared with the value of £100 invested in the FTSE SmallCap

Ex.Investment Companies Index on the same date.

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Directors’ report

139 McBride plc Annual Report and Accounts 2023

Review of past performance continued

The following table shows the historic Chief Executive Officers’ levels of total remuneration (single figure of total remuneration), together with annual bonus and LTIP awards as a

percentage of the maximum available.

CEO/financial year

Total

remuneration

£’000

Annual

bonus % of

maximum

LTIP % of

maximum

vested

(6)

Chris Smith

(1)

2023 999 95.0 —

2022 552 — —

2021 551 — —

2020

(2)

497 24.8 —

Ludwig de Mot

(3)

2020

(2)

368 — —

Rik De Vos

(4)

2019 592 — —

2018 890 — 62.5

2017 1,169 70.8 100.0

2016 893 98.5 —

2015 357 89.0 —

Chris Bull

(5)

2015 253 — —

2014 512 — —

(1) Chris Smith was appointed CEO with effect from 11 June 2020 having previously been CFO since 15 July 2014.

(2) For 2020, the total remuneration has been adjusted to reflect the period served as CEO.

(3) Ludwig de Mot was appointed CEO with effect from 1 November 2019 and left the business on 10 June 2020.

(4) Rik De Vos was appointed CEO with effect from 2 February 2015 and left the business on 31 August 2019.

(5) Chris Bull was appointed CEO with effect from 4 May 2010 and left the business on 18 December 2014.

(6) The LTIP % of maximum is the percentage of shares vesting compared to the maximum that could have vested.

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Directors’ report

140 McBride plc Annual Report and Accounts 2023

Annual percentage change in remuneration of Directors and employees

The table below shows the annual percentage change in remuneration of Directors and UK employees over the last four financial years. Although the Company has an international

workforce, this group has been chosen as it continues to represent the most meaningful comparator group to compare to the UK-based Executive Directors. Where there are no prior

years to compare to, the value is marked as not applicable.

Salary/fees change

(1)

Benefits change

(1)

Bonus change

(1)

2020 2021 2022 2023 2020 2021 2022 2023 2020 2021 2022 2023

Executive Directors

Chris Smith

(2)

17.0% 27.0% 0.5% 2.0% 22.8% (6.6)% (2.0)% 2.6% N/A (100.0)% N/A 100.0%

Mark Strickland

(3)

N/A N/A 96.5% 6.8% N/A N/A 102.6% 2.4% N/A N/A N/A 100.0%

Non-Executive Directors

Steve Hannam — 8.7% 2.7% (61.7)% 89.9% (100.0)% — — N/A N/A N/A N/A

Igor Kuzniar N/A — 2.6% (8.3)% N/A (100.0)% 100.0% (16.5)% N/A N/A N/A N/A

Elizabeth McMeikan N/A 91.6% 2.7% 8.6% N/A — — 100.0% N/A N/A N/A N/A

Alastair Murray N/A N/A N/A 13.8% N/A N/A N/A 87.8% N/A N/A N/A N/A

Regi Aalstad N/A N/A N/A 229.1% N/A N/A N/A 100.0% N/A N/A N/A N/A

Jeff Nodland

(4)

N/A 62.9% — — N/A (95.9)% 3,602.8% 22.2% N/A N/A N/A N/A

Comparator group

Average for UK employees

(5)

1.3% 7.6% 2.1% 3.6% N/A (65.7)% (21.5)% (6.3)% 9.5% 417.4% (17. 5)% 266.1%

(1) Footnotes in relation to 2020, 2021 and 2022 percentage changes can be found in the Annual Report and Accounts for the relevant year.

(2) No bonus was paid in respect of 2019, 2021, 2022 and 2023.

(3) Mark Strickland was appointed CFO partway through 2021 on 4 January 2021, hence the significant percentage increase in salary and benefits in2022 when he served a full year.

(4) The Chairman received a travel allowance of £50,000 during 2023 and £45,833 during 2022, whereas in 2021 he only received £1,323 as a result of Covid-19-related restrictions on travel, resulting in the significant

percentage increase in benefits between 2021 and 2022.

(5) The calculations for the comparator group are based upon the average values for UK-based employees (other than Directors) that were employedbyRobert McBride Ltd versus the same criteria for the previous

financial year. Last financial year there were 471 employees in the comparatorgroup versus 476 employees at the end of this financial year. Pension benefits and long-term incentive awards are excluded from the

calculation. The comparator group data is being reported in this way as all of the employees of McBride plc are Directors and therefore the comparisonrequired by the Regulations cannot be shown.

Remuneration Committee report continued

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Directors’ report

141 McBride plc Annual Report and Accounts 2023

CEO pay ratio

Under Option B of The Companies (Miscellaneous Reporting) Regulations 2018, the latest available gender pay gap data was used to identify the best equivalent comparison for the

three UK-based employees whose pay is at the 25th, 50th (median) and 75th percentiles of the comparator group. There were 458 UK-based employees in the comparator group.

Thiscalculation methodology was selected as it provides the most consistent company approach for identifying meaningful equivalents which are reasonably representative of the

percentiles and are aligned to our approach to UK gender pay gap reporting. The employees identified as the best equivalents are deemed reasonably representative as their incentive

outcomes and pay structures are representative of the wider population.

The ratios shown in the table compare the total remuneration for the relevant UK-based employees to the current CEO single total remuneration figure. The ratios have increased in

2023, primarily as a result of the payment of an annual bonus to the Executive Directors, which was not paid in the previous two years. Our ratio for 2023 of 22.8:1 to our median

employee total remuneration is also significantly lower than the median of the ratios in other FTSE SmallCap Companies, which is around 27:1. This pay ratio is consistent with the pay,

reward and progression policies applicable to the Company’s employees as a whole. All employees are eligible for incentives, which can vary from year to year, salaries are based on

role size and market benchmarks, and there are similar pension contributions (in terms of percentage of salary) for the Executive Directors compared to the median employee. It is

alsoworth noting that the CEO’s single figure for 2020 was calculated using a cumulative pro-rata single figure to represent the pay of the three different CEOs that had been

appointed throughout that year.

Year Method

25th percentile

pay ratio

Median

pay ratio

75th percentile

pay ratio

2023

(1)

Option B 28.2:1 22.8:1 18.3:1

2022

(1)

Option B 17.8:1 14.8:1 9.6:1

2021

(1)

Option B 20.5:1 16.6:1 11.1:1

2020 Option B 23.1:1 19.7:1 14.2:1

(1) The ratios shown in the table compare total remuneration for the three relevant UK-based employees to a CEO single total remuneration figure that includes base salary, RSUs, benefits and pension only as there were

no incentive payments in respect of 2021 and 2022. Typically, a significant proportion of the CEO’s pay is delivered through incentives where performance conditions are met.

The table below shows the total remuneration and salary for each quartile of UK employees over the financial year 1 July 2022 to 30 June 2023.

25th

percentile Median

75th

percentile

Salary £32,900 £38,819 £50,280

Total remuneration £35,493 £43,863 £54,606

Relative importance of spend on pay

The table below shows the total amount of distributions to shareholders and the amount paid to buy back shares compared to the total payroll costs for the Group for the financial

years ended 30 June 2022 and 30 June 2023.

Year ended

30 June

2022

£m

Year ended

30 June

2023

£m % change

Shareholder distribution — — n/a

Amounts paid to buy back shares

(1)

0.1 — (100)%

Total payroll costs

(2)

(of all Group employees including Directors) 126.2 146.0 15.7

(1) As disclosed in the prior year, the share buy-back programme, which commenced on 2 November 2020, ended on 7 September 2021. Amounts paid to buy back shares of £0.1m in 2022 have been included here for

completeness.

(2) Total payroll costs exclude termination benefits.

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Directors’ report

142 McBride plc Annual Report and Accounts 2023

Compliance with the UK Corporate Governance Code

The table below summarises how we have complied with the Code during the year.

Remuneration provision of the Code Alignment with Policy

Five-year period between the date of grant and realisation

of equity incentives

The LTIP has a three-year performance period and a two-year post-vesting holding requirement.

Post-cessation shareholding requirement There is a formal post-cessation holding policy, requiring Executive Directors to maintain their in-employment

shareholding for a minimum of twelve months post-cessation.

Pension alignment The pension contribution/allowance for all Executive Directors is aligned with the workforce level of 8% of salary.

Only basic salary is pensionable.

Discretion to override formulaic outcomes Discretion to override formulaic outcomes and scale back awards is included for the annual bonus and Long-Term

Incentive Plan.

Extended malus and clawback Malus and clawback triggers apply to the RSU, annual bonus (both cash and deferred) and Long-Term Incentive

Plan in the event of an error in calculation, a material misstatement of the financial results, serious misconduct by a

participant, corporate failure or reputational damage.

Notice periods should be a year or less Executive Directors have a six-month notice period.

Application of the Remuneration Policy for the 2024 financial year

The table below sets out how the Remuneration Policy is intended to be applied for the 2024 financial year for Chris Smith and Mark Strickland. Changes to the way the Remuneration

Policy will be implemented in the current financial year compared to the previous financial year are highlighted in the table below.

Element Application of Policy for 2024 Explanation

Executive Director base

salary

The Executive Directors’ salaries for the 2024 financial year will be

£456,924 for the CEO and £300,000 for the CFO.

Salaries were last increased by the Committee with effect from

1January2023 and will be reviewed in the normal way during the year

with any change taking effect from 1 January 2024.

RSUs An award of 15% of salary was made to Chris Smith on 12 June 2023 in

line with the current Remuneration Policy and the RSU plan, in respect of

the twelve-month period from 12 June 2023.

It is intended that an award of 15% of salary will be made to Mark

Strickland during September 2023 in line with the current Remuneration

Policy and the RSU plan, in respect of the twelve-month period from

1September 2023.

It is intended that further awards of 15% of salary are made to Chris and

Mark following the 2023 AGM.

The initial awards are in line with the current Remuneration Policy.

Assuming the new Remuneration Policy and the amendments to the RSU

plan are approved by shareholders at the AGM, the proposed awards

after the AGM will ensure that the total level of RSU awards is increased

to 30% in line with the new Remuneration Policy.

Benefits Pension contribution (or cash allowance in lieu of pension) of 8%

ofsalary. Car allowance of £13,200 per annum and private medical

coverage of £1,450 per annum.

Pension and private medical allowance is fully aligned with the majority

of the UK general workforce.

Car allowance is based on the Company Car Policy.

Remuneration Committee report continued

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Directors’ report

143 McBride plc Annual Report and Accounts 2023

Element Application of Policy for 2024 Explanation

Annual bonus The structure and operation of the annual bonus scheme will continue

inline with the previous financial year. The maximum bonus opportunity

continues to be 100% of salary. 40% of the award will be subject to a

sliding scale of challenging operating profit targets, 40% of the award

will be subject to a sliding scale of working capital targets and 20% will

be subject to specific measurable personal targets.

The Committee considers that the forward-looking targets are

commercially sensitive and has, therefore, chosen not to disclose them

in advance. Details of the targets will be set out retrospectively in next

year’s Remuneration report; however, the targets are considered to be

demanding in the context of the Company’s circumstances.

LTIP The LTIP awards to be granted in 2024 will be subject to EPS and ROCE

performance conditions with equal weighting.

EPS will be assessed by reference to the cumulative EPS achieved for

the 2024, 2025 and 2026 financial years and ROCE will be assessed by

reference to the average ROCE achieved for each of the 2024, 2025 and

2026 financial years.

It is intended that awards will be made under the existing plan in

September. The intended Executive Director grant level for the LTIP is

100% of salary for the CEO and 90% of salary for the CFO.

The targets for the 2024 awards are expected to be as follows:

Target

Threshold

(10% of

part subject to

target)

Threshold

(50% of

part subject

to target)

Threshold

(100% of part

subject to target)

Cumulative EPS

for three years

21.7p 32.4p 43.1p

Average ROCE

over three years

15.0% 19.4% 23.8%

The EPS performance measure continues to be selected as it is one of

the KPIs used in the business and is a measure well understood by the

senior executives. It is also something which they can influence directly.

Given the inherent volatility of earnings for the Company, due to external

factors, the Committee believes it is more appropriate to measure

cumulative EPS over the full three years rather than just measure EPS for

the last year of the performance period as has been done in the past.

Last year we replaced ROCE with a net debt to EBITDA ratio given

the critical importance at that time of maintaining a healthy cash flow

and level of debt relative to profit. Whilst this remains important, the

Committee believes that it is now appropriate to switch back to ROCE

for the second performance condition. ROCE is a key KPI in the business,

widely used in the investment community and an appropriate measure

given the capital intensity of the business.

The intended grant levels for the LTIP are being reduced from 125% and

110% of salary for the CEO and CFO respectively to 100% and 90% in

line with the new Remuneration Policy which allows for an additional

RSU award of 15% of salary to both Executive Directors as part of a

rebalancing of the package.

The intended performance targets are based on the three-year plan and

are considered by the Committee to be appropriately demanding.

Non-Executive Director

fees

The fee policy for the Chairman and Non-Executive Directors is as

follows:

• base Chairman fee: £210,000;

• base Non-Executive Director fee: £52,500;

• Chair of the Audit and Risk Committee: £9,450 (additional fee);

• Chair of the Remuneration Committee: £8,400 (additional fee);

• Senior Independent Director: £8,400 (additional fee);

• international travel allowance for the Chairman up to £50,000; and

• international travel allowance for NEDs based overseas up to £15,000.

The Chairman’s fees were reviewed this year having last been reviewed

in 2020. The Committee agreed that a 5% increase should be made

with effect from 1 July 2023 to ensure they remained at a level that was

appropriate to reflect both the market rate and the time commitments

of the role. The other NED fees were reviewed by the Board (excluding

the NEDs) this year having last been reviewed in 2020. The Board agreed

that a 5% increase should be made to the base fee and committee

chair fees with effect from 1July2023 to ensure they remained at a

level that was appropriate to reflect both the market rate and the time

commitments of the role.

There remains no current intention to provide an additional travel

allowance for any Non-Executive Director.

Remuneration Committee report continued

Annual Report on Remuneration continued

Application of the Remuneration Policy for the 2024 financial year continued

Directors’ report

144 McBride plc Annual Report and Accounts 2023

Exit payments (audited)

No exit payments were made to Executive Directors in the financial year.

Payments to past Directors (audited)

No payments to past Directors were made in the financial year.

Payments to third parties

No payments were made to third parties for making available the services of any of the Directors during 2023.

Remuneration Committee and advisers

At the time of this report, the members of the Remuneration Committee are Elizabeth McMeikan (Chair), Jeff Nodland, Regi Aalstad and Alastair Murray. In determining the

remuneration structure, the Committee appoints and receives advice from independent remuneration consultants on the latest developments in corporate governance and the pay and

incentive arrangements prevailing in comparably sized manufacturing companies. Alvarez & Marsal Tax LLP (‘A&M’) were appointed by the Committee in June 2020 when the lead

adviser moved from Aon plc to A&M. A&M received £126,685 in respect of the services provided for the 2023 financial year. A&M is a member of the Remuneration Consultants Group

and is asignatory to its Code of Conduct which sets out guidelines to ensure that any advice is independent and free of undue influence. Alvarez & Marsal Europe Holdings Limited

also provided advisory services related to working capital management in the year.

The Committee is satisfied that the advice provided by A&M was independent and objective. The Committee has reviewed the relationship with the adviser and is satisfied that the

team who provided that advice do not have any connection to McBride that may impair their independence or objectivity.

Statement of shareholder voting

The table below shows the voting outcome at the October 2022 AGM for the approval of the Company’s 2022 Remuneration report, and the voting outcome at the October 2020 AGM

for the approval of the Directors’ Remuneration Policy:

Resolution

Votes

for %

Votes

against %

Votes

withheld

Approval of Remuneration report (advisory vote at the 2022 AGM) 129,672,054 99.68% 418,962 0.32% 14,527

Approval of the Directors’ Remuneration Policy (binding vote at the 2020 AGM) 116,222,303 87.59% 16,470,143 12.41% 11,311

The Remuneration report was approved by the Board on 18 September 2023 and signed on its behalf by:

Elizabeth McMeikan

Chair of the Remuneration Committee

Remuneration Committee report continued

Annual Report on Remuneration continued

Directors’ report

145 McBride plc Annual Report and Accounts 2023

Statutory information

Reporting requirements

The Group is required to produce a Strategic report complying with the requirements of

section 414A of the Companies Act 2006. The Strategic report is set out on pages 1 to87.

As permitted by section 414C(11) of the Companies Act 2006, the below matters have

been disclosed in the Strategic report.

An indication of likely future development in the business of

the Company

pages 17 to 20

Particulars of important events affecting the Company since

the financial year end

page 211

Greenhouse gas emissions pages 47 to 49

Employee engagement and involvement page 40

Engagement with suppliers, customers and others in a

business relationship with the Company

pages 41 to 44

A summary of the principal risks facing the Company pages 75 to 86

The Corporate governance statement, as required by the Disclosure and Transparency

Rules (DTR) 7.2.1, is set out on pages 93 to 99 of the Directors’ report.

For the purposes of DTR 4.1.8R the Strategic report and the Directors’ report together

form the management report.

For the purposes of Listing Rule 9.8.4R, the information required to be disclosed can be

found on the following pages:

Listing Rule Topic Location

4 Details of long-term

incentiveschemes

Remuneration report,

pages133 to 135

13 Dividend waiver Statutory information,

page146

Contracts with controlling shareholders

During the year, there were no contracts of significance (as defined in the FCA’s Listing

Rules) between any Group undertaking and a controlling shareholder and no contracts for

the provision of services to any Group undertaking by a controlling shareholder.

Group results

The results for the year are set out in the consolidated income statement on page 158 and

a discussion of the Group’s financial performance and progress is set out inthe Strategic

report on pages 34 to 36.

Directors

The Directors who held office at any time during the year were JeffNodland, Chris

Smith, Mark Strickland, SteveHannam, Elizabeth McMeikan, Alastair Murray, Regi Aalstad

and Igor Kuzniar. Steve Hannam and Igor Kuzniar stepped down from the Board on

16November2022 and 31May 2023 respectively.

The biographical details of all Directors serving at 30June2023 appear on pages 90

and91.

Dividends

The Group’s results and performance highlights for the year are set out on pages 1 to87.

The Board has agreed with its lender group that no dividends will be paid until it is in

compliance with its original net debt and interest cover banking covenants, per the

lender refinancing agreement of May 2021. Therefore, the Board is not recommending a

final dividend in 2023. As stated in the 2022 Annual Report, future dividends will be final

dividends paid annually in cash, not by the allotment and issue of B Shares.

As outlined in the RNS dated 29 September 2022, under the Company’s €175 million RCF

as amended, the Company is not permitted to redeem or repay any of its share capital.

This restriction remains in place until the original maturity date of the RCF in May 2026

and, as a result, no redemption of existing B Shares is permitted at the present time.

Once this restriction is lifted, B Shares will continue to be redeemable but limited to one

redemption date per annum, in November of each year.

Further details on B Shares can be found in the booklet entitled ‘Your Guide to B Shares’

on the Company’s website at www.mcbride.co.uk.

Apex Group Fiduciary Services Limited, in its capacity as Trustee of the McBride

Employee Benefit Trust, has waived its entitlement to dividends on ordinary shares in the

Company comprised in the trust fund where no beneficial interest in the shares has vested

in a beneficiary. This waiver will continue unless and until theCompany directs the Trustee

otherwise.

Directors’ interests in the Company’s shares

The interests of persons who were Directors of the Company (and of their Connected

Persons) at 30June2023 in the issued shares of the Company (orin related derivatives

or financial instruments) which have been notified to the Company in accordance with

the Market Abuse Regulation are set out in the Remuneration report on page 138. The

Remuneration report also sets out details of any changes in those interests between

30June 2023 and 18 September 2023.

Directors’ report

146 McBride plc Annual Report and Accounts 2023

Statutory information continued

Indemnification of Directors

The Directors have the benefit of an indemnity provision contained in the Articles of

Association of the Company. In addition, under deeds of indemnity, the Company has

granted indemnities in favour of each Director of the Company in respect of any liability

that he or she may incur to a third party in relation to the affairs of the Company or any

Group company. Consequently, qualifying third-party indemnity provisions for the

purposes of section 234 of the Companies Act 2006 were accordingly in force during the

course of the financial year and remain in force at the date of the approval of this report.

During the financial year ended 30 June 2023 and up to the date of this Directors’ report,

the Company has appropriate Directors’ and officers’ liability insurance cover in place in

respect of legal action against its Directors.

Directors’ interests in contracts

Other than service contracts, no Director had any interest in any material contract with

any Group company at any time during the year. There were no contracts of significance

(as defined in the FCA’s Listing Rules) during the year to which any Group undertaking

was a party and in which a Director of the Company is, or was, materially interested.

Share capital

As at 18 September 2023, the issued share capital ofthe Company was 174,015,287

ordinary shares (20.717 %oftotal year-end capital) of 10 pence each (excluding treasury

shares), 42,041 treasury shares (0.005 % of total year-end capital) and 665,888,258

BShares (79.278 % of total year-end capital). There were no purchases, sales or transfers

of treasury shares during the year. There were no allotments of ordinary shares during

the year. Details of the issued share capital, together with details of movement in the

issued share capital of the Company during the year, are shown in note 25 to the financial

statements. This is incorporated by reference and deemed to be part of this report. The

Company has one class of ordinary shares, which carries no right to fixed income. The

ordinary shares are listed on the Official List and traded on the London Stock Exchange.

Allissued shares are fully paid.

The Company was authorised at the 2022 AGM to allot shares, or grant rights over

shares, up to an aggregate nominal amount equal to £5,800,510 (58,005,100 ordinary

shares of 10 pence each excluding treasury shares representing approximately one-third

of its issued share capital. This authority, however, is due to expire at the 2023 AGM and

the Board will be seeking a new authority at the 2023 AGM. The proposed authority,

if granted, will provide the Directors with the flexibility to allot (and grant rights over)

new shares in the Company in any circumstances up to a maximum aggregate nominal

amount of £870,076. This amount represents 5% of the Company’s issued ordinary share

capital at 18September 2023 excluding treasury shares. The Company held 42,041 shares

in treasury as at that date, representing approximately 0.024% of the Company’s issued

ordinary share capital as at 18 September 2023.

The Investment Association’s guidelines on Directors’ allotment authority state that the

Association’s members will regard as routine any proposal at a general meeting to seek

ageneral authority to allot an amount up to two-thirds of the existing share capital,

provided that any amount in excess of one-third of the existing share capital is applied

to fully pre-emptive rights issues only. In previous years, it has been the Company’s

practice to seek the maximum allotment authority permitted by the Investment

Association’s guidelines. However, following engagement with certain of the Company’s

non-UK shareholders during the year, the Board has concluded that, for the time being,

itisinthebest interests of the Company to limit the authority to 5% of the Company’s

issued sharecapital.

The Company was authorised at the 2022 AGM to allot up to an aggregate nominal

amount of £870,076 (representing 8,700,760 ordinary shares of 10 pence each and

approximately 5% of the issued share capital) for cash without first offering them to

existing shareholders in proportion to their holding. A renewal of this authority will be

proposed at the 2023 AGM.

There are no restrictions on the transfer of ordinary shares or B Shares in the Company,

other than certain restrictions that may from time to time be imposed by law. The

Company is not aware of any agreements between shareholders that may result in

restrictions on the transfer of securities and/or voting rights.

Directors’ report

147 McBride plc Annual Report and Accounts 2023

Statutory information continued

Substantial shareholdings

The Company had been notified in accordance with Chapter 5 of the Financial Conduct

Authority’s Disclosure Guidance and Transparency Rules of the following interests

amounting to 3% or more of its issued share capital asatthe end of the financial year and

at 18 September 2023 (being the last practicable date prior to the date of thisreport).

Shareholder

As at 18 September 2023 As at 30 June 2023

Number

of shares %

Number

of shares %

Teleios Capital Partners 43,335,757 24.01 43,335,757 24.01

DUMAC, Inc. 30,716,748 16.80 30,716,748 16.80

Zama Capital 21 ,007,962 12.07 21 ,007,962 12.07

NN Investment Partners 9,085,000 4.97 9,085,000 4.97

Aberforth Partners LLP 9,072,968 5.21 9,072,968 5.21

Invesco Ltd. 8,952,597 4.89 8,952,597 4.89

Premier Miton Investors 8,3 47,899 4.76 8, 347,899 4.76

No changes have been disclosed in the period since 18 September 2023.

Accounting policies

Information on the Group’s financial risk management objectives, policies and activities

and on the exposure of the Group to relevant risks in respect of financial instruments is

set out in note 20 to the consolidated financial statements on pages 194 to 202.

Political donations

It is the Group’s policy not to make political donations or to incur political expenditure.

During the year, no political donations were made by the Group to any EU or non-EU

political party, political organisation or independent election candidate. During the year,

no EU or non-EU political expenditure was incurred. In keeping with the Group’s approach

in prior years, shareholder approval is being sought at the forthcoming AGM, as a

precautionary measure, for the Company and its subsidiaries to make donations and/or

incur expenditure, which may be construed as political by the wide definition of that term

included in the relevant legislation. Further details are provided in the Notice ofAGM.

Research and development

The Group is involved in a range of activities in the field of R&D. Anumber of these

activities are referred to in the Strategic report on pages49 to 53.

Employment of disabled people

Our people policies are designed to provide equal opportunities and create an inclusive

culture in line with our values and in support of our long-term success. They also reflect

relevant local employment law in our countries of operation.

We expect our colleagues to treat each other with dignity and respect, and do not

tolerate discrimination, bullying, harassment or victimisation on any grounds. We are

committed to recruiting, training and paying our people fairly and equitably relative to

their role, skills, experience and performance – in a way that balances the needs of all

ourbusiness.

It is our policy to give full and fair consideration to applications for employment received

from people with disabilities, having regard to their particular aptitudes and abilities.

Wherever possible we will continue the employment of, and arrange appropriate training

for, colleagues who have become disabled during the period of their employment. We

provide the same opportunities for training, career development and promotion for

colleagues with disabilities as for other colleagues.

Creating an inclusive and supportive culture is not only the right thing to do, but also

bestfor our business. Itcreates a sense of belonging and value and enables colleagues

toperform at their best.

Colleague engagement

We recognise the importance of keeping all colleagues at all levels across the business

upto date on the strategy, performance and progress of the divisions and Group through

multi communication channels. Thiscombines leader-led communication at a site,

divisional and Group level supported by emails, intranet, the Group’s employee self-service

portal, announcements and bulletins.

Colleague engagement at all levels is a crucial element of embedding our core and

aspirational values, allowing us to help colleagues see how their efforts contribute to

theirsite, division or function’s strategic objectives.

We also engage with our colleagues collectively through a strong and effective

partnership with our European Works Council, which represents all colleagues within the

European Union, which meet biannually in addition to other local works council forums.

Eligible employees participate in performance-related bonus schemes and some senior

managers participate in an LTIP or RSU scheme.

Directors’ report

148 McBride plc Annual Report and Accounts 2023

Numerical diversity data as at 30 June 2023

The following tables set out the information required by Listing Rule 9.8.6R(10) in the

prescribed format. At year end, the Board and members of the Executive Committee are

asked to complete a diversity disclosure to confirm which of the categories set out in the

below tables they identify with.

1.(a) Table for reporting on gender identity or sex

Number

of Board

members

Percentage

ofthe Board

Number

of senior

positions on

the Board

(CEO, CFO,

SID and

Chair)

Number in

executive

management

Percentage

of executive

management

Men 4 67% 3 5 62.5%

Women 2 33% 1 3 37.5%

Not specified/prefer not to say 0 0% 0 0 0%

2.(b) Table for reporting on ethnic background

Number

of Board

members

Percentage

ofthe Board

Number

of senior

positions on

the Board

(CEO, CFO,

SID and

Chair)

Number in

executive

management

Percentage

of executive

management

White British or other White

(including minority-white groups)

6 100% 4 7 87.5%

Mixed/Multiple ethnic groups 0 0% 0 1 12.5%

Asian/Asian British 0 0% 0 0 0%

Black/African/Caribbean/Black British 0 0% 0 0 0%

Other ethnic group (including Arab) 0 0% 0 0 0%

Not specified/prefer not to say 0 0% 0 0 0%

Change of control

As at 30 June 2023 and at 18 September 2023, the last practicable date prior to approval

of this report, the Company and its subsidiaries were party to a number of commercial

contracts, contract manufacturing and brand licensing agreements that may allow the

counterparties to alter or terminate the agreements on achange of control of the

Company following a takeover bid. The Group has a syndicated multi-currency RCF for

€175million which may require prepayment if there is a change of control of the Company.

The rules of the discretionary share schemes set out the consequences of a change of

control of the Company on participants’ rights under the schemes. Generally, the rights

will vest and become exercisable on a change of control subject to the satisfaction of

relevant performance conditions. There are no arrangements between the Company and

its Directors or employees providing for compensation for loss of office or employment

that occurs specifically because of a takeover, merger or amalgamation. For further

information on the change of control provisions in the Company’s share plans and service

agreements, please refer to the Directors’ Remuneration Policy, which is set out in full in

the Directors’ Remunerationreport.

Branches

The Company has no overseas branches. TheCompany’s subsidiaries are detailed in

note15 to the financial statements.

2023 Annual General Meeting

The Company’s 2023 AGM will be held at the registered office of McBride plc, Middleton

Way, Middleton, Manchester M24 4DP on Monday 20 November 2023 at 2.00pm. Details

of the resolutions to be proposed, how to vote and ask questions are set out in a separate

Notice of AGM which accompanies this report for shareholders receiving hard copy

documents, and which is available on our website at www.mcbride.co.uk for those who

have elected to receive documents electronically. The results will be announced as soon

aspossible and posted on ourwebsite.

Disclosure of information to the auditors

Each of the Directors who held office at the date of approval of this Directors’ report

confirms that, so far as each Director is aware, there is no relevant audit information of

which the Company’s auditors are unaware and each Director has taken all the steps that

ought to have been taken in his or her duty as a Director to make himself or herself aware

of any relevant audit information and to establish that the Company’s auditorsare aware

of that information.

The Directors’ report was approved by the Board on 18September 2023 and signed on its

behalf by:

Glenda MacGeekie

Chief Legal Officer and Company Secretary

Statutory information continued

Directors’ report

149 McBride plc Annual Report and Accounts 2023

Statement of Directors’ responsibilities

inrespect of the financial statements

Company law requires the Directors to prepare financial statements for each financial year.

Under that law the Directors have prepared the Group financial statements in accordance

with UK-adopted international accounting standards and the Company financial

statements in accordance with United Kingdom Generally Accepted Accounting Practice

(United Kingdom Accounting Standards, comprising FRS 101 ‘Reduced Disclosure

Framework’, and applicable law).

Under company law, the Directors must not approve the financial statements unless they

are satisfied that they give a true and fair view of the state of affairs of the Group and

Company and of the profit or loss of the Group for that period. In preparing the financial

statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• state whether applicable UK-adopted international accounting standards have

been followed for the Group financial statements and United Kingdom Accounting

Standards, comprising FRS 101, have been followed for the Company financial

statements, subject to any material departures disclosed and explained in the Group

and Company financial statements;

• make judgements and accounting estimates that are reasonable and prudent; and

• prepare the financial statements on the going concern basis unless it is inappropriate

to presume that the Group and Company will continue inbusiness.

The Directors are responsible for safeguarding the assets of the Group and Company and

hence for taking reasonable steps for the prevention and detection of fraud and other

irregularities.

The Directors are also responsible for keeping adequate accounting records that are

sufficient to show and explain the Group’s and Company’s transactions and disclose with

reasonable accuracy at any time the financial position of the Group and Company and

enable them to ensure that the financial statements and the Directors’ Remuneration

report comply with the Companies Act 2006.

The Directors are responsible for the maintenance and integrity of the Company’s website.

Legislation inthe United Kingdom governing the preparation and dissemination of

financial statements may differ from legislation in other jurisdictions.

Directors’ confirmations

The Directors consider that the Annual Report and Accounts 2023, taken as a whole,

isfair, balanced and understandable and provides the information necessary for

shareholders to assess the Group’s and Company’s position and performance, business

model and strategy.

Each of the Directors, whose names and functions are listed in the Board of Directors,

confirms that, to the best of their knowledge:

• the Group financial statements, which have been prepared in accordance with

UK-adopted international accounting standards, give a true and fair view of the assets,

liabilities, financial position and loss of the Group;

• the Company financial statements, which have been prepared in accordance with

United Kingdom Accounting Standards, comprising FRS 101, give a true and fair view

ofthe assets, liabilities and financial position of the Company; and

• the Strategic report and Directors’ report include a fair review of the development and

performance of the business and the position of the Group, together with a description

of the principal risks anduncertainties that it faces.

In the case of each Director in office at the date the Directors’ report is approved:

• so far as the Director is aware, there is no relevant audit information of which the

Group’s and Company’s auditors are unaware; and

• they have taken all the steps that they ought to havetaken as a Director in order to

make themselves aware of any relevant audit information and to establish that the

Group’s and Company’s auditors areaware of that information.

The Directors are responsible for preparing the Annual Reportand Accounts 2023

in accordancewith applicable law andregulation.

Directors’ report

150 McBride plc Annual Report and Accounts 2023

Independent auditors’ report to the members of McBride plc

Report on the audit of the financial statements

Opinion

In our opinion:

• McBride plc’s Group financial statements and Company financial statements (the

“financial statements”) give a true and fair view of the state of the Group’s and of the

Company’s affairs as at 30 June 2023 and of the Group’s loss and the Group’s cash

flows for the year then ended;

• the Group financial statements have been properly prepared in accordance with

UK-adopted international accounting standards as applied in accordance with the

provisions of the Companies Act 2006;

• the Company financial statements have been properly prepared in accordance

with United Kingdom Generally Accepted Accounting Practice (United Kingdom

Accounting Standards, including FRS 101 “Reduced Disclosure Framework”, and

applicable law); and

• the financial statements have been prepared in accordance with the requirements

ofthe Companies Act 2006.

We have audited the financial statements, included within the Annual Report and

Accounts 2023 (the “Annual Report”), which comprise: the Consolidated and

Company balance sheets as at 30 June 2023; the Consolidated income statement,

the Consolidated statement of comprehensive income, the Consolidated cash flow

statement and the Consolidated and Company statements of changes in equity for the

year then ended; and the notes to the financial statements, which include a description

of the significant accounting policies.

Our opinion is consistent with our reporting to the Audit and Risk Committee.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK)

(“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are further

described in the Auditors’ responsibilities for the audit of the financial statements

section of our report. We believe that the audit evidence we have obtained is sufficient

and appropriate to provide a basis for our opinion.

Independence

We remained independent of the Group in accordance with the ethical requirements that

are relevant to our audit of the financial statements in the UK, which includes the FRC’s

Ethical Standard, as applicable to listed public interest entities, and we have fulfilled our

other ethical responsibilities in accordance with these requirements.

To the best of our knowledge and belief, we declare that non-audit services prohibited

by the FRC’s Ethical Standard were not provided.

Other than those disclosed in note 6, we have provided no non-audit services to the

Company or its controlled undertakings in the period under audit.

Our audit approach

Overview

Audit scope

Our work incorporated full scope audits of the Group’s components in the UK, France,

Belgium and Germany plus limited scope procedures in relation to Luxembourg, Italy,

Denmark and Poland.

The entities where we conducted audit work, together with audit work performed at the

Group’s shared service centre and at the consolidated level, accounted for approximately

84% of the Group’s revenue.

Key audit matters

• Valuation of goodwill (Group)

• Valuation of investments in subsidiaries and recoverability of amounts owed by

subsidiaries (Company)

Materiality

• Overall Group materiality: £4.4 million (2022: £1.7m) based on 0.5% of revenue.

• Overall Company materiality: £3.0 million (2022: £1.5m) based on 1% of total assets.

• Performance materiality: £3.3 million (2022: £1.3m) (Group) and £2.3 million

(2022:£1.2m) (Company).

The scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of

material misstatement in the financial statements.

Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were

of most significance in the audit of the financial statements of the current period and

include the most significant assessed risks of material misstatement (whether or not due

to fraud) identified by the auditors, including those which had the greatest effect on: the

overall audit strategy; the allocation of resources in the audit; and directing the efforts

of the engagement team. These matters, and any comments we make on the results

of our procedures thereon, were addressed in the context of our audit of the financial

statements as a whole, and in forming our opinion thereon, and we do not provide a

separate opinion on these matters.

This is not a complete list of all risks identified by our audit.

Going concern, which was a key audit matter last year, is no longer included because,

although it is a significant audit risk, there is no material uncertainty in relation to

going concern as there was in the prior year, the work performed over going concern is

detailed within the ‘Conclusions relating to going concern’ section of this audit report.

Otherwise, the key audit matters below are consistent with last year.

Financial statements

151 McBride plc Annual Report and Accounts 2023

Independent auditors’ report to the members of McBride plc continued

Report on the audit of the financial statements

Key audit matter How our audit addressed the key audit matter

Valuation of goodwill (Group)

Refer to note 12 in the Group financial statements. We evaluated and assessed the Group’s future cash flow forecasts, the process by which

they were drawn up and tested the underlying value in use calculations.

Goodwill of £19.7 million (2022: £19.7m) is split across four cash-generating units

(CGUs) that are considered annually for impairment. Of the £19.7 million, £16.0 million

(2022:£16.0m) relates to one CGU, Liquids, of which the significant risk of impairment

is in relation to the forecast margin assumptions. The Directors have sensitised

the value-in-use model to assess the financial impact of key assumptions that the

Directors believe have a reasonable likelihood of occurrence and have concluded that

areasonably possible change would not lead to an impairment.

We compared the Group’s forecasts to the latest Board approved budget and found

them to be consistent.

For CGUs with Goodwill that are not material to the financial statements, impairment

indicators have been assessed and no triggers have been identified.

We discussed the cash flow forecasts with management and compared these to external

market data for the Liquids CGU in order to identify any inconsistencies.

We compared actual results with previous forecasts to assess historical accuracy of the

forecasts.

We assessed management’s assumptions for margins by comparing to historical data

and supporting evidence.

We utilised specialists to assess management’s key assumptions for long-term growth

rates by comparing with external forecasts and discount rates used by assessing the cost

of capital calculations for the Group and comparing against comparable organisations.

We challenged management to the extent of which climate change has been reflected

within management’s impairment assessment process.

We reviewed the disclosures made regarding the assumptions and sensitivities applied

by management and we are satisfied that these are appropriate.

As a result of these procedures, we were satisfied with the Directors’ conclusion that no

impairment was required for the current period.

Key audit matters continued

Financial statements

152 McBride plc Annual Report and Accounts 2023

Independent auditors’ report to the members of McBride plc continued

Report on the audit of the financial statements

Key audit matter How our audit addressed the key audit matter

Valuation of investments in subsidiaries and recoverability of amounts owed

bysubsidiaries (Company)

Refer to notes 5 and 6 in the Company financial statements. We evaluated and assessed the Company’s investments in subsidiaries with reference to

the Group’s future cash flow forecasts, and checked the allocation of this by legal entity.

The Company financial statements have investment in subsidiaries of £158.4 million

(2022: £158.4m) and amounts owed by subsidiary undertakings of £130.4 million

(2022: £154.4m). An impairment indicator exists as the value of the investment

exceeds the market capitalisation of the Group and the amounts owed by subsidiary

undertakings exceeds the net assets for the Group.

We compared the Group’s forecasts to the latest Board approved budget and found

them to be consistent.

We discussed the cash flow forecasts with management and compared these to external

market research in order to identify any inconsistencies.

We compared the current period’s actual results with previous forecasts to assess

historical accuracy of the forecasts.

We assessed management’s assumptions for margins by comparing to historical data

and supporting evidence.

We utilised specialists to assess management’s key assumptions for long-term growth

rates by comparing with external forecasts and discount rates used by assessingthe cost

of capital calculations for the Group and comparing against comparableorganisations.

We obtained management’s intercompany recoverability model and assessed whether

the methods applied were consistent with IFRS 9. We checked the calculations within

the model and agreed the figures included to the relevant financial information included

in the Group consolidation schedules.

We also reviewed the disclosures made regarding the assumptions and are satisfied that

these are appropriate.

As a result of these procedures, we were satisfied with the Directors’ conclusion that no

impairment was required for the current period and the amounts owed by subsidiary

undertakings are recoverable.

Key audit matters continued

Financial statements

153 McBride plc Annual Report and Accounts 2023

Independent auditors’ report to the members of McBride plc continued

Report on the audit of the financial statements

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be

able to give an opinion on the financial statements as a whole, taking into account the

structure of the Group and the Company, the accounting processes and controls, and the

industry in which they operate.

The Group is a manufacturer of private label household and personal care products.

Itoperates across 15 manufacturing facilities in Europe and Asia. The Group is structured

in five operating segments: Liquids, Powders, Unit dosing, Aerosols and Asia as well

as Corporate. In establishing the overall approach to the Group audit, we determined

the type of work that needed to be performed at the entities by us, as the Group

engagement team, or component auditors operating under our instruction. Where

work was performed by component auditors, we determined the level of involvement

we needed to have in this work to be able to conclude that sufficient appropriate audit

evidence had been obtained. Our work incorporated full scope audits of the Group’s

legal entities in the UK, France, Belgium and Germany plus limited scope procedures in

relation Luxembourg, Italy, Denmark and Poland. The entities where we conducted audit

work, together with audit work performed at the Group’s shared service centre and at a

consolidated level, accounted for approximately 84% of the Group’s revenue.

The impact of climate risk on our audit

As part of our audit we made enquiries of management to understand the process

management adopted to assess the extent of the potential impact of climate risk

on the Group’s financial statements and support the disclosures made within the

financialstatements.

We challenged the completeness of management’s climate risk assessment by:

• reading external reporting made by management;

• challenging the consistency of management’s climate impact assessment with internal

climate plans and board minutes; and

• reading the entity’s website/communications for details of climate related impacts.

Management has made commitments to a pathway to Net Zero, however no timeframe

has been committed to. This commitment does not directly impact financial reporting, as

management has not yet developed a detailed pathway on how exactly they will deliver

this commitment and will only be able to model the impact further into the journey to

Net Zero.

Management considers the impact of climate risk as at the balance sheet date does not

give rise to a potential material financial statement impact.

Materiality

The scope of our audit was influenced by our application of materiality. We set certain

quantitative thresholds for materiality. These, together with qualitative considerations,

helped us to determine the scope of our audit and the nature, timing and extent of our

audit procedures on the individual financial statement line items and disclosures and

in evaluating the effect of misstatements, both individually and in aggregate on the

financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial

statements as a whole as follows:

Financial statements

– Group

Financial statements

– Company

Overall materiality

£4.4 million

(2022:£1.7m)

£3.0 million

(2022:£1.5m)

How we determined it 0.5% of revenue 1% of total assets

Rationale for benchmark

applied

We considered

materiality in a number

of different ways, and

used our professional

judgement having

applied ‘rule of thumb’

percentages to a

number of potential

benchmarks. On

the basis of this,

we concluded that

0.5% of revenue is an

appropriate level of

materiality considering

the overall scale of the

business.

We believe that

calculating statutory

materiality based

on 1% of total assets

is a typical primary

measure for users of

the financial statements

of holding companies,

and is a generally

accepted auditing

benchmark.

For each component in the scope of our Group audit, we allocated a materiality that

is less than our overall Group materiality. The range of materiality allocated across

components was £1.4 million to £3.9 million. Certain components were audited to a local

statutory audit materiality that was also less than our overall Group materiality.

We use performance materiality to reduce to an appropriately low level the probability

that the aggregate of uncorrected and undetected misstatements exceeds overall

materiality. Specifically, we use performance materiality in determining the scope of our

audit and the nature and extent of our testing of account balances, classes of transactions

and disclosures, for example in determining sample sizes. Our performance materiality was

75% (2022: 75%) of overall materiality, amounting to £3.3m (2022: £1.3m) for the Group

financial statements and £2.3m (2022: £1.2m) for the Company financial statements.

Financial statements

154 McBride plc Annual Report and Accounts 2023

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Report on the audit of the financial statements

Materiality continued

In determining the performance materiality, we considered a number of factors – the

history of misstatements, risk assessment and aggregation risk and the effectiveness

of controls – and concluded that an amount at the upper end of our normal range

wasappropriate.

We agreed with the Audit and Risk Committee that we would report to them

misstatements identified during our audit above £0.2m (Group audit) (2022: £0.1m)

and£0.2m (Company audit) (2022: £0.1m) as well as misstatements below those

amounts that, in our view, warranted reporting for qualitative reasons.

Conclusions relating to going concern

Our evaluation of the directors’ assessment of the Group’s and the Company’s ability to

continue to adopt the going concern basis of accounting included:

• we obtained management’s assessment that supports the Board’s conclusions with

respect to the disclosures provided around going concern;

• we obtained management’s base case scenario, checked its mathematical accuracy and

discussed the assumptions that were applied in order to understand the rationale and

the appropriateness of those assumptions;

• we obtained management’s severe but plausible downside scenario, checked its

mathematical accuracy and discussed the assumptions that were applied in order to

understand the rationale and the appropriateness of those assumptions;

• we corroborated the key assumptions in the base case and severe but plausible

downside scenario to third party evidence and/or our knowledge of the business;

• we assessed the available liquidity under the different scenarios modelled by

management, and the associated covenant tests applied; and

• we checked the banking agreement for the terms of the financing facilities which

were put in place during the year and agreed these facilities to management’s cash

flow forecasts.

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 and the Company’s ability to continue as a going concern for a period of at

least twelve months from when the financial statements are authorised forissue.

In auditing the financial statements, we have concluded that the directors’ use of the going

concern basis of accounting in the preparation of the financial statements isappropriate.

However, because not all future events or conditions can be predicted, this conclusion

is not a guarantee as to the Group’s and the Company’s ability to continue as a

goingconcern.

In relation to the directors’ 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.

Reporting on other information

The other information comprises all of the information in the Annual Report other

than the financial statements and our auditors’ report thereon. The directors are

responsible for the other information, which includes reporting based on the Task Force

on Climate-related Financial Disclosures (TCFD) recommendations. Our opinion on the

financial statements does not cover the other information and, accordingly, we do not

express an audit opinion or, except to the extent otherwise explicitly stated in this report,

any form of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read

the other information and, in doing so, consider whether the other information is

materially inconsistent with the financial statements or our knowledge obtained in

the audit, or otherwise appears to be materially misstated. If we identify an apparent

material inconsistency or material misstatement, we are required to perform procedures

to conclude whether there is a material misstatement of the financial statements or a

material misstatement of the other information. If, based on the work we have performed,

we conclude that there is a material misstatement of this other information, we are

required to report that fact. We have nothing to report based on these responsibilities.

With respect to the Strategic report and Directors report, we also considered whether

the disclosures required by the UK Companies Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006

requires us also to report certain opinions and matters as described below.

Strategic report and Directors report

In our opinion, based on the work undertaken in the course of the audit, the information

given in the Strategic report and Directors report for the year ended 30 June 2023 is

consistent with the financial statements and has been prepared in accordance with

applicable legal requirements.

In light of the knowledge and understanding of the Group and Company and their

environment obtained in the course of the audit, we did not identify any material

misstatements in the Strategic report and Directors report.

Directors’ Remuneration

In our opinion, the part of the Remuneration Committee Report to be audited has been

properly prepared in accordance with the Companies Act 2006.

Financial statements

155 McBride plc Annual Report and Accounts 2023

Independent auditors’ report to the members of McBride plc continued

Report on the audit of the financial statements

Corporate governance statement

The Listing Rules require us to review the directors’ statements in relation to going

concern, longer-term viability and that part of the corporate governance statement

relating to the Company’s compliance with the provisions of the UK Corporate

Governance Code specified for our review. Our additional responsibilities with respect to

the corporate governance statement as other information are described in the Reporting

on other information section of this report.

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, and we have

nothing material to add or draw attention to in relation to:

• The directors’ confirmation that they have carried out a robust assessment of the

emerging and principal risks;

• The disclosures in the Annual Report that describe those principal risks, what

procedures are in place to identify emerging risks and an explanation of how these

are being managed or mitigated;

• The directors’ statement in the financial statements about whether they considered it

appropriate to adopt the going concern basis of accounting in preparing them, and

their identification of any material uncertainties to the Group’s and Company’s ability

to continue to do so over a period of at least twelve months from the date of approval

of the financial statements;

• The directors’ explanation as to their assessment of the Group’s and Company’s

prospects, the period this assessment covers and why the period is appropriate; and

• The directors’ statement as to whether they have a reasonable expectation that the

Company will be able to continue in operation and meet its liabilities as they fall due

over the period of its assessment, including any related disclosures drawing attention

to any necessary qualifications or assumptions.

Our review of the directors’ statement regarding the longer-term viability of the Group

and Company was substantially less in scope than an audit and only consisted of making

inquiries and considering the directors’ process supporting their statement; checking

that the statement is in alignment with the relevant provisions of the UK Corporate

Governance Code; and considering whether the statement is consistent with the financial

statements and our knowledge and understanding of the Group and Company and their

environment obtained in the course of the audit.

In addition, based on the work undertaken as part of our audit, we have concluded that

each of the following elements of the corporate governance statement is materially

consistent with the financial statements and our knowledge obtained during the audit:

• The directors’ statement that they consider the Annual Report, taken as a whole, is

fair, balanced and understandable, and provides the information necessary for the

members to assess the Group’s and Company’s position, performance, business model

andstrategy;

• The section of the Annual Report that describes the review of effectiveness of risk

management and internal control systems; and

• The section of the Annual Report describing the work of the Audit and Risk Committee.

We have nothing to report in respect of our responsibility to report when the directors’

statement relating to the Company’s compliance with the Code does not properly

disclose a departure from a relevant provision of the Code specified under the Listing

Rules for review by the auditors.

Responsibilities for the financial statements and the audit

Responsibilities of the directors for the financial statements

As explained more fully in the Statement of Directors’ responsibilities in respect of the

financial statements, the directors are responsible for the preparation of the financial

statements in accordance with the applicable framework and for being satisfied that

they give a true and fair view. The directors are also responsible for such internal control

as they determine is necessary to enable the preparation of financial statements that are

free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the

Group’s and the Company’s ability to continue as a going concern, disclosing, as

applicable, matters related to going concern and using the going concern basis of

accounting unless the directors either intend to liquidate the Group or the Company or

to cease operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial

statements as a whole are free from material misstatement, whether due to fraud or

error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is

a high level of assurance, but is not a guarantee that an audit conducted in accordance

with ISAs (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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations.

We design procedures in line with our responsibilities, outlined above, to detect material

misstatements in respect of irregularities, including fraud. The extent to which our

procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the Group and industry, we identified that the principal

risks of non-compliance with laws and regulations related to health and safety

regulations, environmental laws and employment laws, and we considered the extent

to which non-compliance might have a material effect on the financial statements.

Wealso considered those laws and regulations that have a direct impact on the financial

statements such as the listing rules, local and international tax laws and the Companies

Act 2006. We evaluated management’s incentives and opportunities for fraudulent

manipulation of the financial statements (including the risk of override of controls),

and determined that the principal risks were related to posting inappropriate journal

entries to improve financial performance, and management bias in accounting estimates

and judgements. The Group engagement team shared this risk assessment with the

component auditors so that they could include appropriate audit procedures in response

to such risks in their work.

Financial statements

156 McBride plc Annual Report and Accounts 2023

Independent auditors’ report to the members of McBride plc continued

Report on the audit of the financial statements

Responsibilities for the financial statements and the audit continued

Auditors’ responsibilities for the audit of the financial statements continued

Audit procedures performed by the Group engagement team and/or component

auditors included:

• challenging assumptions and judgements made by management in their significant

accounting estimates (because of the risk of management bias), in particular around

the carrying value of goodwill (see related key audit matter above) and recoverability

of deferred tax assets;

• discussions with the Audit Committee, management, internal audit and the

in-house legal team including consideration of known or suspected instances of

non-compliance with laws and regulation or fraud;

• enquired with external legal counsel around actual and potential litigation and claims;

• reviewing minutes of meetings of those charged with governance;

• auditing the tax computations to check compliance with tax legislation;

• identifying and testing journal entries, in particular any journal entries posted with

unusual account combinations; and

• reviewing financial statements disclosures and testing to supporting documentation,

where appropriate, to assess compliance with applicable laws and regulations.

There are inherent limitations in the audit procedures described above. We are less likely

to become aware of instances of non-compliance with laws and regulations that are not

closely related to events and transactions reflected in the financial statements. Also, the

risk of not detecting a material misstatement due to fraud is higher than the risk of not

detecting one resulting from error, as fraud may involve deliberate concealment by, for

example, forgery or intentional misrepresentations, or through collusion.

Our audit testing might include testing complete populations of certain transactions and

balances, possibly using data auditing techniques. However, it typically involves selecting

a limited number of items for testing, rather than testing complete populations. We will

often seek to target particular items for testing based on their size or risk characteristics.

In other cases, we will use audit sampling to enable us to draw a conclusion about the

population from which the sample is selected.

A further description of our responsibilities for the audit of the financial statements

is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities.

Thisdescription forms part of our auditors’ report.

Use of this report

This report, including the opinions, has been prepared for and only for the Company’s

members as a body in accordance with Chapter 3 of Part 16 of the Companies Act

2006 and for no other purpose. We do not, in giving these opinions, accept or assume

responsibility for any other purpose or to any other person to whom this report is shown

or into whose hands it may come save where expressly agreed by our prior consent

inwriting.

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:

• we have not obtained all the information and explanations we require for our audit; or

• adequate accounting records have not been kept by the Company, or returns

adequate for our audit have not been received from branches not visited by us; or

• certain disclosures of directors’ remuneration specified by law are not made; or

• the Company financial statements and the part of the Remuneration Committee

Report to be audited are not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Appointment

Following the recommendation of the Audit and Risk Committee, we were appointed

by the directors on 14 November 2011 to audit the financial statements for the year

ended 30 June 2012 and subsequent financial periods. The period of total uninterrupted

engagement is 12 years, covering the years ended 30 June 2012 to 30 June 2023.

Other matter

In due course, as required by the Financial Conduct Authority Disclosure Guidance and

Transparency Rule 4.1.14R, these financial statements will form part of the ESEF-prepared

annual financial report filed on the National Storage Mechanism of the Financial Conduct

Authority in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This

auditors’ report provides no assurance over whether the annual financial report will be

prepared using the single electronic format specified in the ESEF RTS.

Hazel Macnamara (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

Manchester

18 September 2023

Financial statements

157 McBride plc Annual Report and Accounts 2023

Consolidated income statement

Year ended 30 June 2023

2023 2022

Continuing operations Note

Adjusted

(note 2)

£m

Adjusting

items

(note 2)

£m

Total

£m

Adjusted

(note 2)

£m

Adjusting

items

(note 2)

£m

Total

£m

Revenue 3 8 89.0 — 88 9.0 678 .3 — 678 . 3

Cost of sales (62 5 .4) — (6 2 5 . 4) (4 8 7. 5) — (4 8 7. 5)

Gross profit 263.6 — 263 .6 19 0. 8 — 1 90. 8

Distribution costs (7 7. 9) — (7 7. 9) (6 4 . 3) — (6 4 . 3)

Administrative costs (1 6 8 . 4) (3. 2) (17 1 .6) (148.8) (5 .0) (1 53 . 8)

Impairment of trade receivables (3. 5) — (3 . 5) (2 . 0) — (2 . 0)

(Loss)/gain on disposal of property, plant and equipment (0. 3) — (0. 3) (0 . 3) 3 .7 3 .4

Reversal of impairment/(impairment) of property, plant and equipment — — — 0 .1 (0 . 9) (0 . 8)

Operating profit/(loss) 7 13.5 (3 . 2) 10. 3 (24 . 5) (2 . 2) (26 .7)

Finance costs 8 (13 . 2) (1 2. 2) (2 5 .4) (5 .1) (3.5) (8 .6)

Profit/(loss) before taxation 0. 3 (1 5 . 4) (15 .1) (29 .6) (5 .7) (35 .3)

Taxation 9 (0. 3) 3.9 3.6 9.3 2 .0 11. 3

Loss for the year from continuing operations — (11. 5) (11. 5) (20. 3) (3.7) (2 4 . 0)

Discontinued operations

Loss for the year from discontinued operations 4 — — — — (0 . 3) (0 . 3)

Loss for the year — (11. 5) (11. 5) (20. 3) (4 . 0) (24. 3)

2023 2022

Loss per ordinary share from continuing and discontinued operations

attributable to the owners of the parent during the year (note 10)

Basic loss per share

From continuing operations (6 . 6)p (13 . 8)p

From discontinued operations 0.0p (0 . 2)p

From loss for the year (6 . 6)p (1 4 . 0)p

Diluted loss per share

From continuing operations (6 . 6)p (13 . 8)p

From discontinued operations 0.0p (0 . 2)p

From loss for the year (6 . 6)p (1 4 . 0)p

Financial statements

158 McBride plc Annual Report and Accounts 2023

Note

2023

£m

2022

£m

Loss for the year (11 . 5) (24 . 3)

Other comprehensive income/(expense)

Items that may be reclassified to profit or loss:

Currency translation differences on foreign subsidiaries (0.6) 0. 2

Gain on net investment hedges 0.4 0. 5

Gain on cash flow hedges in the year 3.7 2.4

Cash flow hedges transferred to profit or loss (1 . 4) —

Taxation relating to items above 9 (0. 4) (0 . 5)

1.7 2.6

Items that will not be reclassified to profit or loss:

Net actuarial (loss)/gain on post-employment benefits 22 (14 .1) 12.4

Taxation relating to item above 9 3. 5 (3 .1)

(1 0.6) 9.3

Total other comprehensive (expense)/income (8 . 9) 11.9

Total comprehensive expense (2 0 . 4) (12.4)

Total comprehensive expense attributable to equity shareholders arises from:

Continuing operations (2 0 . 4) (12 .1)

Discontinued operations — (0 . 3)

(2 0 . 4) (12.4)

Consolidated statement of comprehensive income

Year ended 30 June 2023

Financial statements

159 McBride plc Annual Report and Accounts 2023

Note

2023

£m

2022

£m

Non-current assets

Goodwill 12 19.7 1 9 .7

Other intangible assets 13 6. 5 7. 3

Property, plant and equipment 14 1 1 7. 8 12 2.9

Derivative financial instruments 20 4. 5 1.9

Right-of-use assets 15 8.5 11 .3

Deferred tax assets 9 41 . 6 29 .7

198 .6 1 92. 8

Current assets

Inventories 16 121. 5 118.9

Trade and other receivables 17 145 .7 145.4

Current tax assets 2.3 3.9

Derivative financial instruments 20 0. 6 0.6

Cash and cash equivalents 1.6 4. 5

27 1 .7 273 . 3

Total assets 470 . 3 46 6 .1

Current liabilities

Trade and other payables 18 219.6 206. 9

Borrowings 19 49. 3 60. 5

Lease liabilities 15, 19 3.5 3.9

Derivative financial instruments 20 1.8 —

Current tax liabilities 6.7 5.3

Provisions 24 2 .7 3.4

283.6 280.0

Consolidated balance sheet

At 30 June 2023

Note

2023

£m

2022

£m

Non-current liabilities

Borrowings 19 109. 8 9 6.4

Lease liabilities 15, 19 5.5 8 .1

Pensions and other post-employment

benefits 22 26.6 1 6 .1

Provisions 24 2 .6 3.8

Deferred tax liabilities 9 5.1 4.7

149.6 12 9.1

Total liabilities 433. 2 4 0 9.1

Net assets 3 7. 1 5 7. 0

Equity

Issued share capital 25 1 7. 4 1 7. 4

Share premium account 25 68.6 6 8.6

Other reserves 25 78 .9 7 7. 2

Accumulated losses (1 2 7. 8) (1 0 6 . 2)

Total equity 3 7. 1 5 7. 0

The financial statements on pages 158 to 211 were approved by the Board of Directors on

18 September 2023 and were signed on its behalf by:

Chris Smith

Director

Financial statements

160 McBride plc Annual Report and Accounts 2023

Note

2023

£m

2022

(restated)

(1)

£m

Investing activities

Proceeds from sale of property, plant and equipment — 6.1

Purchase of property, plant and equipment 14 (1 0. 3) (12.6)

Purchase of intangible assets 13 (1. 7) (1 .7)

Settlement of derivatives used in net

investment hedges 0.4 0.4

Net cash used in investing activities (1 1. 6) (7. 8)

Financing activities

Redemption of B Shares 11 — (0 . 1)

(Repayment)/drawdown of overdrafts (6 . 2) 0.7

(Repayment)/drawdown of other loans (4 . 9) 6 .0

Drawdown of bank loans 13.7 18 .0

Repayment of IFRS 16 lease obligations 15 (4 . 3) (5 . 0)

Purchase of own shares — (0 .1)

Net cash (used in)/generated from financing activities (1. 7) 19. 5

Decrease in net cash and cash equivalents (2. 2) (20 . 3)

Net cash and cash equivalents at the start of

the year 4.5 24 . 9

Currency translation differences (0. 7) (0 .1)

Net cash and cash equivalents at the end of the year 1 .6 4. 5

(1) Refinancing costs paid have been reclassified as operating activities, having been reported previously

as under financing activities.

Consolidated cash flow statement

Year ended 30 June 2023

Note

2023

£m

2022

(restated)

(1)

£m

Operating activities

Loss before tax

Continuing operations (1 5 .1) (35. 3)

Discontinued operations — (0 . 4)

Finance costs 8 25 .4 8.6

Exceptional items excluding finance costs 4 0.8 —

Share-based payments charge 5 0. 5 —

Depreciation of property, plant and

equipment 14 16. 8 16.9

Depreciation of right-of-use assets 15 3.8 4.0

Loss on disposal of property, plant and

equipment 0. 3 0. 3

Amortisation of intangible assets 13 2 .4 2.6

Reversal of impairment of property, plant

and equipment 14 — (0 .1)

Operating cash flow before changes in

working capital before exceptional items 34.9 (3 . 4)

Increase in receivables (1. 3) (27. 4)

Increase in inventories (2 .7) (25 .7)

Increase in payables 11 .1 3 7. 8

Operating cash flow after changes in

working capital before exceptional items 42 .0 (1 8 .7)

Additional cash funding of pension schemes 22 (4 . 0) (4 . 0)

Cash generated from/(used in) operations

before exceptional items 38 .0 (2 2 .7)

Cash outflow in respect of exceptional items (1 . 4) (4 . 1)

Cash generated from/(used in) operations 36.6 (26 . 8)

Interest paid (1 1 . 4) (3.3)

Refinancing costs paid (1 2.3) (1 . 8)

Taxation paid (1. 8) (0 .1)

Net cash generated from/(used in)

operating activities 1 1 .1 (3 2 .0)

Financial statements

161 McBride plc Annual Report and Accounts 2023

Consolidated statement of changes in equity

Year ended 30 June 2023

Note

Issued

capital

£m

premium

account

£m

Other reserves

Accumulated

losses

£m

Total

equity

£m

Cash flow

hedge

reserve

£m

Currency

translation

reserve

£m

Capital

redemption

reserve

£m

At 1 July 2021 1 7. 4 68 .6 (0. 1) (1 . 0) 7 7. 1 (9 2. 2) 69. 8

Year ended 30 June 2022

Loss for the year — — — — — (24 . 3) (24 . 3)

Other comprehensive income/(expense)

Items that may be reclassified to profit or loss:

Currency translation differences of foreign subsidiaries — — — 0. 2 — — 0. 2

Gain on net investment hedges 20 — — — 0. 5 — — 0.5

Gain on cash flow hedges in the year 20 — — 2.4 — — — 2.4

Taxation relating to the items above — — (0 . 5) — — — (0 . 5)

— — 1.9 0.7 — — 2.6

Items that will not be reclassified to profit or loss:

Net actuarial gain on post-employment benefits 22 — — — — — 12.4 12 .4

Taxation relating to items above 9 — — — — — (3 .1) (3 .1)

— — — — — 9. 3 9.3

Total other comprehensive income — — 1 .9 0.7 — 9.3 11.9

Total comprehensive income/(expense) — — 1.9 0.7 — (1 5 . 0) (12.4)

Transactions with owners of the parent

Redemption of B Shares 11 — — — — 0.1 (0. 1) —

Purchase of own shares 25 — — — — — (0 . 1) (0 .1)

Transfers between reserves — — — (1 .5) — 1.5 —

Taxation relating to the items above 9 — — — — — (0 . 3) (0 . 3)

At 30 June 2022 1 7. 4 68 .6 1.8 (1 . 8) 7 7. 2 (1 0 6. 2) 5 7. 0

Financial statements

162 McBride plc Annual Report and Accounts 2023

Note

Issued

capital

£m

premium

account

£m

Other reserves

Accumulated

losses

£m

Total

equity

£m

Cash flow

hedge

reserve

£m

Currency

translation

reserve

£m

Capital

redemption

reserve

£m

At 1 July 2022 1 7. 4 68.6 1.8 (1 . 8) 7 7. 2 (106. 2) 5 7. 0

Loss for the year — — — — — (11 .5) (11. 5)

Other comprehensive income/(expense)

Items that may be reclassified

to profit or loss:

Currency translation differences

of foreign subsidiaries — — — (0.6) — — (0.6)

Gain on net investment hedges 20 — — — 0.4 — — 0.4

Gain on cash flow hedges in the year 20 — — 3.7 — — — 3.7

Cash flow hedges transferred to profit or loss — — (1 . 4) — — — (1 . 4)

Taxation relating to the items above — — (0 . 4) — — — (0 . 4)

— — 1 .9 (0 . 2) — — 1 .7

Items that will not be reclassified to profit or loss:

Net actuarial loss on post-employment benefits 22 — — — — — (14 .1) (1 4.1)

Taxation relating to items above 9 — — — — — 3.5 3. 5

— — — — — (10. 6) (1 0.6)

Total other comprehensive income/(expense) — — 1.9 (0. 2) — (1 0.6) (8 . 9)

Total comprehensive income/(expense) — — 1 .9 (0 . 2) — (2 2 .1) (2 0. 4)

Transactions with owners of the parent

Share-based payments — — — — — 0. 5 0. 5

At 30 June 2023 1 7. 4 68.6 3 .7 (2 .0) 7 7. 2 (1 2 7. 8) 3 7. 1

At 30 June 2023, the accumulated losses include a deduction of £0.4million (2022: £0.5m) for the cost of own shares held in relation to employee share schemes. Further

information on own shares is presented in note 25.

Consolidated statement of changes in equity continued

Year ended 30 June 2023

Financial statements

163 McBride plc Annual Report and Accounts 2023

The Group’s base case forecasts are based on the Board-approved budget and three-year

plan. They indicate sufficient liquidity, debt cover and interest cover throughout the going

concern review period to ensure compliance with current banking covenants. TheGroup’enants. The Group’s

base case scenario assumes:

• revenue growth of c.4-5% per annum, driven predominantly by volume increases

resulting from net contract wins;

• raw material prices reducing compared to 2023 levels, which in themselves remained

significantly higher than the pre-Covid-19 pandemic era as a result of exceptional levels

of input cost inflation;

• interest rates increasing by c.100 basis points versus budgeted assumptions; and

• Sterling: Euro exchange rate of £1:€1.12.

The Directors have considered a severe but plausible downside scenario to stress test the

Group’s financial forecasts, with the following assumptions:

• no revenue growth from assumed contract wins in 2024;

• revenue growth reducing to half of that assumed in the original three-year plan for20ee-year plan for 2025;

• an increase in raw material and packaging input costs compared to latest forecasts;

• interest rates increasing by a further 100 basis points; and

• Sterling appreciating significantly against the Euro to £1:€1.22.

In the event that such a severe but plausible downside risk scenario occurs, the Group

would remain compliant with current banking covenants.

After reviewing the current liquidity position, financial forecasts, stress testing of potential

risks and considering the uncertainties described above, and based on the currently

committed funding facilities, the Directors have a reasonable expectation that the Group

has sufficient resources to continue in operational existence and without significant

curtailment of operations for the foreseeable future. For these reasons the Directors

continue to adopt the going concern basis of accounting in preparing the Group financial

statements.

Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting

provided to the chief operating decision maker. The Board of McBride plc assesses

the financial performance and position of the Group and makes strategic decisions.

Therefore, the Board of McBride plc has been identified as the chief operating

decisionmakerdecision maker.

Financial information is presented to the Board by product technology for the purposes

of allocating resources within the Group and assessing the performance of the Group’s

businesses. There are five separately managed and accountable business divisions:

• Liquids;

• Unit Dosing;

• Powders;

• Aerosols; and

• Asia Pacific.

Notes to the consolidated financial statements

Year ended 30 June 2023

1. Corporate information

McBride plc (‘the Company’) is a public company limited by shares incorporated and

domiciled in the United Kingdom and registered in England and Wales. The Company’s

ordinary shares are listed on the London Stock Exchange. The registered office of

the Company is Middleton Way, Middleton, Manchester M24 4DP. For the purposes of

DTR6.4.2R, the Home State of McBride plc is the UnitedKingdom.TR 6.4.2R, the Home State of McBride plc is the United Kingdom.

The Company and its subsidiaries (together, ‘the Group’) is Europe’s leading provider

of private label and contract manufactured products for the domestic household and

professional cleaning/hygiene markets. The Company develops and manufactures

products for the majority of retailers and major brand owners throughout the UK,

Europe and Asia.

2. Accounting policies

Accounting period

The Group’s annual financial statements are drawn up to 30June. Twn up to 30 June. These financial

statements cover the year ended 30 June 2023 (‘2023’) with comparative amounts for

the year ended 30 June 2022 (‘2022’).

Basis of preparation

The consolidated financial statements on pages 158 to 211 have been prepared on the

going concern basis 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. The financial statements have been prepared under the

historical cost convention, modified in respect of the revaluation to fair value of financial

assets and liabilities (derivative financial instruments) at fair value through profit or loss,

assets held for sale and defined benefit pension plan assets.

A summary of the significant accounting policies is set out below. The accounting

policies that follow set out those policies that apply in preparing the financial

statementsfstatements for the year ended 30 June 2023 and the Group and Company have

appliedthe same policies throughout the yapplied the same policies throughout the year.

Going concern

The Group’s business activities, together with the factors likely to affect its future

development, performance and position, are set out in the Strategic report.

Thefinancialposition of the GrThe financial position of the Group, its cash flows, liquidity position and borrowing

facilities are described in the CFO’s report on pages 35 to 36. In addition, note 20

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 and liquidity risks. The Group meets

its funding requirements through internal cash generation and bank credit facilities.

At 30June20At 30 June 2023, committed undrawn facilities and net cash position (i.e. liquidity, as

defined in note2) amounted tdefined in note 2) amounted to £59.3 million.

Financial statements

164 McBride plc Annual Report and Accounts 2023

Intra-group balances and transactions, and any unrealised gains and losses arising from

intra-group transactions, are eliminated on consolidation. Consistent accounting policies

are adopted across the Group.

Business combinations

A business combination is a transaction or other event in which the Group obtains control

of one or more businesses. Business combinations are accounted for using the acquisition

method.

Goodwill arising in a business combination represents the excess of the sum of the

consideration transferred, the amount of any non-controlling interest in the acquired

business and, in a business combination achieved in stages, the fair value at the acquisition

date of the Group’s previously held equity interest, over the net total of the identifiable

assets and liabilities of the acquired business at the acquisition date. If the identifiable

assets and liabilities of the acquired business exceed the aggregate of the consideration

transferred, the amount of any non-controlling interest in the business and the fair value

at the acquisition date of any previously held equity interest, the excess is recognised as

a gain in profit or loss. The fair value of assets and liabilities can be revised up to twelve

months following the date of acquisition.

Consideration transferred in a business combination represents the sum of the fair values

at the acquisition date of the assets given, liabilities incurred or assumed and equity

instruments issued by the Group in exchange for control over the acquired business.

Acquisition-related costs are charged to profit or loss in the year in which they are incurred.

Changes in the amount of contingent consideration payable that result from events after

the acquisition date, such as meeting a revenue or profit target, are not measurement

period adjustments and are, therefore, recognised in profit or loss.

Any non-controlling interest in the acquired business is measured either at fair value or at

the non-controlling interest’s proportionate share of the identifiable assets and liabilities of

the business.

Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of

control are accounted for within equity.

If the Group loses control of a subsidiary, it derecognises the assets and liabilities and

related equity components of the subsidiary and measures any investment retained in

the former subsidiary at its fair value at the date when control is lost. Any gain or loss on

a loss of control is recognised in profit or loss .

2. Accounting policies continued

Segmental reporting continued

Intra-group revenue from the sale of products is agreed between the relevant

customer-facing units and eliminated in the segmental presentation that is presented to

the Board. Programme Compass is delivering an increased focus on cost optimisation

and has meant that most overhead costs are now directly attributed within the

respective divisions’ income statements. The only costs now allocated out to the

divisions are central overheads, with corporate costs being retained at a Group level.

Central overheads are allocated to a reportable segment proportionally using an

appropriate cost driver. Corporate costs, which include the costs associated with the

Board and the Executive Leadership Team, governance and listed company costs and

certain central functions (mostly associated with financial disciplines such as treasury),

are reported separately. Exceptional items are detailed in note 4 and are not allocated

to the reportable segments as this reflects how they are reported to the Board. Finance

expense and income are not allocated to the reportable segments, as the central

treasury function manages this activity, together with the overall net debt position of

theGroupthe Group.

The Board uses adjusted operating profit to measure the profitability of the Group’s

businesses. Adjusted operating profit is, therefore, the measure of segment profit

presented in the Group’s segment disclosures. Adjusted operating profit represents

operating profit before specific items that are considered to hinder comparison of

the trading performance of the Group’s businesses either year on year or with other

businesses. During the years under review, the items excluded from operating profit

in arriving at adjusted operating profit were the amortisation of intangible assets

and exceptional items. Adjusted operating profit is not defined under IFRS and is

therefore termed a non-GAAP measure. The rationale for using this measure, along

with a reconciliation from the nearest measures prepared in accordance with IFRS,

isdiscussedin alternativis discussed in alternative performance measures on page 174.

Segment information is presented in note 3.

Principal accounting policies

The Group and Company financial statements are presented in Pounds Sterling and all

values are rounded to the nearestmillion Po the nearest million Pounds (£m) except where otherwiseindicated.cept where otherwise indicated.

Basis of consolidation

The consolidated financial statements include the results, cash flows and assets

and liabilities of the Group and its subsidiaries. Details of the Group’s subsidiaries at

30June2023 ar30 June 2023 are set out on pages 219 and 220.

Subsidiaries are all entities over which the Group has control. The Group controls an entity

where the Group is exposed to, or has rights to, variable returns from its involvement

with the entity and has the ability to affect those returns through its power to direct the

activities of the entity. The Group’s results, cash flows and assets and liabilities include

those of each of its subsidiaries from the date on which the Group obtains control until

such time as the Group loses control.

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

165 McBride plc Annual Report and Accounts 2023

Payment is typically due 60 days after despatch. TheGroup has an obligation fhe Group has an obligation for returns

due to damages and recognises a credit note provision and corresponding adjustment

torto revenue.

The Group acts as an agent in some jurisdictions in relation to environmental

taxes collected from customers and paid to third parties. There is no impact to the

consolidated income statement for the collection and payment of these taxes.

Exceptional items

Exceptional items are material either individually or, if of a similar type, in aggregate

and which, due to their nature or the infrequency of the events giving rise to them,

are presented separately to assist users of the financial statements in assessing

the underlying trading performance and trends of the Group’s businesses either

year-on-year or with other businesses.

Examples of exceptional items include, but are not limited to, the following:

• restructuring and other expenses relating to the integration of an acquired business

and related expenses for reconfiguration of the Group’s activities;

• impairment of current and non-current assets;

• gains/losses on disposals of businesses;

• acquisition-related costs, including adviser fees incurred for significant transactions,

and adjustments to the fair values of assets and liabilities that result in non-recurring

charges to the income statement; and

• costs arising because of material and non-recurring regulatory and litigation matters.

Borrowing costs

Borrowing costs directly attributable to the construction of a manufacturing or

distribution facility are capitalised as part of the cost of the facility if, at the outset of

construction, the facility was expected to take a substantial period of time to get ready

for its intended use.

Costs attributable to the arrangement of term borrowing facilities are amortised over the

life of those facilities.

Allother borroAll other borrowing costs are recognised in profit or loss in the year in which they are

incurred.

Goodwill

Goodwill arising in a business combination is recognised as an intangible asset and is

allocated to the cash-generating unit (CGU) or group of CGUs that are expected to

benefit from the synergies of the acquisition.

Goodwill is not amortised but is tested for impairment annually and whenever there are

events or changes in circumstances that indicate that its carrying amount may not be

recoverable.

Goodwill is carried at cost less any recognised impairment losses. Impairment charges

are recognised in administrative expenses .

2. Accounting policies continued

Principal accounting policies continued

Foreign currency translation

The Group’s presentational currency is Pound Sterling. At an entity level, transactions

in foreign currencies are translated into the entity’s functional currency at the exchange

rate ruling at the date of the transaction. Monetary assets and liabilities denominated in

foreign currencies are translated at the exchange rate ruling at the balance sheet date.

Currency translation differences arising at entity level are recognised in profit or loss.

Onconsolidation, the rOn consolidation, the results of foreign operations are translated into Pound Sterling

at the average exchange rate for the year and their assets and liabilities are translated

into Pound Sterling at the exchange rate ruling at the balance sheet date. Currency

translation differences arising on consolidation are recognised in other comprehensive

income and taken to the currency translation reserve.

In the event that a foreign operation is sold, the gain or loss on disposal recognised in

profit or loss is determined after taking into account the cumulative currency translation

differences arising on consolidation of the operation subsequent to the adoption of IFRS.

In the cash flow statement, the cash flows of foreign operations are translated into

Sterling at the average exchange rate for the year.

Revenue

Revenue from contracts with customers from the sale of goods is measured at the

invoiced amount, net of sales rebates, discounts, value added tax and other sales taxes.

Revenue is recognised on the transfer of the control of goods upon delivery of the

goods to the customer when the significant risks and rewards of ownership are passed

to the customer and when all contractual performance obligations have been met.

Accruals for sales rebates and discounts are established at the time of sale based on

management’s judgement of the amounts payable under the contractual arrangements

with the customer.

The estimated rebates or discounts payable do not contain significant estimates as they

are mostly contractually driven and are based on, amongst other things, expected sales

to the customer during the period to which the rebate or discount relates, historical

experience and market information.

The type of rebates and discounts given by the Group include:

• volume-related rebates for achieving sales targets within a set period; and

• promotional, marketing and other allowances to support specific promotional pricing

discounts, in-store displays and cost reimbursement.

At 30 June 2023, the carrying amount of accruals relating to rebates and discounts

amounted to £2.8million (20amounted to £2.8 million (2022: £2.1m). Rebates equate to less than 1.0% (2022: less than

1.0%) of revenue and are not considered to be a critical judgement. There is an element of

judgement applied to the level of future achieved sales within volume-related rebates.

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

166 McBride plc Annual Report and Accounts 2023

Property, plant and equipment acquired in a business combination is depreciated on

a straight-line basis so as to charge its fair value at the date of acquisition, less any

residual value, to profit or loss over the remaining expected useful life of the asset.

Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease

(i.e.the da(i.e. the date the underlying asset is available for use). Right-of-use assets are measured

at cost, less any 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, initial direct costs incurred, and lease payments made on

or before the commencement date less any lease incentives received. Unless the Group

is reasonably certain to obtain ownership of the leased asset at the end of the lease

term, the recognised right-of-use assets are depreciated on a straight-line basis over

theshorter of its estimatthe shorter of its estimated useful life and the lease term. Right-of-use assets are subject

toimpairment.to impairment.

Lease liabilities

The Group recognises lease liabilities measured at the present value of lease payments

to be made over the lease term. The lease payments include fixed payments (including

in-substance fixed payments), variable lease payments that depend on an index or

a rate, amounts expected to be paid under residual value guarantees, less any lease

incentives receivable.

In determining the relevant cash flows within a contract for each lease component, the

Group has made use of the practical expedient available under IFRS 16 not to separate

non-lease components from lease components, and instead accounts for each lease

component and any associated non-lease components as a single lease component.

The lease payments also include the exercise price of a purchase option reasonably

certain to be exercised by the Group and payments of penalties for terminating a lease,

ifthe lease term rif the lease term reflects the Group exercising the option to terminate. The variable lease

payments that do not depend on an index or a rate are recognised as an expense in the

year in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses the incremental

borrowing rate at the lease commencement date if the interest rate implicit in the

leaseis not readily detlease is not readily determinable. After the commencement date, the amount of lease

liabilities is increased to reflect the accretion of interest and reduced for the lease

payments made. In addition, the carrying amount of lease liabilities is remeasured if

there is a modification, a change in the lease term, a change in the in-substance fixed

lease payments or a change in the assessment to purchase the underlying asset.

The Group determines the lease term as the non-cancellable term of the lease, together

with any periods covered by an option to extend the lease if it is reasonably certain to be

exercised, or any periods covered by an option to terminate the lease, if it is reasonably

certain not to be exercised.

2. Accounting policies continued

Principal accounting policies continued

Other intangible assets

Other intangible assets are stated at cost less accumulated amortisation and any

recognised impairment loss. Amortisation is recognised in administrative expenses.

(i) Assets acquired in business combinations

An intangible resource acquired in a business combination is recognised as an

intangible asset if it is separable from the acquired business or arises from contractual

or legal rights. An acquired intangible asset with a definite useful life is amortised on a

straight-line basis so as to charge its fair value at the date of acquisition to profit or loss

over its expected useful life as follows:

Patents, brands and trademarks – up to five years

Customer relationships – up to eight years

(ii) Product development costs

All research expenditure is charged to profit or loss in the year in which it is incurred.

Development expenditure is charged to profit or loss in the year in which it is incurred

unless it relates to the development of a new or significantly improved product or

process whose technical and commercial feasibility is proven at the time of development

and therefore capitalised as an intangible asset. Development expenditure is measured

at cost and amortised on a straight-line basis over the expected useful life, which is in

the range of three to five years.

(iii) Computer software

Computer software and software licences are recognised asintangible assets measured ecognised as intangible assets measured

at cost and are amortised on a straight-line basis over their expected useful lives, which

are in the range of three to five years.

Directly attributable costs that are capitalised as part of computer software include the

related software development employee costs.

Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation and any

recognised impairment losses.

Cost includes the original purchase price of the asset and the costs attributable to

bringing the asset to its working condition for its intended use by management.

Freehold land and freehold buildings are presented as land and buildings. Freehold land

and payments on account and assets in the course of construction are not depreciated.

Otherwise, property, plant and equipment is depreciated on a straight-line basis so as to

charge its cost, less any residual value, to profit or loss over the expected useful life of

the asset as follows:

Freehold buildings – 50 years

Plant and equipment – three to ten years

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

167 McBride plc Annual Report and Accounts 2023

Inventories

Inventories are stated at the lower of cost and net realisable value with due allowance

for any excess, obsolete or slow-moving items. Cost represents the expenditure incurred

in bringing each product to its present location and condition. The cost of raw materials

is measured on a first-in, first-out (FIFO) basis. The cost of finished goods and work

in progress comprises the cost of raw materials, direct labour and other direct costs,

together with related production overheads based on normal operating capacity. Net

realisable value is the estimated selling price less estimated costs of completion and

estimated selling and distribution costs.

Financial instruments

The Group classifies its financial assets in the following categories:

• those to be measured subsequently at fair value (either through other comprehensive

income (OCI) or through profit or loss); and

• those to be measured at amortised cost.

The classification depends on the Group’s business model for managing the financial

assets and the contractual terms of the cash flows. For assets measured at fair value,

gains and losses will either be recorded in profit or loss or OCI. The Group reclassifies

debt instruments when, and only when, its business model for managing those assets

changes.

At initial recognition, the Group measures a financial asset at its fair value plus, in the

case of a financial asset not at fair value through profit or loss (FVPL), transaction costs

that are directly attributable to the acquisition of the financial asset. Transaction costs of

financial assets carried at FVPL are expensed in profit or loss.

Financial assets with embedded derivatives are considered in their entirety when

determining whether their cash flows are solely payment of principal and interest.

Subsequent measurement of debt instruments depends on the Group’s business model

for managing the asset and the cash flow characteristics of the asset. There are three

measurement categories into which the Group classifies its debt instruments:

• amortised cost: Assets that are held for collection of contractual cash flows where

those cash flows represent solely payments of principal and interest are measured

at amortised cost. Interest income from these financial assets is included in finance

income using the effective interest rate method. Any gain or loss arising on

derecognition is recognised directly in profit or loss and presented in other gains/

(losses) together with foreign exchange gains and losses. Impairment losses are

presented as a separate line item in the statement of profit or loss. The Group

assesses on a forward-looking basis the expected credit losses (ECL) associated

with its debt instruments carried at amortised cost. Theimpairment methodology t. The impairment methodology

applied depends on whether there has been a significant increase in credit risk. ECLs

are recognised in two stages. For credit exposures for which there has not been

a significant increase in credit risk since initial recognition, ECLs are provided for

credit losses that result from default events that are possible within the next twelve

months (atwelvmonths (a twelve-month ECL). For those credit exposures for which there has been a

significant increase in credit risk since initial recognition, a loss allowance is required

for credit losses expected over the remaining life of the exposure, irrespective of the

timing of the default (a lifetime ECL);

2. Accounting policies continued

Principal accounting policies continued

Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of

machinery and equipment (i.e. those leases that have a lease term of twelve months or

less from the commencement date and do not contain a purchase option). It also applies

the lease of low-value assets recognition exemption to leases of office equipment that

are considered of low value (i.e.below £5,e. below £5,000). Lease payments on short-term leases

and leases of low-value assets are recognised as an expense on a straight-line basis over

the lease term.

Impairment of non-financial assets

Goodwill, other intangible assets and property, plant and equipment are tested for

impairment whenever events or circumstances indicate that their carrying amounts

may not be recoverable. Additionally, goodwill is subject to an annual impairment test

whether or not there are any indicators of impairment.

An asset is impaired to the extent that its carrying amount exceeds its recoverable

amount, which represents the higher of the asset’s value-in-use and its fair value less

costs of disposal. An asset’s value-in-use represents the present value of the future

cash flows expected to be derived from the continued use of the asset. Fair value less

costs of disposal is the amount obtainable from the sale of the asset in an arm’s length

transaction between knowledgeable, willing parties, less the costs of disposal.

Where it is not possible to estimate the recoverable amount of an individual asset, the

recoverable amount is determined for the cash-generating unit (CGU) to which the

asset belongs. An asset’s CGU is the smallest group of assets that includes the asset

and generates cash inflows that are largely independent of the cash inflows from other

assets or groups of assets. Goodwill does not generate cash flows independently of

other assets and is, therefore, tested for impairment at the level of the CGU or group of

CGUs to which it is allocated.

Value-in-use is based on estimates of pre-tax cash flows discounted at a pre-tax

discount rate that reflects the risks specific to the CGU to which the asset belongs.

Where necessary, impairment of non-financial assets other than goodwill is recognised

before goodwill is tested for impairment. When goodwill is tested for impairment and

the carrying amount of the CGU or group of CGUs to which it is allocated exceeds its

recoverable amount, the impairment is allocated first to reduce the carrying amount of

the goodwill and then to the other non-financial assets belonging to the CGU or group

of CGUs pro-rata on the basis of their respective carrying amounts.

Impairment losses are recognised in profit or loss. Impairment losses recognised in

previous years for assets other than goodwill are reversed if there has been a change in

the estimates used to determine the asset’s recoverable amount, but only to the extent

that the carrying amount of the asset does not exceed its carrying amount had no

impairment been recognised in previous years. Impairment losses recognised in respect

of goodwill cannotbe reof goodwill cannot be reversed.

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

168 McBride plc Annual Report and Accounts 2023

(v) Net debt

Net debt comprises cash and cash equivalents, overdrafts, bank and other loans and lease

liabilities.

(vi) Derivative financial instruments

The Group uses derivative financial instruments, principally forward currency contracts and

interest rate swaps, to reduce its exposure to exchange rate and interest rate movements.

The Group does not hold or issue derivatives for speculative purposes.

Derivative financial instruments are recognised as assets and liabilities measured at their

fair values at the balance sheet date. Changes in their fair values are recognised in profit

or loss. Derivative financial instruments are, therefore, likely to cause volatility in profit or

loss in situations where the hedged item is not recognised in the financial statements or

is recognised but its carrying amount is not adjusted to reflect fair value changes arising

from the hedged risk, or is so adjusted but that adjustment is not recognised in profit or

loss. Provided the conditions specified by IFRS 9, ‘Financial instruments’ are met, hedge

accounting may be used to mitigate this volatility in profit or loss.

Derivative financial instruments are classified as current assets or liabilities unless they are in

a designated hedging relationship and the hedge item is classified as a non-current asset or

liability. Derivative financial instruments that are not in a designated hedging relationship are

classified as FVPL.

(vii) Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet

where there is a legally enforceable right to offset the recognised amounts, and there is an

intention to settle on a net basis or realise the asset and settle the liability simultaneously.

Hedge accounting

For a hedging relationship to qualify for hedge accounting, it must be documented on

inception together with the Group’s risk management objective and strategy for initiating

the hedge, and it must both be expected to be highly effective in offsetting the changes

in cash flows or fair value attributed to the hedged risk and actually be highly effective in

doing so. When hedge accounting is used, the hedging relationship is classified as a cash

flow hedge or a net investment hedge.

When forward contracts are used to hedge forecast transactions, the Group generally

designates the change in the fair value of the forward contract related to both the spot

component and forward element as the hedging instrument. For option contracts the

change in the fair value of the option contract related to the intrinsic value is designated

asthe hedging instrument. The time vas the hedging instrument. The time value of money is treated as the cost of hedging.

(i) Cash flow hedge

Hedging relationships are classified as cash flow hedges where the hedging instrument

hedges exposure to variability in cash flows that is attributable either to a particular risk

associated with a recognised asset or liability (such as interest payments on variable

rate debt), a highly probable forecast transaction (such as forecast revenue) ora firm) or a firm

commitment that could affect profit or loss.

2. Accounting policies continued

Principal accounting policies continued

Financial instruments continued

• fair value through other comprehensive income (FVOCI): Assets that are held for

collection of contractual cash flows and for selling the financial assets, where the assets’

cash flows represent solely payments of principal and interest, are measured at FVOCI.

Movements in the carrying amount are taken through OCI, except for the recognition of

impairment gains or losses, interest income and foreign exchange gains and losses which

are recognised in profit or loss. When the financial asset is derecognised, the cumulative

gain or loss previously recognised in OCI is reclassified from equity to profit or loss and

recognised in other gains/(losses). Interest income from these financial assets is included

in finance income using the effective interest rate method. Foreign exchange gains and

losses are presented in other gains/(losses) and impairment expenses are presented as a

separate line item in the statement of profit or loss; and

• fair value through profit or loss (FVPL): Assets that do not meet the criteria for

amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that

is subsequently measured at FVPL is recognised in profit or loss and presented net within

other gains/(losses) in the year in which it arises.

(i) Trade and other receivables

Trade and other receivables are recognised initially at fair value and subsequently measured

at amortised cost using the effective interest method, less provision for impairment.

Under the Group’s business model, trade andother recs business model, trade and other receivables are held for collection of

contractual cash flows and represent solely payments of principal and interest. Aprovision est. A provision

for impairment of trade receivables is established based on the expected credit loss.

For trade receivables and contract assets, the Group applies the IFRS 9 simplified approach

in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead

recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has

established a provision matrix that is based on shared credit risk characteristics, its historical

credit loss experience and days past due, adjusted for forward-looking factors specific to

the debtors and the economic environment. The amount of the provision is recognised in

the balance sheet within trade receivables. Movements in the provision are recognised in the

profit and loss account in administrative expenses.

(ii) Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, deposits available on demand and other

short-term, highly liquid investments with a maturity on acquisition of three months or less

and bank overdrafts. Bank overdrafts are presented as current liabilities to the extent that

there is no right of offset or intention to offset with cash balances.

(iii) Trade payables

Trade payables are initially recognised at fair value and subsequently held at amortised cost.

(iv) Bank and other loans

Bank and other loans are initially recognised at fair value, net of directly attributable

transaction costs, if any, and are subsequently measured at amortised cost using the

effective interest rate method.

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

169 McBride plc Annual Report and Accounts 2023

(ii) Defined benefit schemes

Under a defined benefit pension scheme, the amount of pension that an employee will

receive on retirement is fixed based on factors such as pensionable salary, years of

service and age on retirement. In most cases, the schemes are funded by contributions

from the Group and the participating employees. The Group is obliged to make

additional contributions if the Fund has insufficient assets to meet its obligation to pay

accrued pension benefits.

Actuarial valuations of the defined benefit schemes are carried out annually at the

balance sheet date by independent qualified actuaries. Scheme assets are measured

at their fair value at the balance sheet date. Benefit obligations are measured on an

actuarial basis using the projected unit credit method and are discounted using the

market yields on high-quality corporate bonds at the balance sheet date. The defined

benefit liability or asset recognised in the balance sheet comprises the difference

between the present value of the benefit obligations and the fair value of the scheme

assets. Where a scheme is in surplus, the asset recognised is limited to the present value

of any amounts that the Group expects to recover by way of refunds or a reduction in

future contributions.

Defined benefit schemes are recognised in profit or loss by way of the service cost and

the net interest cost on the benefit obligation. The service cost represents the increase in

the present value of the benefit obligation relating to additional years of service accrued

during the year, less employee contributions.

Gains or losses on curtailments or settlements are recognised in profit or loss in the year

in which the curtailment or settlement occurs.

Actuarial gains and losses are recognised in other comprehensive income in the year in

which they occur.

Share-based payments

The Group operates share schemes under which it grants equity-settled and cash-settled

awards over ordinary shares in the Company to certain of its employees. The Group

recognises a compensation expense that is based on the fair value of the awards measured

using the Black-Scholes option pricing formula or the Monte Carlo valuation model.

For equity-settled awards, the fair value reflects market performance conditions

and all non-vesting conditions. Fair value is determined at the grant date and is not

subsequently remeasured unless the relevant conditions are modified. Adjustments

are made to the compensation expense to reflect actual and expected forfeitures due

to failure to satisfy service conditions or non-market performance conditions. For

cash-settled awards at each reporting date, the estimate of the number of options that

are expected to vest is revised based on the non-market vesting and service conditions.

Generally, the compensation expense is recognised on a straight-line basis over the

vesting period. For equity-settled awards, a corresponding credit is recognised in equity

while for cash-settled awards at each reporting date, a corresponding liability to settle is

recognised in the balance sheet.

In the event of the cancellation of an equity-settled award, the compensation expense

that would have been recognised over the remainder of the vesting period is recognised

immediately in profit or loss.

2. Accounting policies continued

Principal accounting policies continued

Hedge accounting continued

(i) Cash flow hedge continued

Where a hedging relationship is classified as a cash flow hedge, to the extent that the

hedge is effective, the change in the fair value of the hedging instrument is recognised

in other comprehensive income rather than in profit or loss. The gain or loss relating to

the ineffective portion is recognised immediately in profit and loss. When the hedged

item affects profit or loss (for example, when a forecast sale that is hedged takes place),

the cumulative gain or loss recognised in other comprehensive income is transferred

to profit or loss. When a forecast transaction that has been hedged results in the

recognition of a non-financial asset (for example, inventory), the cumulative gain or loss

recognised in other comprehensive income is transferred from equity as an adjustment

to the cost of theasset.t of the asset.

When a hedging instrument expires or is sold, or when a hedge no longer meets the

criteria for hedge accounting, any cumulative gain or loss existing in equity at that

time remains in equity and is recognised when the forecast transaction is ultimately

recognised in the income statement. When a forecast transaction is no longer expected

to occur, the cumulative gain or loss that was reported in equity is immediately

transferred to the incomestatement. ome statement.

(ii) Net investment hedge

A net investment hedge is the hedge of the currency exposure on the retranslation of

the Group’s net investment in a foreign operation. Net investment hedges are accounted

for similarly to cash flow hedges. Changes in the fair value of the hedging instrument

are, to the extent that the hedge is effective, recognised in other comprehensive income.

In the event that the foreign operation is disposed of, the cumulative gain or loss

recognised in other comprehensive income is transferred to profit or loss and included in

the gain or loss on disposal of the foreign operation.

Pensions and other post-employment benefits

Post-employment benefits principally comprise pension benefits provided to employees

in the UK and Continental Europe. The Group operates both defined benefit and defined

contribution pension schemes.

(i) Defined contribution schemes

Under a defined contribution pension scheme, the Group makes fixed contributions

to a separate pension fund. The amount of pension that the employee will receive on

retirement is dependent entirely on the investment performance of the Fund and the

Group has no obligationwith rGroup has no obligation with regard to the future pension values receivedby emploed by employees.

Payments to defined contribution schemes are recognised in profit or loss in the year in

which they fall due. To the extent defined contribution scheme contributions are due but

unpaid, amounts outstanding are recognised in other payables.

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

170 McBride plc Annual Report and Accounts 2023

Deferred tax is provided on temporary differences arising on investments in foreign

subsidiaries, except where the Group is able to control the reversal of the temporary

difference and it is probable that it will not reverse in the foreseeable future.

Deferred tax is calculated using the enacted or substantively enacted tax rates that are

expected to apply when the asset is recovered or the liability is settled.

Current tax assets and liabilities are offset when there is a legally enforceable right to set

off the amounts and management intends to settle on a net basis. Deferred tax assets

and liabilities are offset where there is a legally enforceable right to set off current tax

assets and liabilities and the deferred tax assets and liabilities relate to income taxes

levied by the same taxation authority on the same taxable entity.

Current tax and deferred tax is recognised in profit or loss unless it relates to an item

that is recognised in the same or a different year outside profit or loss, in which case it

too is recognised outside profit or loss, either in other comprehensive income or directly

in equity.

Where there is uncertainty as to whether treatments in the tax return will be accepted by

a taxation authority, the judgements and estimates made in recognising and measuring

the uncertainty are based on information available at the time. The Group reassesses

these judgements and estimates if the facts and circumstances change or new

information becomes available. This may include, but is not restricted to, examination by

a taxation authority, implicit or explicit acceptance by a taxation authority of a particular

tax treatment, the expiry of the taxation authority’s right to examine or re-examine a tax

treatment and changes in legislation.

Payments to shareholders

Dividends paid and received are included in the Company financial statements in the

year in which the related dividends are actually paid or received or, in respect of the

Company’s final dividend for the year, approved by shareholders.

It is the Board’s intention that any future dividends will be final dividends paid annually

in cash, not by the allotment and issue of B Shares. Consequently, the Board is not

seeking shareholder approval at the 2023 AGM to capitalise reserves for the purposes

of issuing B Shares or to grant Directors the authority to allot such shares. Existing

B Shares will continue to be redeemable but limited to one redemption date per

annum in November of each year. BShares issued but not redeemed ar. B Shares issued but not redeemed are classified

ascurrentliabilities.as current liabilities.

Own shares

Own shares represent the Company’s ordinary shares that are held by the Company in

treasury or by a sponsored Employee Share Ownership Plan (ESOP) trust in relation

to the Group’s employee share schemes. When own shares are acquired, the cost of

purchase in the market is deducted from equity. Gains or losses on the subsequent

transfer or sale of own shares are also recognised in equity.

2. Accounting policies continued

Principal accounting policies continued

Provisions

A provision is a liability of uncertain timing or amount and is generally recognised when

the Group has a present obligation (legal or constructive) as a result of a past event, it

is probable that a payment will be required to settle the obligation and the payment can

be estimated reliably.

Provision is made for restructuring costs when a detailed formal plan for the

restructuring has been determined and the plan has been communicated to the parties

that may beaffthat may be affected by it. Gains from the expected disposal of assets are not taken

into account in measuring restructuringproount in measuring restructuring provisions and provision is not made for future

operating losses.

At 30 June 2023, the Group held provisions amounting to £5.3million (2022: £7o £5.3 million (2022: £7.2m),

which principally represented reorganisation and restructuring costs and environmental

remediation provisions. Adjustment to the amounts recognised would arise if it becomes

necessary to revise the assumptions and estimates on which the provisions are based,

if circumstances change such that contingent liabilities must be recognised or if

management becomes aware of obligations that are currently unknown.

Provisions are discounted where the effect of the time value of money is material.

Contingent liabilities

The Group recognises provisions for liabilities when it is more likely than not that a

settlement will be required and the value of such a payment can be reliably estimated.

There are a number of contingent liabilities that arise in the normal course of business

which, if realised, are not expected to result in a material liability to the Group.

Taxation

Current tax is the amount of tax payable or recoverable in respect of the taxable profit

or loss for the year. Taxable profit differs from accounting profit because it excludes

income or expenses that are recognised in the year for accounting purposes but are

either not taxable or not deductible for tax purposes or are taxable or deductible in

earlier or subsequent years. Current tax is calculated using tax rates that have been

enacted or substantively enacted at the balance sheet date.

Deferred tax is tax expected to be payable or recoverable on differences between the

carrying amount of an asset or liability and its tax base used in calculating taxable profit.

Deferred tax is accounted for using the liability method, whereby deferred tax liabilities

are generally recognised for all taxable temporary differences and deferred tax assets

are recognised to the extent that it is probable that taxable profits will be available in

thefuture againsthe future against which the deductible temporary differences may be utilised.

Deferred tax assets and liabilities are not recognised if the temporary difference arises

from the initial recognition of goodwill or from the initial recognition of other assets

and liabilities in a transaction other than a business combination that affects neither

accounting profit nor taxable profit.

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

171 McBride plc Annual Report and Accounts 2023

New accounting standards and interpretations issuedbut not yetations issued but not yet effective

The new and amended standards and interpretations that are issued, but not

yet effective, up to the date of issuance of the Group’s financial statements are

disclosed below. TheGroup intends the Group intends to adopt these new and amended standards and

interpretations, if applicable, when they become effective.

• Amendments to IAS 1, aiming to promote consistency in applying the requirements by

helping companies determine whether, in the statement of financial position, debt and

other liabilities with an uncertain settlement date should be classified as current (due

or potentially due to be settled within one year) or non-current – effective for annual

periods beginning on or after 1 January 2024.

• Amendments to IFRS 16, clarifying how a seller-lessee subsequently measures

sale and leaseback transactions effective for annual periods beginning on or after

1January 2021 January 2024.

• Amendments to IAS 7 and IFRS 7, adding disclosure requirements and ‘signposts’

within existing disclosure requirements, asking entities to provide qualitative and

quantitative information about supplier finance arrangements – effective for annual

periods beginning on or after 1 January 2024.

None of the amendments are expected to have a significant impact on the Group;

however, the Group will continue to consider these and any additional amendments,

interpretations and new standards to identity potential future impact.

Critical accounting judgements and key sources ofestimation uncertaintyces of estimation uncertainty

In applying the Company’s accounting policies as described in this note, the Directors

are required to make judgements, and estimates and assumptions, that affect the

reported amounts of its assets, liabilities, income and expenses that are not readily

identifiable from other sources. Theestimates and asces. The estimates and associated assumptions are based

on historical experience and other factors that are considered to be relevant, including

expectations of future events that might have a financial impact on the Company and

that are believed to be reasonable under the circumstances. Actual outcomes could

differ from those estimates and affect the Company’s results in future years.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions

to accounting estimates are recognised in the period in which the estimate is revised if

the revision affects only that period, or in the period of the revision and future periods if

the revision affects both current and future periods.

2. Accounting policies continued

New accounting standards and interpretations

The following standards and amendments were effective for periods beginning on or

after 1 January 2022 and as such have been applied in these financial statements. The

Group has not early adopted any other standard or interpretation that is issued but not

yet effective.

• Amendments to IFRS 9, clarifying which fees an entity includes when it applies the

‘10per cent’ test in as‘10 per cent’ test in assessing whether to derecognise a financial liability.

• Amendments to IAS 37, specifying that the ‘cost of fulfilling’ a contract comprises the

‘costs that relate directly to the contract’.

• Amendments to IAS 1, requiring companies to disclose their material accounting

policy information rather than their significant accounting policies.

• Amendments to IAS 8, clarifying how companies should distinguish changes in

accounting policies from changes in accounting estimate.

• Amendments to IAS 12, requiring companies to recognise deferred tax on transactions

that, on initial recognition, give rise to equal amounts of taxable and deductible

temporary differences.

• Amendments to IAS 12, providing a temporary exception to the requirements

regarding deferred tax assets and liabilities related to Pillar 2 income taxes.

• Amendments to Interest rate benchmark reform: phase 2, dealing with issues

affecting financial reporting in the period before the replacement of an existing

interest rate benchmark with an alternative interest rate and considering the

implications for specific hedge accounting requirements in IFRS 9 and IAS 39,

whichrequirwhich require forward-looking analysis.

The following standards and amendments had no impact on the financial statements of

the Group:

• Amendments to IFRS 1, permitting a subsidiary that applies paragraph D16(a) of

IFRS1 to measurIFRS 1 to measure cumulative translation differences using the amounts reported

byitsparby its parent, based on the parent’s date of transition to IFRS;

• Amendments to IFRS 16, extending the exemption from assessing whether a

Covid-19-related rent concession is a lease;

• Amendments to IAS 41, removing a requirement to exclude cash flows from taxation

when measuring fair value;

• Amendments to IFRS 3, clarifying the minimum requirements to be a business,

removing the assessment of a market participant’s ability to replace missing elements,

and narrowing the definition of outputs;

• Amendments to IAS 16, prohibiting deduction from the cost of an item of property,

plant and equipment, any proceeds from selling items produced while bringing that

asset to the location and condition necessary for it to be capable of operating in the

manner intended by management;

• Amendments to IFRS 17, addressing concerns and implementation challenges that

were identified after IFRS 17 was published; and

• Amendments to IFRS 4, regarding the fixed expiry date for the temporary exemption

in IFRS 4 from applying IFRS 9.

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

172 McBride plc Annual Report and Accounts 2023

2. Accounting policies continued

Critical accounting judgements and key sources ofestimation

uncertaintycontinued

The Directors have carefully considered the accounting implications of the following

developments in their review of critical judgements, estimates and assumptions:

• Impacts of high inflation and interest rates: Companies continue to experience the

effect of high inflation and interest rates, which impact all aspects of the business

including increasing costs such as raw materials and wages, changes in customer

behaviour and credit risk, negotiations of contract terms and investment and

financing decisions.

• Climate change: The impact of ESG matters, specifically focused on the effect of

climate change, both from a qualitative and quantitative perspective, continue to

impact companies.

• Russian invasion of Ukraine and Russian sanctions: The Russian invasion of Ukraine,

and the imposition of international sanctions, continue to have a pervasive economic

impact globally where businesses engage in economic activities that might be

affected by the recent developments.

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 the revision and future years if the

revision affects both current and future years.

Critical judgements

(i) Determination of cash-generating units (CGUs)

A CGU is the smallest group of assets that generates cash inflows that are largely

independent of the cash inflows from other assets or groups of assets. Impairment

testing requires management to determine the net discounted cash flows expected

to arise from a CGU. Management has determined that the Group’s CGUs align with

the operating reportable segments, or divisions, being Liquids, Unit Dosing, Powders,

Aerosols and Asia Pacific. In the case of the first four divisions, segmentation is based

on product technologies. For Asia Pacific, segmentation is based on location of both

operations and the market served. The judgement applied in determining the Group’s

CGUs concerns the level at which cash flows arise independently from other areas of

the business. Whilst each division is made up of a number of operational sites based in

different locations, sites within a division act as a network to create a product offering

for all customers of that division. Therefore, cash flows arising at any particular site

within a division have a level of dependence upon other assets within the division as

a whole. Furthermore, divisional leadership teams develop strategies for the division

as a whole and are accountable to deliver them, including driving best practices and

performance across the whole division and developing new products at a divisional level

based on specialist product format knowledge. Sales and marketing teams also operate

at a divisional level.

Key sources of estimation uncertainty

(i) Impairment of goodwill, other intangible assets andpr(i) Impairment of goodwill, other intangible assets and property, plant

andequipmentand equipment

Impairment testing requires management to estimate therece the recoverable amount of an asset or

group of assets. Therecsets. The recoverable amount represents the higher of value-in-use and fair value

less costs of disposal. Where the recoverable amount is lower than the carrying amount, an

impairment charge is recognised in profit and loss in the year in which the impairment is

identified.

Value-in-use represents the net present value of the net cash flows expected to arise from

an asset or group of assets and its calculation requires management to estimate those cash

flows and to apply a suitable discount rate tothem.ate to them.

Cash flows are estimated by applying assumptions to budgeted sales, production costs and

overheads over a five-year forecast period and by applying a perpetuity growth rate to the

forecast cash flow in the third year.

Forecasts are reviewed and approved bytheBoarved by the Board.

Cash flows are discounted using a discount rate that reflects current market assessments of

the time value of money. The discount rate used in each CGU is adjusted for risks specific to

the asset or group of assets. The weighted average cost of capital is affected by estimates

of interest rates, equity returns and market and country-related risks.

Carrying values of goodwill, other intangible assets and property, plant and equipment are

subject to a significant risk of material adjustment due to potential changes in assumptions

in the next twelve months. Sensitivity analysis has been performed in order to assess the

extent to which carrying values of such assets are at risk of impairment.

During the year, impairment charges of £nil were recognised (2022: £0.8m).

At30June20At 30 June 2023, the carrying amount of goodwill, other intangible assets and property,

plant and equipment was £144.0million (2022: £149.9m). 0 million (2022: £149.9m).

Details of the assumptions applied and the sensitivity of the carrying amount of goodwill in

relation to the business are presented in note 12.

(ii) Pensions and other post-employment benefits

Under IAS 19, ‘Employee benefits’, the cost of defined benefit schemes is determined based

on actuarial valuations that are carried out annually at the balance sheet date. Actuarial

valuations are dependent on assumptions about the future that are made by the Directors

on the advice of independent qualified actuaries. If actual experience differs from these

assumptions, there could beamaterial change in the amounts re could be a material change in the amounts recognised by the Group in

respect of defined benefit schemes in the next financial year.

At 30 June 2023, the present value of defined benefit obligations in relation to the UK

scheme was £98.1million (2022: £116.6m). It was calculat1 million (2022: £116.6m). It was calculated using a number of assumptions,

including future Consumer Price Index rate changes, increases to pension benefits and

mortality rates. The present value of the benefit obligation is calculated by discounting

the benefit obligation using market yields on high-quality corporate bonds at the balance

sheetdatesheet date .

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

173 McBride plc Annual Report and Accounts 2023

The Group believes it has made adequate provision for the liabilities likely to arise from

years which are open and not yet agreed by tax authorities. The ultimate liability for

such matters may vary from the amounts provided however and is dependent upon the

outcome of agreements with relevant tax authorities, dispute resolution processes in the

relevant jurisdictions or litigation where appropriate.

The Group has tax losses and other deductible temporary differences that have the

potential to reduce future tax liabilities. Deferred tax assets are recognised to the extent

that recovery is probable against the future reversal of taxable temporary differences

and projected taxable income. At 30 June 2023, the Group recognised deferred tax

assets of £41.6million (2022: £29.7m), including £29.3million (2022: £22.1.6 million (2022: £29.7m), including £29.3 million (2022: £22.0m) in respect

of tax losses. Deferred tax assets amounting to £7.5million (2022: £8.3m) w.5 million (2022: £8.3m) were not

recognised in respect of tax losses and tax credits carried forward. The profit projections

used to estimate deferred tax asset recoverability are the same as those used to assess

the carrying value of goodwill and the estimate is therefore sensitive to the same factors

as those set out in note 12. Management estimates that a reduction in the perpetual

growth rate to 0.0% would not result in an impairment of the deferred tax asset.

Alternative performance measures

Introduction

The performance of the Group is assessed using a variety of adjusted measures that are

not defined under IFRS and are therefore termed non-GAAP measures. The non-GAAP

measures used are adjusted operating profit, adjusted EBITDA, adjusted finance costs,

adjusted profit before tax, adjusted profit for the year, adjusted EPS, free cash flow and

cash conversion %, adjusted ROCE, liquidity and net debt. The rationale for using these

measures, along with a reconciliation fromthe neareconciliation from the nearest measures prepared in accordance

with IFRS, are presented below.The alternativ. The alternative performance measures we use may not

be directly comparable with similarly titled measures used by otherces used by other companies.

Adjusted measures

Adjusted measures exclude specific items that are considered to hinder comparison

of the trading performance of the Group’s businesses either year on year or with other

businesses. This presentation is consistent with the way that financial performance

is measured by management and reported to the Board and Executive Committee

and is used for internal performance analysis and in relation to employee incentive

arrangements. The Directors present these measures in the financial statements in order

to assist investors in their assessment of the trading performance of the Group. Directors

do not regard these measures as a substitute for, or superior to, the equivalent measures

calculated and presented in accordance with IFRS.

2. Accounting policies continued

Critical accounting judgements and key sources ofestimation

uncertaintycontinued

Key sources of estimation uncertainty continued

(ii) Pensions and other post-employment benefits continued

At 30 June 2023, the fair value of the scheme assets of the UK scheme was £73.4million 3.4 million

(2022: £102.2m). Thescheme assets consist larhe scheme assets consist largely of securities and managed funds

whose values are subject to fluctuation in response to changes in market conditions.

Aportion of unquoted inA portion of unquoted investments have valuations which precede the reporting date and

where the valuations have been adjusted for cash movements between the last valuation

date and 30June2023, using the vdate and 30 June 2023, using the valuation approach and inputs as at the last valuation

date. Changes in the actuarial assumptions underlying the benefit obligation, changes in

the discount rate applicable to the benefit obligation and effects of differences between

the expected and actual return on the scheme’s assets are classified as actuarial gains

and losses and are recognised in other comprehensive income. During 2023, the Group

recognised a net actuarial loss of £14.1million (2022: gain of£12.4m).1 million (2022: gain of £12.4m).

An analysis of the assumptions that will be used by the Directors to determine the cost of

the defined benefit scheme that will be recognised in profit or loss in the next financial year

and the sensitivity of the benefit obligation to key assumptions is presented in note 22.

(iii) Taxation

Judgements and estimates are required in order to determine the appropriate amount

of tax provided for issues under dispute with taxation authorities and for tax matters

which are considered uncertain and on which it is probable that a future tax liability will

arise. The amount provided is management’s best estimate of the tax liability taking into

consideration external advice, known outcomes on similar tax treatments and experience

of tax authority custom and practice.

At 30 June 2023, the Group estimated its maximum possible tax exposure for ongoing

tax audits and uncertain tax treatments to be £15.9million, of which £1.6million is eatments to be £15.9 million, of which £1.6 million is

provided against in current tax.

The Group operates across a number of jurisdictions and tax risk can arise in relation to

the pricing of cross-border transactions, where a taxation authority’s interpretation of

the arm’s length principle can diverge from the approach taken by the Group. Transfer

pricing is inherently subjective and in determining the appropriate level of provision,

the Group considers the probability of a range of outcomes, using a weighted average

methodology to focus risk on the most likely outcomes in the event of an audit. The

amount provided also takes account of international dispute resolution mechanisms,

where available, to mitigate double taxation. This analysis is reassessed at each year end

and the estimates refined as additional information becomes available.

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

174 McBride plc Annual Report and Accounts 2023

Adjusted EPS is based on the Group’s profit for the year adjusted for the items excluded

from operating profit in arriving at adjusted operating profit and the tax relating to those

items (note 9).

Free cash flow and cash conversion %

Free cash flow is one of the Group’s KPIs by which our financial performance is measured.

It is primarily a liquidity measure. However, we also believe that free cash flow and cash

conversion % are important indicators of our overall operational performance as they

reflect the cash we generate from operations. Free cash flow is defined as cash generated

from continuing operations before exceptional items. Cash conversion % is defined as

free cash flow as a percentage of adjusted EBITDA (applicable only when adjusted EBITA

is positive). A reconciliation from net cash generated from operating activities, the most

directly comparable IFRS measure, to free cash flow, is set out as follows.

2023

£m

2022

£m

Net cash generated from/(used in) operating activities 11.1 (32.0)

Add back:

Taxation paid 1.8 0.1

Interest paid 11.4 3.3

Refinancing costs paid 12.3 1.8

Cash outflow in respect of exceptional items 1.4 4.1

Free cash flow 38.0 (22.7)

Adjusted EBITDA 34.1 (3.6)

Cash conversion % 111% n/a

2. Accounting policies continued

Alternative performance measurescontinued

Adjusted measurescontinued

During the years under review, the items excluded from operating profit in arriving at

adjusted operating profit were the amortisation of intangible assets and exceptional

items. Exceptional items and amortisation are excluded from adjusted operating profit

because they are not considered to be representative of the trading performance of

the Group’s businesses during the year. Adjusted EBITDA means adjusted operating

profit before depreciation. A reconciliation between adjusted operating profit, adjusted

EBITDA and the Group’s reported statutory operating profit is shown below.

2023

£m

2022

£m

Operating profit/(loss) 10.3 (27.1)

Add back: operating loss from discontinued operations — 0.4

Operating profit/(loss) from continuing operations 10.3 (26.7)

Exceptional items in operating profit/(loss) (note 4) 0.8 (0.4)

Amortisation of intangibles (note 13) 2.4 2.6

Adjusted operating profit/(loss) from continuing

operations 13.5 (24.5)

Depreciation of property, plant and equipment (note 14) 16.8 16.9

Depreciation of right-of-use assets (note 15) 3.8 4.0

Adjusted EBITDA 34.1 (3.6)

Adjusted profit/(loss) before tax is based on adjusted operating profit/(loss) less

adjusted finance costs. Adjusted profit/(loss) for the year is based on adjusted profit/

(loss) before tax less taxation. The table below reconciles adjusted profit/(loss) before

tax to the Group’s reported profit/(loss) before tax and adjusted profit/(loss) for the

year to the Group’s reported profit/(loss) for the year.

2023

£m

2022

£m

Loss before tax (15.1) (35.7)

Add back: loss before tax from discontinued operations — 0.4

Loss before tax from continuing operations (15.1) (35.3)

Exceptional items (note 4) 13.0 3.1

Amortisation of intangibles (note 13) 2.4 2.6

Adjusted profit/(loss) before tax from continuing

operations 0.3 (29.6)

Taxation (note 9) (0.3) 9.3

Adjusted loss for the year from continuing operations — (20.3)

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

175 McBride plc Annual Report and Accounts 2023

2. Accounting policies continued

Alternative performance measurescontinued

Adjusted return on capital employed (ROCE)

Adjusted ROCE serves as an indicator of how efficiently we generate returns from the

capital invested in the business. Itisa Group KPI that is dirs. It is a Group KPI that is directly relatable to the outcome

of investment decisions. Adjusted ROCE is defined as total adjusted operating profit

from continuing operations divided by the average year-end capital employed. Capital

employed is defined as the total of goodwill and other intangible assets, property, plant

and equipment, right-of-use assets, inventories, trade and other receivables less trade

and other payables. There is no equivalent statutory measure within IFRS. Adjusted

ROCE is calculated as follows:

2023

£m

2022

£m

2021

£m

Goodwill (note 12) 19.7 19.7 19.7

Other intangible assets (note 13) 6.5 7.3 8.2

Property, plant and equipment (note 14) 117. 8 122.9 129.8

Right-of-use assets (note 15) 8.5 11.3 10.0

Inventories (note 16) 121.5 118.9 92.9

Trade and other receivables (note 17) 145.7 145.4 117. 9

Trade and other payables (note 18) (219.6) (206.9) (169.2)

Capital employed 200.1 218.6 209.3

Average year-end capital employed 209.4 214.0 208.7

Adjusted operating profit/(loss) from

continuing operations 13.5 (24.5) 24.1

Adjusted ROCE % 6.4% (11.4)% 11.5%

Liquidity

Liquidity means, at any time, without double counting, the aggregate of:

(a) cash;

(b) cash equivalents;

RCF and other committed facilities; and

(d) the aggregate amount available for drawing under uncommitted facilities.

Notes to the consolidated financial statements continued

Year ended 30 June 2023

2023

£m

2022

£m

Cash and cash equivalents 1.6 4.5

RCF headroom 40.0 55.1

Other committed facilities headroom 17. 5 —

Uncommitted facilities 0.2 11.0

Liquidity 59.3 70.6

Net debt

Net debt consists of cash and cash equivalents, overdrafts, bank and other loans and

lease liabilities.

Net debt is a measure of the Group’s net indebtedness that provides an indicator of

overall balance sheet strength. It is a key indicator used by management to assess both

the Group’s cash position and its indebtedness. The use of the term ‘net debt’ does not

necessarily mean that the cash included in the net debt calculation is available to settle

the liabilities included in this measure.

Net debt is an alternative performance measure as it is not defined in IFRS. A

reconciliation from loans and other borrowings, lease liabilities and cash and cash

equivalents, the most directly comparable IFRS measures to net debt, is set out below:

2023

£m

2022

£m

Current assets

Cash and cash equivalents 1.6 4.5

Current liabilities

Borrowings (note 19) (49.3) (60.5)

Lease liabilities (note 15) (3.5) (3.9)

(52.8) (64.4)

Non-current liabilities

Borrowings (note 19) (109.8) (96.4)

Lease liabilities (note 15) (5.5) (8.1)

(115.3) (104.5)

Net debt (166.5) (164.4)

Financial statements

176 McBride plc Annual Report and Accounts 2023

3. Segment information

Background

Segmental reporting

Financial information is presented to the Board by product technology for the purposes of allocating resources within the Group and assessing the performance of the Group’s

businesses. There are five separately managed and accountable business divisions:

• Liquids;

• Unit Dosing;

• Powders;

• Aerosols; and

• Asia Pacific.

Intra-group revenue from the sale of products is agreed between the relevant customer-facing units and eliminated in the segmental presentation that is presented to the Board,

and therefore excluded from the below figures. Programme Compass is delivering an increased focus on cost optimisation and has meant that most overhead costs are now directly

attributed within the respective divisions’ income statements. The only costs now allocated out to the divisions are central overheads, with corporate costs being retained at a Group

level. Central overheads are allocated to a reportable segment proportionally using an appropriate cost driver. Corporate costs, which include the costs associated with the Board

and the Executive Leadership Team, governance and listed company costs and certain central functions (mostly associated with financial disciplines such as treasury), are reported

separately. Exceptional items are detailed in note 4 and are not allocated to the reportable segments as this reflects how they are reported to the Board. Finance expense and income

are not allocated to the reportable segments, asthe centreportable segments, as the central treasury function manages this activity, together with the overall net debt position of the Group.

The Board uses adjusted operating profit to measure the profitability of the Group’s businesses. Adjusted operating profit is, therefore, the measure of segment profit presented in the

Group’s segment disclosures. Adjusted operating profit represents operating profit before specific items that are considered to hinder comparison of the trading performance of the

Group’s businesses either year-on-year or with other businesses. During the years under review, the items excluded from operating profit in arriving at adjusted operating profit were

the amortisation of intangible assets and exceptional items.

Year ended 30 June 2023

Continuing operations

Liquids

£m

Unit

Dosing

£m

Powders

£m

Aerosols

£m

Asia

Pacific

£m

Corporate

£m

Group

£m

Segment revenue 497.9 234.2 85.9 46.2 24.8 — 889.0

Adjusted operating profit/(loss) 10.5 10.0 (0.7) 0.3 1.1 (7.7) 13.5

Amortisation of intangible assets (2.4)

Exceptional items (note 4) (0.8)

Operating profit 10.3

Finance costs (25.4)

Loss before taxation (15.1)

Inventories 59.4 33.8 15.8 9.6 2.9 — 121.5

Capital expenditure 5.9 4.9 1.7 0.4 0.3 — 13.2

Amortisation and depreciation 13.2 6.3 1.4 0.6 1.5 — 23.0

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

177 McBride plc Annual Report and Accounts 2023

3. Segment information continued

Background continued

Segmental reporting continued

Year ended 30 June 2022

Continuing operations

Liquids

£m

Unit

Dosing

£m

Powders

£m

Aerosols

£m

Asia

Pacific

£m

Corporate

£m

Group

£m

Segment revenue 383.9 171.5 68.6 31.9 22.4 — 678.3

Adjusted operating (loss)/profit (15.9) (0.8) (2.5) (1.5) 0.7 (4.5) (24.5)

Amortisation of intangible assets (2.6)

Exceptional items (note 4) 0.4

Operating loss (26.7)

Finance costs (8.6)

Loss before taxation (35.3)

Inventories 57.5 35.5 13.7 9.1 3.1 — 118.9

Capital expenditure 5.7 6.5 1.0 0.6 0.3 — 14.1

Amortisation and depreciation 13.7 6.5 1.4 0.5 1.4 — 23.5

Geographical information

Revenue from

external customers Non-current assets

2023

£m

2022

£m

2023

£m

2022

£m

United Kingdom 187.8 150.6 34.5 37.7

Germany 205.8 143.3 — —

France 188.0 140.3 9.1 9.2

Other Europe 278.5 217.8 104.1 108.0

Australia 0.4 8.5 — —

Other Asia Pacific 25.3 14.7 4.8 6.3

Rest of the World 3.2 3.1 — —

Total 889.0 678.3 152.5 161.2

The geographical revenue information above is based on the location of the customer.

Non-current assets for this purpose consists of goodwill, other intangible assets, property, plant and equipment and right-of-use assets.

Revenue by major customer

In 2023 and 2022, no individual customer provided more than 10% of the Group’s revenue.

During 2023, the top ten customers accounted for 53% of total Group revenue (2022:50%).22: 50%).

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

178 McBride plc Annual Report and Accounts 2023

4. Exceptional items

Analysis of exceptional items

2023

£m

2022

£m

Continuing operations

Reorganisation and restructuring costs/(gains):

UK Aerosols closure — 0.1

Factory footprint review — (1.4)

Review of strategy, organisation and operations — (0.4)

Logistics transformation programme — 0.7

— (1.0)

Environmental remediation 0.8 0.6

Total charged/(credited) to operating profit/(loss) 0.8 (0.4)

Group refinancing:

Independent business review and refinancing costs 12.2 3.5

Total charged to finance costs 12.2 3.5

Total continuing operations 13.0 3.1

Discontinued operations

Sale of PC Liquids business — 0.5

Other — (0.1)

Discontinued operations before tax — 0.4

Tax on discontinued operations — (0.1)

Total discontinued operations — 0.3

Total exceptional items before tax 13.0 3.5

Total exceptional items of £13.0million wer0 million were recorded during the year (2022: £3.5m).

The charge primarily comprises the following:

Items relating to continuing operations

Total exceptional items incurred in relation to the continuing business of £13.0million wer0 million were

recorded during the year (2022:£3.ear (2022: £3.1m). The charge comprises the following:

• £0.8million costs r.8 million costs relating to the re-evaluation of the environmental remediation

provision; and

• £12.2million char£12.2 million charged to finance costs in respect of the independent business review

and refinancing work completed in September 2022. The charge includes £1.5 million

reflecting the fair value of the liability in relation to fees payable to members of the

lender group upon exiting the existing RCF agreement. As reported in last year’s Annual

Report and Accounts, the amended RCF that McBride plc agreed with its lender group

on 29 September 2022 includes an ‘upside sharing’ mechanism whereby a fee will

become payable by the Group to members of the lender group upon the occurrence of

an ‘exit event’. Such a fee will be determined as the percentage of any increase in the

market capitalisation of the Group from 29 September 2022 to the date of the exit event.

This valuation has been performed on an embedded derivative basis using a conventional

Black-Scholes pricing model.

Items relating to discontinued operations

An exceptional charge of £nil was incurred in respect of discontinued operations during

the year (2022: £0.4m).

5. Employee information

The number of full-time equivalent persons employed by the Group (including Directors)

during the year, analysed by category, was as follows:

2023

Year end

Number

2023

Average

Number

2022

Year end

Number

2022

Average

Number

Manufacturing 2,333 2,287 2,327 2,365

Sales, general and

administration 608 596 594 592

Total 2,941 2,883 2,921 2,957

The number of persons employed during the financial year ended 30 June 2023 excludes

third-party contractors, agency workers and consultants used by the Group. Such workers

are not employees of the Group, as defined by section 411 of the Companies Act 2006,

and have therefore been excluded from the numbers disclosed above.

Aggregate payroll costs were as follows:

2023

£m

2022

£m

Wages and salaries 118.9 105.0

Social security costs 19.0 17.8

Share awards granted to Directors and employees 0.5 —

Other pension costs 3.6 3.4

Total 142.0 126.2

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

179 McBride plc Annual Report and Accounts 2023

5. Employee information continued

Pension costs comprise the payments made by the Group to defined contribution

schemes and the service and administration costs on defined benefit schemes (net of

employee contributions). See note 22.

Aggregate emoluments of the Directors of the Company were as follows:

2023

£’000

2022

£’000

Wages and salaries 1,889 1,183

Share awards granted to Directors 169 28

Other pension costs

(1)

58 56

Total 2,116 1,267

(1) The pension figure represents the value of the Company’s contribution to the individual’s pension scheme

and/or the cash value of payments in lieu of pension contribution.

Further information on Directors’ emoluments included above is in the Annual Report on

Remuneration on pages 131 to 145.

Aggregate compensation for key management, being the Directors and members of the

Executive Committee, is shown in note 28.

6. Auditors’ remuneration

Fees payable by the Group to the Company’s independent auditors,

PricewaterhouseCoopers LLP (PwC), and its associates, were as follows:

2023

£m

2022

£m

Audit fees:

Audit of the Company’s financial statements 0.1 0.1

Other services:

Audit of the financial statements of the Company’s

subsidiaries 1.2 1.0

Total fees 1.3 1.1

Fees for the audit of the Company’s financial statements represent fees payable to PwC

in respect of the audit of the Company’s individual financial statements and the Group’s

consolidated financial statements. Non-audit fees payable to PwC in relation to other

non-audit assurance services amounted to £2,000 (2022: £2,000).

Notes to the consolidated financial statements continued

Year ended 30 June 2023

7. Operating profit/(loss)

Operating profit/(loss) is stated after charging/(crediting):

2023

£m

2022

£m

Cost of inventories (included in cost of sales) 573.2 441.8

Employee costs (note 5) 142.0 126.2

Amortisation of intangible assets (note 13) 2.4 2.6

Depreciation of property, plant and equipment (note 14) 16.8 16.9

Depreciation of right-of-use assets (note 15) 3.8 4.0

Impairment:

Property, plant and equipment (note 14) — 0.8

Inventories (note 16) 3.0 3.9

Trade receivables (note 17) 2.6 2.0

Expense relating to short-term leases (note 15) 0.3 0.3

Expense relating to low-value leases (note 15) 0.1 0.2

Research and development costs not capitalised 7.3 6.8

Net foreign exchange loss 0.4 0.3

*Direct material costs only

8. Finance costs

2023

£m

2022

£m

Finance costs

Interest on bank loans and overdrafts 11.1 2.7

Interest on lease liabilities (note 15) 0.3 0.4

Net foreign exchange (gain)/loss (0.2) 0.4

Amortisation of facility fees 0.5 0.5

Non-utilisation and other fees 1.0 0.6

12.7 4.6

Post-employment benefits:

Net interest cost on defined benefit obligation (note 22) 0.5 0.5

Adjusted finance costs 13.2 5.1

Costs associated with independent business review and

refinancing (note4)ng (note 4) 12.2 3.5

Total finance costs 25.4 8.6

Interest rate swaps are used to manage the interest rate profile of the Group’s borrowings.

Accordingly, net interest payable or receivable on interest rate swaps is included in

financecosfinance costs .

Financial statements

180 McBride plc Annual Report and Accounts 2023

9. Taxation

Income tax expense/(credit)

From continuing operations

2023 2022

£m

Overseas

£m

Total

£m

Overseas

£m

Total

£m

Current tax expense/(credit)

Current year — 5.0 5.0 — 3.2 3.2

Adjustment for prior years — (0.2) (0.2) (1.0) (0.9) (1.9)

— 4.8 4.8 (1.0) 2.3 1.3

Deferred tax (credit)/expense

Origination and reversal of temporary differences (8.8) 0.9 (7.9) (7.9) (2.7) (10.6)

Adjustment for prior years (0.2) (0.3) (0.5) (6.4) 5.4 (1.0)

Impact of change in tax rate — — — (1.0) — (1.0)

(9.0) 0.6 (8.4) (15.3) 2.7 (12.6)

Income tax (credit)/expense (9.0) 5.4 (3.6) (16.3) 5.0 (11.3)

From discontinued operations

2023 2022

£m

Overseas

£m

Total

£m

Overseas

£m

Total

£m

Deferred tax credit

Origination and reversal of temporary differences — — — (0.1) — (0.1)

Income tax credit — — — (0.1) — (0.1)

Total attributable to ordinary shareholders

2023 2022

£m

Overseas

£m

Total

£m

Overseas

£m

Total

£m

Current tax expense/(credit)

Current year — 5.0 5.0 — 3.2 3.2

Adjustment for prior years — (0.2) (0.2) (1.0) (0.9) (1.9)

— 4.8 4.8 (1.0) 2.3 1.3

Deferred tax (credit)/expense

Origination and reversal of temporary differences (8.8) 0.9 (7.9) (8.0) (2.7) (10.7)

Adjustment for prior years (0.2) (0.3) (0.5) (6.4) 5.4 (1.0)

Impact of change in tax rate — — — (1.0) — (1.0)

(9.0) 0.6 (8.4) (15.4) 2.7 (12.7)

Income tax (credit)/expense (9.0) 5.4 (3.6) (16.4) 5.0 (11.4)

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

181 McBride plc Annual Report and Accounts 2023

9. Taxation continued

Income tax expense/(credit) continued

The current tax adjustment for the prior year was £nil (2022: £0.5m credit) and £0.4million (2022: £0.5m credit) and £0.4 million (2022: £0.4m) credit relating to the release of provisions for uncertain tax treatments due

to the expiry of statutes of limitation.

Transfer pricing is inherently subjective and in determining the appropriate level of provision, the Group considers the probability of a range of outcomes, using a weighted

average methodology to focus risk on the most likely outcomes inthe evely outcomes in the event of an audit. The amount provided also takes account of international dispute resolution mechanisms,

whereawhere available, to mitigate double taxation. This analysis is re-assessed at each year end and the estimates refined as additional information becomes available.

At 30 June 2023, the Group estimated its maximum possible tax exposure for ongoing tax audits and uncertain tax treatments to be £15.9million (2022: £16.2m), against which a tments to be £15.9 million (2022: £16.2m), against which a

provision of £1.6million (2022: £2.0m) has been made, in line with IFRIC 23 rvision of £1.6 million (2022: £2.0m) has been made, in line with IFRIC 23 requirements.

Reconciliation to UK statutory tax rate

The total tax charge on the Group’s (loss)/profit before tax for the year differs from the theoretical amount that would be charged at the UK standard rate of corporation tax for the

following reasons:

From continuing operations

2023

£m

2022

£m

Loss before tax (15.1) (35.3)

Loss before tax multiplied by the UK corporation tax rate of 20.50% (2022: 19.0%) (3.1) (6.7)

Effect of tax rates in foreign jurisdictions 1.1 (1.7)

Non-deductible expenses 0.4 0.6

Tax incentives/non-taxable income — (0.4)

Tax losses and other temporary differences for which no deferred tax recognised — 0.6

Change in tax rate (1.6) (1.0)

Other differences 0.3 0.2

Adjustment for prior years (0.7) (2.9)

Total tax credit in profit or loss (3.6) (11.3)

Exclude adjusting items (note 2) 3.9 2.0

Total tax charge/(credit) in profit or loss before adjusting items 0.3 (9.3)

Taxation is provided at current rates on the profits earned for the year.

From discontinued operations

2023

£m

2022

£m

Loss before tax — (0.4)

Loss before tax multiplied by the UK corporation tax rate of 20.50% (2022: 19.0%) — (0.1)

Total tax credit in profit or loss — (0.1)

Exclude adjusting items (note 2) — 0.1

Total tax credit in profit or loss before adjusting items — —

Taxation is provided at current rates on the profits earned for the year.

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

182 McBride plc Annual Report and Accounts 2023

9. Taxation continued

Reconciliation to UK statutory tax rate continued

Total attributable to ordinary shareholders

2023

£m

2022

£m

Loss before tax (15.1) (35.7)

Loss before tax multiplied by the UK corporation tax rate of 20.50% (2022: 19.0%) (3.1) (6.8)

Effect of tax rates in foreign jurisdictions 1.1 (1.7)

Non-deductible expenses 0.4 0.6

Tax incentives/non-taxable income — (0.4)

Tax losses and other temporary differences for which no deferred tax recognised — 0.6

Change in tax rate (1.6) (1.0)

Other differences 0.3 0.2

Adjustment for prior years (0.7) (2.9)

Total tax credit in profit or loss (3.6) (11.4)

Exclude adjusting items (note 2) 3.9 2.1

Total tax charge/(credit) in profit or loss before adjustingiteg items (0.3) (9.3)

The taxation is provided at current rates on the profits earned for the year.

The main rate of UK corporation tax applicable for the financial year is 20.50% (2022:19..50% (2022: 19.0%).

Factors affecting future tax charges

On 24 May 2021, the increase in the UK corporation tax rate from 19.0% to 25.0% with effect from 1 April 2023 was substantially enacted. A blended rate of 20.50% (a rate of 19% from

1July2022 to 31 Mar1 July 2022 to 31 March 2023 and a rate of 25% from 1 April 2023 to 30 June 2023) is the UK statutory tax rate for 2023. Deferred tax has been calculated for the UK at 25.0%, the rate

applicable from 1 April 2023.

On 20 June 2023, Finance (No.2) Act 2023 was substantively enacted in the UK, introducing a global minimum effective tax rate of 15%. The legislation implements a domestic top-up tax and

a multinational top-up tax, effective for accounting periods starting on or after 31 December 2023. On this basis, the first period of account where the Group will be affected will be from 2025

onwards. The Group is reviewing these draft rules to understand any potential impacts.

The Group has applied the exception under the proposed IAS 12 amendment to recognising and disclosing information about deferred tax assets and liabilities related to top-up income taxes.

Tax on items recognised in other comprehensive income

2023

£m

2022

£m

Items that may be reclassified to profit or loss:

Cash flow hedges in the year 0.4 0.5

Net actuarial gain/(loss) on post-employment benefits:

Deferred tax (3.5) 3.1

Total tax charged/(credited) in other comprehensive income (3.1) 3.6

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

183 McBride plc Annual Report and Accounts 2023

9. Taxation continued

Deferred tax

The movement in the net deferred tax balances during the year was:

Accelerated

capital

allowance

£m

Intangible

assets

£m

Share-

based

payments

£m

Tax

losses

£m

Retirement

benefit

obligations

£m

Other

£m

Total

£m

At 1 July 2021 (2.1) (3.4) 0.3 8.9 7.9 4.5 16.1

(Charge)/credit to profit or loss (2.9) 0.2 0.1 12.8 (0.9) 2.4 11.7

Charge to other comprehensive income — — — — (3.1) (0.5) (3.6)

Charge to equity — — (0.3) — — — (0.3)

Effect of the change in tax rate 0.4 — — 0.3 — 0.2 0.9

Exchange/other movements — — — — — 0.2 0.2

At 30 June 2022 (4.6) (3.2) 0.1 22.0 3.9 6.8 25.0

(Charge)/credit to profit or loss (0.7) 0.4 0.1 7.2 (0.9) 2.3 8.4

Charge to other comprehensive income — — — — 3.5 (0.4) 3.1

Charge to equity — — — — — — —

Effect of the change in tax rate — — — — — — —

Exchange/other movements 0.1 (0.2) — 0.1 — — —

At 30 June 2023 (5.2) (3.0) 0.2 29.3 6.5 8.7 36.5

Deferred tax assets and liabilities are presented in the Group’s balance sheet as follows:

2023

£m

2022

£m

Deferred tax assets 41.6 29.7

Deferred tax liabilities (5.1) (4.7)

Total 36.5 25.0

Deferred income tax assets are recognised for deductible temporary differences to the extent that the realisation of the related tax benefit through future taxable profits is probable.

The deferred tax asset represents mainly UK deductible temporary differences which are not subject to time expiry. While further tax losses have arisen in the UK in the current financial year,

due to a rise in input costs absorbed through the year coupled with negotiation lags in the acceptance of our new pricing levels, the Group’s three-year financial forecast indicates that these

temporary differences will start to reverse in the following financial year and are considered to be fully recoverable. Applying a downside sensitivity test in line with the Group’s impairment

model, we determined that the EBITDA would have to reduce by more than 15.7% to result in an impairment of the deferred tax asset. The reason for the expected improvement in performance

is due to the higher pricing levels agreed with customers which have allowed us to recover the exceptional input cost inflation. There is no significant risk of material adjustment to the carrying

amount of the deferred tax asset within the next twelvemonths.elve months.

To the extent that dividends remitted from overseas affiliates are expected to result in additional taxes, these amounts have been provided for. No deferred tax is recognised in respect of timing

differences associated with the unremitted earnings of overseas subsidiaries as these are considered permanently employed in the business of these companies. Unremitted earnings may be

liable to overseas taxes and/or UK taxation (after allowing for double tax relief) if distributedas dividends. T) if distributed as dividends. Theaggregathe aggregate amount of temporary differences associated with investments in

subsidiaries and associates for which deferred tax liabilities have not been recognised totalled approximately £0.7million at 30June 2023 (2022: £07 million at 30 June 2023 (2022: £0.8m).

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

184 McBride plc Annual Report and Accounts 2023

Adjusted loss per share measures are calculated based on loss for the year attributable

to owners of the Company before adjusting items as follows:

From continuing operations Reference

2023

£m

2022

£m

Loss for calculating basic and diluted loss

per share c (11.5) (24.0)

Adjusted for:

Amortisation of intangible assets (note 13) 2.4 2.6

Exceptional items (note 4) 13.0 3.1

Taxation relating to the above items (3.9) (2.0)

Loss for calculating adjusted loss per share d — (20.3)

Reference

2023

pence

2022

pence

Basic loss per share c/a (6.6) (13.8)

Diluted loss per share c/b

(1)

(6.6) (13.8)

Adjusted basic loss per share d/a 0.0 (11.7)

Adjusted diluted loss per share d/b

(1)

0.0 (11.7)

(1) Diluted loss per share is considered equal to the basic loss per share as potentially dilutive ordinary shares

cause a decrease in the losspersharcause a decrease in the loss per share.

From discontinued operations Reference

2023

£m

2022

£m

Loss for calculating basic and diluted loss

per share e — (0.3)

Adjusted for:

Exceptional items (note 4) — 0.4

Taxation relating to the above items — (0.1)

Loss for calculating adjusted loss per share f — —

Reference

2023

pence

2022

pence

Basic loss per share e/a 0.0 (0.2)

Diluted loss per share e/b

(1)

0.0 (0.2)

Adjusted basic loss per share f/a 0.0 0.0

Adjusted diluted loss per share f/b

(1)

0.0 0.0

(1) Diluted loss per share is considered equal to the basic loss per share as potentially dilutive ordinary

shares cause a decrease in the lossps perser share.

9. Taxation continued

Unrecognised deferred tax assets

At 30 June 2023, the Group had unused tax losses of £118.4million (2023, the Group had unused tax losses of £118.4 million (2022: £93.9m) available

to offset against future profits. No deferred tax asset has been recognised in respect of

£2.0million (2022: £5.5m) of these los£2.0 million (2022: £5.5m) of these losses due to restrictions over accessing these losses in

the future. The majority of these tax losses arise in tax jurisdictions where they do not expire.

As at 30 June 2023, McBride plc had unused tax losses of £30.5m (2022: £18.0m) available to

offset against future profits. No deferred tax asset has been recognised in respect of £2.0m

(2022: £2.0m) of these losses due to restrictions over accessing these losses in the future.

No deferred tax asset has been recognised in relation to the surplus Advanced Corporation

Tax (ACT) of £7.0million (2022: £7.0 million (2022: £7.0m) due to uncertainty as to future ACT capacity and

taxable profits.

10. Loss per ordinary share

Basic loss per ordinary share is calculated by dividing the (loss)/profit for the

year attributable to owners of the Company by the weighted average number of

the Company’s ordinary shares in issue during the financial year. Theweight. The weighted

average number of the Company’s ordinary shares in issue excludes 623,968 shares

(2022:629,200 shar(2022: 629,200 shares), being the weighted average number of own shares held during

the year in relation to employee share schemes (note 23).

Reference 2023 2022

Weighted average number of ordinary

shares in issue (million) a 173.4 173.5

Effect of dilutive LTIP and RSU awards

(million) 2.5 1.0

Weighted average number of ordinary

shares for calculating diluted loss per share

(million) b 175.9 174. 5

Diluted loss per share is calculated by adjusting the weighted average number of

ordinary shares in issue assuming the conversion of all potentially dilutive ordinary

shares. Where potentially dilutive ordinary shares would cause an increase in earnings

per share, or a decrease in loss per share, the diluted loss per share is considered equal

to the basic loss per share.

During the year, the Company had equity-settled LTIP and RSU awards with a nil exercise

price that are potentially dilutive ordinary shares.

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

185 McBride plc Annual Report and Accounts 2023

Movements in the number of B Shares outstanding were as follows:

2023 2022

Number

000

Nominal

value

£’000

Number

000

Nominal

value

£’000

Issued and fully paid

At 1 July 665,888 666 747, 399 747

Redeemed — — (81,511) (81)

At 30 June 665,888 666 665,888 666

B Shares carry no rights to attend, speak or vote at Company meetings, except on a

resolution relating to the winding up of the Company.

12. Goodwill

£m

Cost

At 1 July 2021, 30 June 2022 and 30 June 2023 36.0

Accumulated impairment

At 1 July 2021 (16.3)

Currency translation differences —

30 June 2022 (16.3)

Currency translation differences —

At 30 June 2023 (16.3)

Net book value

At 30 June 2023 19.7

At 30 June 2022 19.7

The Liquids, Unit Dosing, Powders, Aerosols and Asia Pacific businesses have separate

management teams and leadership and represent the lowest level within the Group at

which goodwill is monitored for internal managementpurposes.ed for internal management purposes.

10. Loss per ordinary share continued

Total attributable to ordinary shareholders Reference

2023

£m

2022

£m

Loss for calculating basic and diluted loss

per share g (11.5) (24.3)

Adjusted for:

Amortisation of intangible assets (note 13) 2.4 2.6

Exceptional items (note 4) 13.0 3.5

Taxation relating to the above items (3.9) (2.1)

Loss for calculating adjusted loss per share h — (20.3)

Reference

2023

pence

2022

pence

Basic loss per share g/a (6.6) (14.0)

Diluted loss per share g/b

(1)

(6.6) (14.0)

Adjusted basic loss per share h/a 0.0 (11.7)

Adjusted diluted loss per share h/b

(1)

0.0 (11.7)

(1) Diluted loss per share is considered equal to the basic loss per share as potentially dilutive ordinary shares

cause a decrease in the losspersharcause a decrease in the loss per share.

11. Payments to shareholders

Dividends paid and received are included in the Company financial statements in the

year in which the related dividends are actually paid or received or, in respect of the

Company’s final dividend for the year, approved by shareholders.

Under the terms of the amended RCF announced on 29SeptUnder the terms of the amended RCF announced on 29 September 2022, the Company

may not, except with the consent of its lender group, declare, make or pay any dividend

or distribution to its shareholders prior to an ‘exit event’, being a change of control,

refinancing of the RCF in full, prepayment and cancellation of the RCF in full, or upon the

termination date of the RCF, being May 2026. Hence the Board is not recommending a

final dividend for the financial year ended 30June 2023.ear ended 30 June 2023.

No payments to ordinary shareholders were made or proposed in respect of this year or

the prior year.

Furthermore, under the RCF, the Company may not, except with the consent of its

lender group, redeem or repay any of its share capital prior to an exit event. Therefore,

as intimated in the announcement dated 3 October 2022, the redemption of B Shares

that would normally take place in November each year will not take place. B Shares

issued but not redeemed are classified as current liabilities.

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

186 McBride plc Annual Report and Accounts 2023

12. Goodwill continued

Carrying amount of goodwill allocated to CGUs:

2023

£m

2022

£m

Liquids 16.0 15.9

Unit Dosing 3.2 3.3

Powders 0.3 0.3

Asia Pacific 0.2 0.2

At 30 June 19.7 19.7

Impairment tests carried out during the year

Goodwill is tested for impairment annually at the level of the CGU to which it is allocated.

In each of the tests carried out during the current financial year, the recoverable amount

of the CGUs concerned was measured on a value-in-use basis.

Value-in-use represents the present value of the future cash flows that are expected

to be generated by the CGU to which the goodwill is allocated. Management based

its cash flow estimates on the Group’s Board-approved budget for 2024. Cash flows

in the following two years were forecast by applying assumptions to budgeted sales,

production costs and overheads. Aggregate cash flows beyond the third year were

estimated by applying a perpetuity growth rate to the forecast cash flow in the third

year that was based on long-term growth rates for the CGU’s products in its end

markets.

Management estimates sales growth for each CGU based on forecasts of the future

volume of the end markets for the CGU’s products. CGUs to which significant goodwill

isallocated supply the Liquids and Unit Dosing markis allocated supply the Liquids and Unit Dosing markets in Europe.

Management estimates the cost of material inputs and other direct and indirect costs

based on current prices and market expectations of future price changes. Beyond the

budget year, unless there are reasons to suggest otherwise, management assumes that

future changes in material input prices are reflected in the price of the Group’s products.

General cost inflation is based on management’s expectations of cost increases in

thebusiness.the business.

Notes to the consolidated financial statements continued

Year ended 30 June 2023

In order to forecast growth beyond the detailed cash flows into perpetuity, long-term

average growth rates of 1.6% (2022: 1.5%) in Liquids and 1.9% (2022: 2.0%) in Unit Dosing

have been applied. These rates are based on a weighted average of country-specific

rates that are not greater than the published International Monetary Fund average

growth rates in gross domestic product in the territories in which the CGUsoperatGUs operate.

Discount rates applied to the cash flow projections were determined using a capital

asset pricing model and reflected current market interest rates, relevant equity and size

risk premiums and the risks specific to the CGU concerned. Pre-tax discount rates used

in calculating the value-in-use of CGUs in the current year were 14.2% for Liquids (2022:

10.8%) and 10.5% for Unit Dosing (2022: 8.8%).

Sensitivity analysis

A sensitivity analysis has been performed, focusing on the change required in long-term

average growth rates, discount rates and forecast revenue and margin assumptions that

would give rise to an impairment.

In the case of the Liquids CGU, sensitivities that result in the recoverable amount

equalling the carrying value were:

• a decrease in long-term average growth rates to a negative growth rate of (8.4)%;

• an increase in pre-tax discount rates of 22.2ppts;

• a reduction in forecast revenue of 7.4%; and

• a reduction in forecast margins of 1.8ppts.

In the case of the Unit Dosing CGU, sensitivities that result in the recoverable amount

equalling the carrying value were:

• a decrease in long-term average growth rates to a negative growth rate of (15.8)%;

• an increase in pre-tax discount rates of 24.3ppts;

• a reduction in forecast revenue of 15.5%; and

• a reduction in forecast margins of 3.9ppts.

Based on the impairment reviews performed, no impairment has been identified .

Financial statements

187 McBride plc Annual Report and Accounts 2023

13. Other intangible assets

Patents,

brands and

trademarks

£m

Computer

software

£m

Customer

relationships

£m

Other

£m

Total

£m

Cost

At 1 July 2021 3.7 14.0 11.9 0.7 30.3

Additions — 0.8 — 0.9 1.7

Disposals — (2.6) — (0.2) (2.8)

At 30 June 2022 3.7 12.2 11.9 1.4 29.2

Additions — 1.7 — — 1.7

Disposals — — — (0.1) (0.1)

Transfers — 0.4 — (0.4) —

At 30 June 2023 3.7 14.3 11.9 0.9 30.8

Accumulated amortisation and impairment

At 1 July 2021 (3.4) (7.8) (10.3) (0.6) (22.1)

Disposals — 2.6 — 0.2 2.8

Charge for the year (0.3) (1.7) (0.5) (0.1) (2.6)

At 30 June 2022 (3.7) (6.9) (10.8) (0.5) (21.9)

Charge for the year — (1.8) (0.5) (0.1) (2.4)

At 30 June 2023 (3.7) (8.7) (11.3) (0.6) (24.3)

Net book value

At 30 June 2023 — 5.6 0.6 0.3 6.5

At 30 June 2022 — 5.3 1.1 0.9 7.3

Customer relationships acquired upon the acquisition of McBride Denmark A/S have a carrying value of £0.6million and a ralue of £0.6 million and a remaining amortisation period of 2.25 years. In addition,

abrand name wa brand name was also acquired on acquisition of McBride Denmark A/S that has a carrying value of £nil with no remaining amortisation period.

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

188 McBride plc Annual Report and Accounts 2023

14. Property, plant and equipment

Land and

buildings

£m

Plant and

equipment

£m

Assets in

the course of

construction

£m

Total

£m

Cost

At 1 July 2021 69.9 357.9 7.4 435.2

Additions 1.0 10.7 0.7 12.4

Disposals (3.4) (102.8) (0.1) (106.3)

Transfers — 2.0 (2.0) —

Currency translation differences (0.2) (0.5) — (0.7)

At 30 June 2022 67.3 267.3 6.0 340.6

Additions 0.4 6.9 4.2 11.5

Disposals (0.9) (10.3) — (11.2)

Transfers 0.3 — (0.3) —

Currency translation differences 0.4 0.5 0.1 1.0

At 30 June 2023 67.5 264.4 10.0 341.9

Accumulated depreciation and impairment

At 1 July 2021 (31.2) (274.2) — (305.4)

Charge for the year (2.0) (14.9) — (16.9)

Disposals 2.8 102.1 — 104.9

Impairment — (0.8) — (0.8)

Currency translation differences — 0.5 — 0.5

At 30 June 2022 (30.4) (187.3) — (217.7)

Charge for the year (2.0) (14.8) — (16.8)

Disposals 0.6 10.4 — 11.0

Currency translation differences — (0.6) — (0.6)

At 30 June 2023 (31.8) (192.3) — (224.1)

Net book value

At 30 June 2023 35.7 72.1 10.0 117.8

At 30 June 2022 36.9 80.0 6.0 122.9

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

189 McBride plc Annual Report and Accounts 2023

15. Leases

Most of the Group’s leases are associated with leased properties. The Group also leases a small proportion of its plant and machinery, for example, forklift trucks and vehicles.

The movements in the right-of-use assets were as follows:

Land and

buildings

£m

Plant and

machinery

£m

Vehicles

£m

Other

£m

Total

£m

Right-of-use assets

Net book value at 1 July 2021 4.3 2.7 1.9 1.1 10.0

New leases recognised 0.2 4.0 0.9 — 5.1

Currency translation differences (0.3) 0.5 — — 0.2

Depreciation (1.3) (1.3) (1.2) (0.2) (4.0)

Net book value at 30 June 2022 2.9 5.9 1.6 0.9 11.3

New leases recognised 0.2 0.2 0.8 — 1.2

Currency translation differences (0.2) — — — (0.2)

Depreciation (1.1) (1.4) (1.0) (0.3) (3.8)

Net book value at 30 June 2023 1.8 4.7 1.4 0.6 8.5

The movements in the lease liabilities were as follows:

Total

£m

Lease liabilities

Net book value at 1 July 2021 11.3

New leases recognised 5.1

Lease payments (5.0)

Currency translation differences 0.2

Finance costs (note 8) 0.4

Net book value at 30 June 2022 12.0

New leases recognised 1.2

Lease payments (4.3)

Currency translation differences (0.2)

Finance costs (note 8) 0.3

Net book value at 30 June 2023 9.0

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

190 McBride plc Annual Report and Accounts 2023

15. Leases continued

2023

£m

2022

£m

Analysed as:

Amounts falling due within twelve months 3.5 3.9

Amounts falling due after one year 5.5 8.1

9.0 12.0

Note 20 presents a maturity analysis of the payments due over the remaining lease term for those liabilities currently recognised on the balance sheet. This analysis only includes

payments to be made over the reasonably certain lease term. Cash outflows may exceed these amounts as payments may be made in optional periods that are not currently

considered to be reasonably certain and, in respect of leases, entered into in future periods.

For the year ended 30 June 2023, expenses for short-term and low-value leases were incurred as follows:

2023

£m

2022

£m

Expenses relating to short-term leases 0.3 0.3

Expenses relating to leases of low-value assets not shown as short-term leases above 0.1 0.2

Total 0.4 0.5

At 30 June 2023 the Group was committed to future minimum lease payments of £2.1million (2022: £1.5m) in r1 million (2022: £1.5m) in respect of leases which have not yet commenced and for which no lease

liability has been recognised.

16. Inventories

2023

£m

2022

£m

Raw materials, packaging and consumables 62.7 61.7

Finished goods and goods for resale 58.8 57.2

Total 121.5 118.9

Inventories are stated net of an allowance of £5.5million (2022: £5.6m) in rwance of £5.5 million (2022: £5.6m) in respect of excess, obsolete or slow-moving items. Movements in the allowance were as follows:

2023

£m

2022

(restated)

£m

At 1 July (5.6) (4.1)

Utilisation 3.1 2.4

Charged to profit or loss (3.0) (3.9)

At 30 June (5.5) (5.6)

The cost of inventories recognised in cost of sales as an expense amounted to £623.6million (2022 (red to £623.6 million (2022 (restated): £486.0m).

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

191 McBride plc Annual Report and Accounts 2023

17. Trade and other receivables

2023

£m

2022

£m

Trade receivables 132.1 130.3

Less: provision for impairment of trade receivables (4.3) (2.2)

Trade receivables – net 127.8 128.1

Other receivables 11.9 14.4

Prepayments and accrued income 6.0 2.9

Total 145.7 145.4

Trade receivables amounting to £49.0million (2022: £53.0 million (2022: £53.7m) are secured under the invoice discounting facilities described in note 20.

Other receivables primarily consist of supplier rebates and recoverable VAT.

Trade terms are a maximum of 135 days of credit.

Due to their short-term nature, the fair value of trade and other receivables does not differ from the book value.

The impairment of trade receivables charged to the income statement was £3.5million (20tatement was £3.5 million (2022: £2.0m). There are no impairments of any receivables other than trade receivables.

Trade receivables are regularly reviewed for bad and doubtful debts. Bad debts are written off and an allowance is established based on the expected credit loss model. The expected

loss rates are based on payment profiles of sales over a period of three years before 30 June 2023 or 30 June 2022, respectively, and the corresponding historical credit losses

experienced within this period adjusted for forward-looking factors specific to the debtors and the economic environment.

On that basis, the credit loss allowance as at 30 June 2023 and 30 June 2022 was determined as follows:

30 June 2023 Current

More than

30 days

past due

More than

60 days

past due

More than

90 days

past due

More than

180 days

past due Total

Expected loss rate 0.5% 0.4% 0.2% 0.6% 4.5% —

Gross carrying amount (£m) 123.1 1.4 0.3 1.6 5.7 132.1

Credit loss allowance (£m) 0.7 — — — 0.3 1.0

30 June 2022 Current

More than

30 days

past due

More than

60 days

past due

More than

90 days

past due

More than

180 days

past due Total

Expected loss rate — 0.1% 1.0% 0.8% 10.6% —

Gross carrying amount (£m) 119.8 6.7 0.8 1.3 1.7 130.3

Credit loss allowance (£m) — — — — 0.2 0.2

In addition to the credit loss allowance, the provision for impairment of trade receivables includes £3.3million (2022: £2.0m) of credit notables includes £3.3 million (2022: £2.0m) of credit note provisions.

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

192 McBride plc Annual Report and Accounts 2023

17. Trade and other receivables continued

Movements in the allowance for doubtful debts were as follows:

2023

£m

2022

£m

At 1 July (2.2) (0.9)

Utilisation 0.5 0.7

Charged (2.6) (2.0)

At 30 June (4.3) (2.2)

Trade receivables are written off where there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the

failure of a debtor to engage in a repayment plan with the Group, or a failure to make contractual payments for a period greater than 365 days past due. Impairment losses on trade

receivables are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited against the same line item.

The carrying amounts of trade receivables are denominated in the following currencies:

2023

£m

2022

£m

Sterling 18.6 25.5

Euro 94.9 86.4

Polish Zloty 2.6 1.8

Danish Krone 11.5 10.4

Malaysian Ringgit 2.7 4.1

Other 1.8 2.1

132.1 130.3

Trade receivables are generally not interest bearing.

18. Trade and other payables

2023

£m

2022

£m

Current liabilities

Trade payables 162.7 160.4

Taxation and social security 4.1 3.5

Other payables 24.0 26.7

Accrued expenses 26.5 14.6

Deferred income 1.6 1.0

B Shares (note 11) 0.7 0.7

Total 219.6 206.9

Trade payables are generally not interest bearing. The Directors consider the carrying amount of trade and other payables to approximate their fair values.

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

193 McBride plc Annual Report and Accounts 2023

19. Borrowings

Borrowings may be analysed as follows:

2023 2022

Current

liabilities

£m

Non-current

liabilities

£m

Total

liabilities

£m

Current

liabilities

£m

Non-current

liabilities

£m

Total

liabilities

£m

Overdrafts 0.6 — 0.6 6.8 — 6.8

Bank and other loans:

Unsecured loans — 109.8 109.8 — 96.4 96.4

Invoice discounting facilities (note 20) 48.7 — 48.7 53.7 — 53.7

48.7 109.8 158.5 53.7 96.4 150.1

Lease liabilities 3.5 5.5 9.0 3.9 8.1 12.0

Total 52.8 115.3 168.1 64.4 104.5 168.9

Bank and other loans are repayable as follows:

2023

£m

2022

£m

Within one year 48.7 53.7

Between one and two years — —

Between two and five years 109.8 96.4

More than five years — —

Total 158.5 150.1

Details of the Group’s bank facilities are presented in note 20. Amounts payable under leases are presented in notes 15 and20esented in notes 15 and 20.

20. Financial risk management

Risk management policies

The Group’s Treasury function is responsible for procuring the Group’s capital resources and maintaining an efficient capital structure, together with managing the Group’s liquidity,

foreign exchange and interest rate exposures.

All treasury operations are conducted within strict policies and guidelines that are approved by the Board. Compliance with those policies and guidelines is monitored by the regular

reporting of treasury activities to the Board following regular Treasury Committee meetings.

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

194 McBride plc Annual Report and Accounts 2023

20. Financial risk management continued

Financial assets and financial liabilities

Amortised

cost

£m

Fair value

through

profit

or loss

(1)

£m

Total

carrying

amount

£m

Fair

value

£m

At 30 June 2023

Financial assets

Trade receivables 127. 8 — 127. 8 127.8

Other receivables 11.9 — 11.9 11.9

Cash and cash equivalents 1.6 — 1.6 1.6

141.3 — 141.3 141.3

Financial assets held at fair value

Derivative financial instruments (Level 2)

Forward currency contracts — 0.2 0.2 0.2

Interest rate swaps — 4.9 4.9 4.9

— 5.1 5.1 5.1

Total financial assets 141.3 5.1 146.4 146.4

Financial liabilities

Trade and other payables (203.6) — (203.6) (203.6)

Bank overdrafts (0.6) — (0.6) (0.6)

Lease liabilities (9.0) — (9.0) (9.0)

Bank and other loans (158.5) — (158.5) (158.5)

(371.7) — (371.7) (371.7)

Financial liabilities held at fair value

Derivative financial instruments (Level 2)

Forward currency contracts — — — —

Interest rate swaps — (0.3) (0.3) (0.3)

Upside sharing fee — (1.5) (1.5) (1.5)

(1.8) (1.8) (1.8)

Total financial liabilities (371.7) (1.8) (373.5) (373.5)

Total (230.4) 3.3 (227.1) (227.1)

(1) Financial assets and financial liabilities classified as fair value through profit or loss are designated in

hedge relationships as described within the interest risk and foreign exchange risk sections of this note .

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Amortised

cost

(restated)

(2)

£m

Fair value

through

profit

or loss

(1)

£m

Total

carrying

amount

(restated)

(2)

£m

Fair

value

(restated)

(2)

£m

At 30 June 2022

Financial assets

Trade receivables 128.1 — 128.1 128.1

Other receivables 14.4 — 14.4 14.4

Cash and cash equivalents 4.5 — 4.5 4.5

147.0 — 147.0 147.0

Financial assets held at fair value

Derivative financial instruments (Level 2)

Forward currency contracts — 0.4 0.4 0.4

Interest rate swaps — 2.1 2.1 2.1

— 2.5 2.5 2.5

Total financial assets 147.0 2.5 149.5 149.5

Financial liabilities

Trade and other payables

(2)

(188.6) — (188.6) (188.6)

Bank overdrafts (6.8) — (6.8) (6.8)

Lease liabilities (12.0) — (12.0) (12.0)

Bank and other loans (150.1) — (150.1) (150.1)

Total financial liabilities (357.5) — (357.5) (357.5)

Total (210.5) 2.5 (208.0) (208.0)

(1) Financial assets and financial liabilities classified as fair value through profit or loss are designated in

hedge relationships as described within the interest risk and foreign exchange risk sections of this note.

(2) Restated to include financial liabilities only.

In the tables above, the financial assets and financial liabilities held by the Group are

categorised according to the basis on which they are measured. Financial assets and

liabilities that are held at fair value are further categorised according to the degree to

which the principal inputs used in determining their fair value represent observable

market data as follows:

• Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities;

• Level 2 – inputs other than Level 1 that are observable for the asset or liability, either

directly (prices) or indirectly (derived from prices); and

• Level 3 – inputs that are not based on observable market data (unobservable inputs).

Financial statements

195 McBride plc Annual Report and Accounts 2023

20. Financial risk management continued

Financial assets and financial liabilities continued

Derivative financial instruments comprise the foreign currency derivatives and interest

rate derivatives that are held by the Group in designated hedging relationships, in addition

to the upside sharing fee payable to the lender group upon exit of the current RCF

arrangement.

Foreign currency forward contracts are measured by reference to prevailing forward

exchange rates. Foreign currency options are measured using a variant of the Monte Carlo

valuation model. Interest rate swaps and caps are measured by discounting the related

cash flows using yield curves derived from prevailing market interest rates.

The upside sharing fee has been identified as an embedded derivative. The amended RCF

that the Group agreed with its lender group on 29 September 2022 includes an upside

sharing mechanism whereby a fee will become payable by the Group to members of the

lender group upon the occurrence of an exit event. Such a fee will be determined as the

percentage of any increase in the market capitalisation of the Group from 29 September

2022 to the date of the exit event. A valuation has been performed using a conventional

Black-Scholes pricing model with an exit date of 31 May 2024, based on the assumption

that the Group will have agreed a new RCF arrangement at that time. Other key inputs to

the model include volatility at 60.0%, GBP interest rate at 5.00% and call option strike at

23.82 pence.

Cash and cash equivalents and bank and other loans largely attract floating interest rates.

Accordingly, management considers that their carrying amount approximates to fair value.

Lease obligations attract fixed interest rates that are implicit in the lease rentals and their

fair value has been assessed relative to prevailing market interest rates.

There were no transfers between levels during the year and no changes in valuation

techniques.

Credit risk

Credit risk is the risk that a counterparty will default on its contractual obligations

resulting in financial loss to the Group.

The Group has three types of financial assets that are subject to the expected credit

lossmodel:loss model:

• trade receivables;

• other receivables; and

• cash and cash equivalents.

Information regarding expected credit losses on trade receivables is disclosed in

note 17. While other receivables and cash and cash equivalents are also subject to the

impairment requirements of IFRS 9, the identified impairment loss was minimal. The

Group’s cash balances are managed such that there is no significant concentration of

credit risk in any one bank or other financial institution. Management regularly monitors

the credit quality of the institutions with which it holds deposits. Similar considerations

are given to the Group’s portfolio of derivative financial instruments.

Notes to the consolidated financial statements continued

Year ended 30 June 2023

The Group uses judgement to determine that the credit risk of financial assets has not

significantly changed since initial recognition and regularly monitors the value of the

instruments. As such, credit risk is not considered to be a significant factor in changes

to the values of financial assets. All of the financial derivatives are deemed to have low

credit risk on initial recognition as they are predominantly hedges of foreign exchange

risk and executed with a diverse and strong portfolio of counterparties.

Before accepting a new customer, management assesses the customer’s credit quality

and establishes a credit limit. Credit quality is assessed using data maintained by

reputable credit rating agencies, by the checking of references included in credit

applications and, where they are available, by reviewing the customer’s recent financial

statements. Credit limits are subject to multiple levels of authorisation and are reviewed

on a regular basis. Credit insurance is employed where it is considered to be cost

effective. At 30 June 2023, the majority of trade receivables were due from major

retailers in the UK and Europe.

At 30 June 2023, the Group’s maximum exposure to credit risk was as follows (there was

no significant concentration of credit risk):

2023

£m

2022

£m

Trade and other receivables:

Trade receivables 127. 8 128.1

Other receivables 11.9 14.4

139.7 142.5

Derivative financial instruments 5.1 2.5

Cash and cash equivalents 1.6 4.5

Total 146.4 149.5

Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the

obligations associated with its financial liabilities.

The Group’s borrowing facilities are monitored against forecast requirements and timely

action is taken to put in place, renew or replace credit lines.

Throughout the year the Group had a €175 million multi-currency, sustainability-linked

RCF. The facility was agr. The facility was agreed for a five-year tenor to May 2026, and is provided by a

syndicate of supportive international bank lenders.

Financial statements

196 McBride plc Annual Report and Accounts 2023

20. Financial risk management continued

Liquidity risk continued

On 29 September 2022, the Group announced that it had agreed an amended RCF

with its lender group maintaining the commitment date to May 2026, ensuring the

Group has sufficient levels of liquidity headroom and can comply with revised covenant

requirements. Key provisions ofthe rovisions of the revised agreement are:

• €175million sustainability-link€175 million sustainability-linked RCF confirmed to May 2026;

• the option to extend to 30 September 2027 and the €75million acember 2027 and the €75 million accordion feature

previously agreed have been removed;

• RCF shall be secured against material asset, share and inter-company balances;

• RCF commitments to reduce, and be cancelled, in the amount of the Euro equivalent

of £2.5million evof £2.5 million every three months from September 2024 up until the termination

date;

• existing bilateral overdraft facilities shall become ancillary facilities committed until

30September 20230 September 2024;

• invoice discounting facilities shall be committed to 30 September 2024;

• liquidity shall not be less than £15million when tesliquidity shall not be less than £15 million when tested on or prior to

30September20230 September 2024;

• liquidity shall not be less than £25million when tesliquidity shall not be less than £25 million when tested post-30 September 2024;

• net debt cover and interest cover covenants to be tested quarterly from

30September 20230 September 2024;

• no dividends will be paid to shareholders until there is an exit event, being a change

of control, refinancing of the RCF in full, prepayment and cancellation of the RCF in

full or upon the termination date of the RCF, being May 2026; and

• the arrangement includes an upside sharing mechanism whereby a fee will become

payable by the Group to members of the lender group upon the occurrence of an exit

event. Such fee to be determined as a percentage of any increase from the current

market capitalisation of the Group to the market capitalisation of the Group at the

date of such exit event.

At 30 June 2023, liquidity

(1)

as defined by the RCF agreement was £59.3 million through

extension of invoice discounting (2022: £70.6m). Liquidity throughout the year was

comfortably above the minimum liquidity covenant of £15 million.

At 30 June 2023, the net debt cover ratio under the RCF funding arrangements was 2.9x

(2022: (93.3)x) and the interest cover was 2.7x (2022: (0.2)x). The amount undrawn on

the facility was €46.7 million (2022: €64.5m).

Notes to the consolidated financial statements continued

Year ended 30 June 2023

At 30 June 2023, the Group had a number of facilities whereby it could borrow against

certain of its trade receivables. In the UK, the Group had a £20 million facility, committed

until September 2024. In France and Belgium, the Group had an aggregate €30 million

facility, which had a rolling notice period of six months for the French part and three

months for the Belgian part, both committed until September 2024. In Germany, the

Group had a €40 million facility, committed until September 2024. In Spain, the Group

had an €8 million facility, committed until May 2026. Since the year end, the Group has

agreed an extension of all invoice discounting facilities to May 2026. The Group can

borrow from the provider of the relevant facility up to the lower of the facility limit and

the value of the respective receivables.

At 30 June 2023, the carrying amount of trade receivables eligible for transfer and the

amounts borrowed under the facility were as follows:

2023

£m

2022

£m

Trade receivables available 49.0 53.7

Amount borrowed (48.7) (53.7)

Amount undrawn 0.3 —

The Group also has access to uncommitted working capital facilities amounting to

£17.8million (2022: £22.7m). A.8 million (2022: £22.7m). At30June2023, £0.6million (2022: £6.8m) wt 30 June 2023, £0.6 million (2022: £6.8m) was drawn

against these facilities in the form of overdrafts and short-term borrowings.

In the following tables, estimated future contractual undiscounted cash flows in respect

of the Group’s financial liabilities are analysed according to the earliest date on which

the Group could be required to settle the liability. Floating rate interest payments are

estimated based on market interest rates prevailing at the balance sheet date. Payments

and receipts in relation to derivative financial instruments are shown net if they will be

settled on a net basis.

(1) Please refer to APM in note 2.

Financial statements

197 McBride plc Annual Report and Accounts 2023

20. Financial risk management continued

Liquidity risk continued

Within

1 year

£m

Between

1 and 2

years

£m

Between

2 and 3

years

£m

Between

3 and 4

years

£m

Between

4 and 5

years

£m

After 5

years

£m

Total

£m

At 30 June 2023

Bank overdrafts (0.6) — — — — — (0.6)

Bank and other loans:

Principal (48.7) — (110.2) — — — (158.9)

Interest payments (2.4) — — — — — (2.4)

Lease liabilities (3.5) (2.7) (2.2) (0.4) (0.2) — (9.0)

Other liabilities (210.3) — — — — — (210.3)

Cash flows on non-derivative liabilities (265.5) (2.7) (112.4) (0.4) (0.2) — (381.2)

Cash flows on derivative liabilities

Payments (59.0) — — — — — (59.0)

Cash flows on financial liabilities (324.5) (2.7) (112.4) (0.4) (0.2) — (440. 2)

Cash flows on derivative assets

Receipts 60.0 1.8 1.8 — — — 63.6

(264.5) 0.9 (110.6) (0.4) (0.2) — (376.6)

Within

1 year

£m

Between

1 and 2

years

£m

Between

2 and 3

years

£m

Between

3 and 4

years

£m

Between

4 and 5

years

£m

After 5

years

£m

Total

£m

At 30 June 2022

Bank overdrafts (6.8) — — — — — (6.8)

Bank and other loans:

Principal (53.7) — — (96.4) — — (150.1)

Interest payments (0.5) — — — — — (0.5)

Lease liabilities (4.4) (3.5) (2.6) (2.2) (0.7) (0.3) (13.7)

Other liabilities (202.4) — — — — — (202.4)

Cash flows on non-derivative liabilities (267.8) (3.5) (2.6) (98.6) (0.7) (0.3) (373.5)

Cash flows on derivative liabilities

Payments (34.1) (0.3) — — — — (34.4)

Cash flows on financial liabilities (301.9) (3.8) (2.6) (98.6) (0.7) (0.3) (4 07.9)

Cash flows on derivative assets

Receipts 33.1 0.3 — — — — 33.4

(268.8) (3.5) (2.6) (98.6) (0.7) (0.3) (374.5)

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

198 McBride plc Annual Report and Accounts 2023

20. Financial risk management continued

Interest rate risk

Interest rate risk is the risk that the fair value of, or future cash flows associated with, a financial instrument will fluctuate due to changes in market interest rates.

The Group is exposed to interest rate risk on its floating rate borrowings, which it has mitigated using interest rate derivatives in the form of interest rate swaps and interest rate caps with

maturities up to 2026.

Under the Group’s policy the critical terms of the derivatives must align with the hedged items. The interest rate instruments executed are matched against the term, currency and entity

where the borrowing exists, fixing the value of interest paid in line with the Group policy. They are monitored to ensure that critical terms of the instrument continue to match the transaction.

The hedge ratio is determined by the Group’s Treasury Policy, which states that the Group aims to be c.50% hedged against the potential adverse effects of interest exposure on its

consolidated net debt. The instruments are matched on a 1:1 ratio with the transaction. Hedge ineffectiveness could be caused through fluctuating forecasts. Forecasts are monitored regularly

and the Group intends to repay debt in line with the timeframe of the hedges entered into. If this changes, additional hedges are executed in order to maintain the policy level.

The changes in the time value of the options that relate to hedged items are deferred in the cash flow hedge reserve and are treated as the cost of hedging.

After taking into account the Group’s currency and interest rate hedging activities, the currency and interest rate profile ofthe Grate profile of the Group’s interest-bearing financial assets and financial

liabilities was as follows:

2023 2022

Euro

£m

Sterling

£m

Danish

Krone

£m

Polish

Zloty

£m

Other

currencies

£m

Total

£m

Euro

£m

Sterling

£m

Danish

Krone

£m

Polish

Zloty

£m

Other

currencies

£m

Total

£m

Floating rate

Bank overdrafts (0.6) — — — — (0.6) (6.6) — — — (0.2) (6.8)

Bank and other loans (0.4) (32.3) (9.2) (3.9) — (45.8) (28.1) (35.6) (8.7) (3.6) — (76.0)

Cash and cash equivalents (9.4) 4.2 1.2 1.2 4.4 1.6 5.9 (4. 8) 0.6 0.6 2.2 4.5

(10.4) (28.1) (8.0) (2.7) 4.4 (44.8) (28.8) (40.4) (8.1) (3.0) 2.0 (78.3)

Fixed rate

Bank and other loans (77.2) (25.0) (5.8) (4.8) — (112.8) (53.2) (10.0) (6.3) (4.6) — (74.1)

Total (87.6) (53.1) (13.8) (7. 5) 4.4 (157.6) (82.0) (50.4) (14.4) (7.6) 2.0 (152.4)

Interest payable on bank overdrafts and floating rate loans is based on base rates and short-term interbank rates (predominantly EURIBOR and SONIA). At 30 June 2023, the weighted

average interest rate payable on bank and other loans was 6.4% (2022: 1.9%). At 30 June 2023, the weighted average interest rate receivable on cash and cash equivalents was 0.0%

(2022: 0.0%).

At 30 June 2023, the Group held interest rate caps which cap the maximum rate payable but allow the rate to float belowthis maximum.o float below this maximum.

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

199 McBride plc Annual Report and Accounts 2023

Foreign currency risk

Transaction risk

Foreign currency transaction risk arises on sales and purchases denominated in

currencies other than the functional currency of the entity that enters into the

transaction. While the magnitude of these exposures is relatively low, the Group’s policy

is to hedge committed transactions in full and to hedge a proportion of highly probable

forecast transactions on a twelve-month rolling basis. Foreign currency transaction risk

also arises on financial assets and liabilitiesdenominated in falso arises on financial assets and liabilities denominated in foreign currencies and Group

policy allows for these exposures to be hedged using forwardcurrency cd currency contracts.

The Group determines the economic relationship between the hedged item and the

hedging instrument for the purpose of assessing hedge effectiveness. The cost of the

transaction increases as the exchange rate weakens, as the hedge instruments in place

are foreign currency liabilities. This same movement in exchange rates would result in an

increase in the value of the liability. The value of the invoices paid is regularly monitored

to ensure the hedges in place continue to meet the monthly exposures and that critical

terms of the instrument continue to match the transaction. On maturity of the hedge the

gain or loss recorded against the spot rate is recorded in the same income statement line

as the invoiced transaction.

The hedge ratio is determined by the Group’s Treasury Policy, which provides a

maximum and minimum hedge level for a number of time brackets. The compliance with

this policy is monitored monthly and new hedges are also added monthly if required.

The level of hedges required is reviewed monthly during the Treasury Management

Committee meeting. Theinstruments arhe instruments are matched on a 1:1 ratio with the transaction.

Hedge ineffectiveness could be caused through the different timing of the payment runs

so that the hedges mature at a different point to the invoices being paid, fluctuating

forecasts or changes to the nature of the business. These risks are mitigated through the

following measures:

• phasing hedges to cover the change of the timing of payments runs;

• monitoring forecasts monthly and adding hedges to reflect any changes;

• the percentage of hedges permitted allowing for the potential uncertainty towards

the end of the forecast period; and

• building significant changes into the forecast, with any changes being allowed for the

purchases made.

At 30 June 2023, the notional principal amount of outstanding foreign currency

contracts (net purchases) that are held to hedge the Group’s transaction exposures was

£14.9million (2022: £13.6m). For ac£14.9 million (2022: £13.6m). For accounting purposes, the Group has designated the

foreign currency contracts as cash flow hedges. At 30 June 2023, the fair value of the

contracts was £(0.2)million (2022: £0.2m). During 20.2) million (2022: £0.2m). During 2023, a loss of £0.1million (2022: 1 million (2022:

loss of £0.1m) was recognised in other comprehensive income and a gain of £0.3million .3 million

(2022: loss of £0.4m) was transferred from the cash flow reserve to the income

statement in respect of these contracts.

20. Financial risk management continued

Interest rate risk continued

2023

Interest

rate caps

£m

Carrying amount 4.9

Notional amount 112.8

Maturity date Jun 2023-May 2026

Hedging ratio 1.1

Change in value of outstanding hedge instruments

since 1Jce 1 July —

Change in value of hedged item used to determine

hedge effectiveness —

Weighted average hedged rate for the year 0.00%-4.15%

2022

Interest

rate caps

£m

Carrying amount 2.2

Notional amount 65.4

Maturity date Jun 2022-May 2026

Hedging ratio 1.1

Change in value of outstanding hedge instruments

since 1Jce 1 July —

Change in value of hedged item used to determine

hedge effectiveness —

Weighted average hedged rate for the year 0.00%-0.75%

All interest rate derivatives held by the Group are indexed to three-month EURIBOR,

SONIA, WIBOR or CIBOR.

Fixed or capped interest rates shown in the above table do not include the margin over

market interest rates payable onthe Group’able on the Group’s borrowings.

On the assumption that a change in market interest rates would be applied to the

interest rate exposures that were in existence at the balance sheet date and that

designated cash flow hedges are 100% effective, an increase/decrease of 100basis decrease of 100 basis

points in market interest rates would have decreased/increased the Group’s profit before

tax by £0.4million (2022: £0..4 million (2022: £0.7m).

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

200 McBride plc Annual Report and Accounts 2023

Notes to the consolidated financial statements continued

Year ended 30 June 2023

20. Financial risk management continued

Foreign currency risk continued

Translation risk

Foreign currency translation risk arises on consolidation in relation to the translation into Sterling of the results and net assets of the Group’s foreign subsidiaries. The Group’s policy is to

hedge a substantial proportion of overseas net assets using a combination of foreign currency borrowings and foreign currency swaps. The Group hedges part of the currency exposure on

translating the results of its foreign subsidiaries into Sterling using average rate options. This exposure is also mitigated by the natural hedge provided by the interest payable on the Group’s

foreign currency borrowings. At 30 June 2023, the fair value of the average rate options was £nil (2022: £nil).

The Group determines the economic relationship between the hedged item and the hedging instrument for the purpose of assessing hedge effectiveness. The value of Group assets increases

as the exchange rate weakens, as the hedge instrument in place is a foreign currency liability. This same movement in exchange rates would result in an increase in the value of the liability.

When hedges mature, any settlements offset the gain or loss on translation of the hedged item and are monitored to ensure critical terms of the instrument continue to match the transaction.

The hedge ratio is determined by the Group’s Treasury Policy, which states the Group will hedge up to 100% of the budgeted exposure. The instruments are matched on a 1:1 ratio with the

transaction. Hedge ineffectiveness could be caused through fluctuations in the forecasted numbers. This is mitigated by hedging a relatively low proportion of the hedged item.

At 30 June 2023, the Group had designated as net investment hedges £42.9million (20estment hedges £42.9 million (2022: £42.6m) of its Euro-denominated borrowings and three-month rolling foreign currency forward

contracts with a notional principal amount of £44.1million (2022: £24.9m). During 201 million (2022: £24.9m). During 2023, a gain of £0.4million (2022: £023, a gain of £0.4 million (2022: £0.5m) was recognised in other comprehensive income in relation to the

net investment hedges. At 30 June 2023, the fair value of the net investment hedges was a gain of £0.2million (2022: £0estment hedges was a gain of £0.2 million (2022: £0.2m).

The currency profile of the Group’s net assets (excluding non-controlling interests) before and after hedging currency translation exposures was as follows:

2023 2022

Net assets/

(liabilities)

before

hedging

£m

Currency

forward

contracts

£m

Net assets

after

hedging

£m

Net assets

before

hedging

£m

Currency

forward

contracts

£m

Net assets

after

hedging

£m

Sterling (24.8) 44.1 19.3 13.6 29.4 43.0

Euro 32.3 (27. 9) 4.4 18.3 ( 17.2) 1.1

Polish Zloty 7.5 (5.8) 1.7 1.9 (1.8) 0.1

Danish Krone 13.0 (10.4) 2.6 12.8 (10.4) 2.4

Malaysian Ringgit 4.1 — 4.1 4.9 — 4.9

Other 5.0 — 5.0 5.5 — 5.5

Total 37.1 — 37.1 57.0 — 57.0

The Group’s exposure to a +/- 10% change in EUR/GBP exchange rate is as follows:

2023 2022

EUR +10%

£m

EUR -10%

£m

EUR +10%

£m

EUR -10%

£m

Impact on equity (1.3) 1.5 (1.3) 1.4

The impact on equity shown above predominantly relates to EUR/GBP contracts that qualify for net investment and cash flow hedge accounting.

The Group uses a combination of foreign currency options and foreign currency forwards to hedge its exposure to foreign currency risk. Under the Group’s policy the critical terms of

the forwards and options must align with the hedged items.

When forward contracts are used to hedge forecast transactions, the Group generally designates the change in the fair value of the forward contract related to both the spot

component and forward element as the hedging instrument. Foroption contracts the change in the fair vor option contracts the change in the fair value of the option contract related to the intrinsic value is designated as the

hedging instrument. The time value of money is treated as a cost of hedging.

Financial statements

201 McBride plc Annual Report and Accounts 2023

Notes to the consolidated financial statements continued

Year ended 30 June 2023

20. Financial risk management continued

Foreign currency risk continued

Translation risk continued

In relation to the hedging activities as described above, the effects of foreign currency

related hedging instruments on the Group’s financial position and performance are as

follows:

2023

Foreign currency forwards

Transactional Translational

Carrying amount (£m) (0.2) 0.2

Notional amount (£m) 17.1 44.1

Maturity date July 2023-June 2024 September 2023

Hedging ratio 1:1 1:1

Change in value of outstanding

hedge instruments since

1Ju1 July(£mly (£m) — 0.3

Change in value of hedged

item used to determine hedge

effectiveness (£m) — (0.3)

Weighted average hedged rate

for the year €1.1668:£1 Various

(1)

(1) The weighted average hedged rate for the year, by currency denomination, was €1.1371:£1, Zloty5.3427:£1, 1371:£1, Zloty 5.3427:£1,

Krone 8.4337:£1.

2022

Foreign currency forwards

Transactional Translational

Carrying amount (£m) 0.2 0.2

Notional amount (£m) 16.3 20.9

Maturity date July 2022-July 2023 September 2022

Hedging ratio 1:1 1:1

Change in value of outstanding

hedge instruments since 1 July

(£m) — (0.1)

Change in value of hedged

item used to determine hedge

effectiveness (£m) — 0.1

Weighted average hedged rate

for the year €1.1537:£1 Various

(1)

(1) The weighted average hedged rate for the year, by currency denomination, was €1.1757:£1, Zloty

5.4411:£1, Krone 8.7312:£1, Ringgit 5.5457:£1.

21. Capital and net debt

The Group’s capital comprises total equity and net debt.

Capital management

The Directors manage the Group’s capital to safeguard its ability to continue as a going

concern in order to provide returns for shareholders and benefits for other stakeholders.

The Directors aim to maintain an efficient capital structure with a relatively conservative

level of debt-to-equity gearing. This is to ensure continued access to a broad range

of financing sources in order to provide sufficient flexibility to pursue commercial

opportunities as they arise.

In order to achieve this overall objective, the Group’s capital management, amongst

other things, aims to ensure that it meets financial covenants attached to borrowings.

Breaches in meeting the financial covenants would permit the bank to call in loans and

borrowings immediately. There have been no breaches in the financial covenants of any

borrowings in the current year.

The capital structure of the Group consists of debt, which includes borrowings disclosed

in note 19, cash and cash equivalents and equity attributable to equity holders of the

Company, comprising issued capital, reserves and retained earnings.

The Group may maintain or adjust its capital structure by adjusting the amount

of dividends paid to shareholders, returning capital to shareholders, issuing new

shares or selling assets to reduce debt. The Group manages the capital structure and

makes adjustments to it in the light of changes in economic conditions and the risk

characteristics of the Group, and in order to meet the financial covenants described in

note 20. The Board regularly reviews the capital structure.

No changes were made in the objectives, policies or processes for managing capital

during the years ended 30 June 2023 and 30 June 2022.

The Group’s capital was as follows:

2023

£m

2022

£m

2021

£m

Total equity 37.1 57.0 69.8

Net debt 166.5 164.4 118.4

Capital 203.6 221.4 188.2

2023

2022

Gearing

(1)

78.4 80.3

(1) Gearing represents net debt divided by the average of current and prior year year-end capital .

Financial statements

202 McBride plc Annual Report and Accounts 2023

Notes to the consolidated financial statements continued

Year ended 30 June 2023

21. Capital and net debt continued

Capital management continued

Movements in net debt were as follows:

At 1 July

2022

£m

IFRS 16

non-cash

movements

(1)

£m

Cash

flows

£m

Currency

translation

differences

£m

At 30 June

2023

£m

Overdrafts (6.8) — 6.2 — (0.6)

Bank loans (96.4) — (13.7) 0.3 (109.8)

Other loans (53.7) — 4.9 0.1 (48.7)

Lease liabilities (12.0) (1.5) 4.3 0.2 (9.0)

Financial liabilities (168.9) (1.5) 1.7 0.6 (168.1)

Cash and cash equivalents 4.5 — (2.2) (0.7) 1.6

Net debt (164.4) (1.5) (0.5) (0.1) (166.5)

Movements in net debt were as follows:

At 1 July

2021

(restated)

(2)

£m

IFRS 16

non-cash

movements

(1)

(restated)

(2)

£m

Cash

flows

(restated)

(2)

£m

Currency

translation

differences

(restated)

(2)

£m

At 30 June

2022

(restated)

(2)

£m

Overdrafts (5.9) — (0.7) (0.2) (6.8)

Bank loans (78.3) — (18.0) (0.1) (96.4)

Other loans (47. 8) — (6.0) 0.1 (53.7)

Lease liabilities (11.3) (5.5) 5.0 (0.2) (12.0)

Financial liabilities (143.3) (5.5) (19.7) (0.4) (168.9)

Cash and cash equivalents 24.9 — (20.3) (0.1) 4.5

Net debt (118.4) (5.5) (40.0) (0.5) (164.4)

(1) IFRS 16 non-cash movements includes additions of £1.2 million (2022: £5.1m), disposals of £nil (2022: £nil) and interest charged of £0.3 million (2022: £0.4m).

(2) Restated to show bank loans and other loans separately.

A reconciliation of the net cash flow to the movement in net debt is shown as follows:

2023

£m

2022

£m

Decrease in net cash and cash equivalents (2.2) (20.3)

Net repayment of bank loans and overdrafts (2.6) (24.7)

Change in net debt resulting from cash flows (4.8) (45.0)

Currency translation differences (0.3) (0.3)

Movement in net debt in the year (5.1) (45.3)

Net debt at the beginning of the year excluding lease liabilities (152.4) (107.1)

Net debt at the end of the year excluding lease liabilities (157.5) (152.4)

Lease liabilities at 1 July (12.0) (11.3)

Lease liabilities non-cash movements (1.5) (5.5)

Repayment of IFRS 16 lease liabilities 4.3 5.0

Currency translation differences 0.2 (0.2)

Net debt at the end of the year (166.5) (164.4)

Financial statements

203 McBride plc Annual Report and Accounts 2023

22. Pensions and other post-employment benefits

Overview

The Group provides a number of post-employment benefit arrangements. In the

UK, the Group operates a closed defined benefit pension scheme and a defined

contribution pension scheme. Elsewhere in Europe, the Group has a number of smaller

post-employment benefit arrangements that are structured to accord with local

conditions and practices in the countries concerned. The Group also recognises the

assets and liabilities for all members of the defined contribution scheme in Belgium,

accounting for the whole defined contribution section as a defined benefit scheme

under IAS 19 ‘Employee Benefits’, as there is a risk the underpin will require the Group

topato pay further contributions to the scheme.

At 30 June 2023, the Group’s post-employment benefit obligations outside the UK

amounted to £1.9million (20amounted to £1.9 million (2022: £1.7m).

Non-governmental collected post-employment benefits had the following effect on the

Group’s results and financial position:

2023

£m

2022

£m

Profit or loss

Operating profit

Defined contribution schemes

Contributions payable (2.5) (2.4)

Defined benefit schemes

Service cost and administrative expenses (net of

employee contributions) (1.0) (1.0)

Net charge to operating profit/(loss) (3.5) (3.4)

Finance costs

Net interest cost on defined benefit obligation (0.5) (0.5)

Net charge to loss before taxation (4.0) (3.9)

Other comprehensive income

Defined benefit schemes

Net actuarial (loss)/gain (14.1) 12.4

Notes to the consolidated financial statements continued

Year ended 30 June 2023

2023

£m

2022

£m

Balance sheet

Defined benefit obligations

UK – funded (98.1) (116.6)

Other – unfunded (12.4) (12.0)

(110.5) (128.6)

Fair value of scheme assets

UK – funded 73.4 102.2

Other – unfunded 10.5 10.3

Deficit on the schemes (26.6) (16.1)

Related deferred tax asset (note 9) 6.5 3.9

UK defined benefit pension scheme

(i) Background

In the UK, the Robert McBride Pension Fund (‘the Fund’) provides pension benefits

based on the final pensionable salaryand period of qualifying service of the participating based on the final pensionable salary and period of qualifying service of the participating

employees. The UK defined benefit fund was closed to future service accrual from 29

February 2016. Staff affected by this change were offered a new defined contribution

scheme from that date.

The Fund is administered and managed by Robert McBride Pension Fund Trustees Limited

(‘the Trustee’), in accordance with the terms of a governing Trust Deed and relevant

legislation. Regular assessments of the Fund’s benefit obligations are carried out by an

independent actuary on behalf of the Trustee and long-term contribution rates are agreed

between the Trustee and the Company on the basis of the actuary’s recommendations.

Following the triennial valuation at 31 March2021, the Company and Tch 2021, the Company and Trustee agreed a new

deficit reduction plan based on the scheme funding deficit of £48.4million. The curr48.4 million. The current level

of deficit contributions of £4.0million per annum, payable until 31 Mar0 million per annum, payable until 31 March 2028, will continue

and this is expected to eliminate the deficit by 31 March 2028. The Company has separately

agreed that (from1October 2024) if EBITom 1 October 2024) if EBITA exceeds £30million in any yceeds £30 million in any year following the

year ending 31 March 2023, additional annual deficit contributions of £0.34million for each ch 2023, additional annual deficit contributions of £0.34 million for each

£1million of EBIT£1 million of EBITA above £30million, up tve £30 million, up to a maximum of £1.7million, will become pao a maximum of £1.7 million, will become payable

(monthly in arrears). Also, the Company has agreed to make additional contributions such

that the total deficit contributions in any year match the value of any dividend paid. These

arrangements will provide scope to de-risk and/or accelerate the recovery plan, where

affordability of the business allows. The funding arrangements and recovery plan willnevery plan will next

be reviewed by the Company and Trustee as part of the 31 March 2024 valuation.

Financial statements

204 McBride plc Annual Report and Accounts 2023

22. Pensions and other post-employment benefits continued

UK defined benefit pension scheme continued

(ii) Assumptions and sensitivities

For accounting purposes, the Fund’s benefit obligation has been calculated based on

data gathered for the 2021 triennial actuarial valuation and by applying assumptions

made by the Company on the advice of an independent actuary in accordance with

IAS19 ‘EmploIAS 19 ‘Employee benefits’, which differ in certain respects from the assumptions made

by the Trustee forthe purpose of the actuarial vrustee for the purpose of the actuarial valuation.

The principal assumptions used in calculating the benefit obligation at the end of the

year were as follows:

2023 2022

Discount rate 5.30% 3.70%

Inflation rate:

Retail Prices Index 3.25% 3.10%

Consumer Prices Index 2.60% 2.45%

Revaluation of deferred pensions (in excess of GMP)

Accrued before 6 April 2009 2.60% 2.45%

Accrued on or after 6 April 2009 2.60% 2.45%

Increase in pensions in payment (in excess of GMP)

Accrued before 1 April 2011 2.92% 3.04%

Accrued on or after 1 April 2011 1.84% 2.18%

The duration of the Fund’s liabilities is estimated to be 13 years, i.e. the average time until

a payment is made is 13 years. Inpractice, the Fund’ears. In practice, the Fund’s liabilities continue for upwards of

50 years.

The mortality assumptions are based on a medically underwritten mortality study

which was carried out in 2017 to identify the current health of a sample group of Fund

members, and a postcode analysis for the remainder of the membership. Thiswas emainder of the membership. This was

translated into mortality assumptions for use in calculating the IAS 19 scheme liabilities.

Specifically, a rating of 102% (2022: 102%) of the standard Self-Administered Pension

Scheme (SAPS) S2 tables has been used for the IAS 19 disclosures as at 30 June 2023.

As at 30 June 2023, the future mortality improvement model has been updated to

reflect the most recent Continuous Mortality Investigation (CMI) 2022 projections with

an allowance for long-term rates of improvement of 1.0% p.a. for males and females.

Previously, in 2022, this assumption had been CMI 2021 with a long-term rate of

improvement of 1.0% p.a. for males and females. In line with the 2021 CMI model, the

2022 CMI model has a smoothing parameter for which the default value of 7.0 (2022:

7.0) has been adopted. There is also an initial addition parameter for which the default

value of 0.25% (2021: 0.25%) has been adopted. These assumptions are equivalent to

a life expectancy at 65 of 20.8 years (2022: 21.2 years) for males and 23.0 years (2022:

23.4 years) for females.

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Life expectancies at age 65 for:

2023

Years

2022

Years

Member retiring in the next year:

Male 20.8 21.2

Female 23.0 23.4

Member retiring 20 years from now:

Male 21.8 22.2

Female 24.2 24.6

At 30 June 2023, the sensitivity of the benefit obligation to changes in the principal

assumptions was as follows (assuming in each case that the other assumptions are

unchanged):

Change in

assumption

Increase in

assumption

Decrease in

assumption

Discount rate +/- 0.1% Decrease by £1.2m Increase by £1.2m

Inflation rate

(1)

+/- 0.1% Increase by £0.8m Decrease by £0.8m

Life expectancy +1 year Increase by £3.0m —

(1) This includes the impact on deferred and in-payment pension increase assumptions.

The assumption sensitivities are reasonable expectations of potential changes in the

assumptions.

(iii) Fund’s assets

The Fund’s assets are held separately from those of the Group and are managed by

professional investment managers on behalf of the Trustee.

A cash flow driven investment (CDI) strategy was implemented during the first half of

the financial year to 30 June 2020. Using credit/bond investments, the CDI strategy

delivers a stable, more certain expected return and reduced volatility. The strategy

previously targeted a c.100% hedge of interest rates and inflation. As a result of the

government bond crisis in 2022 and changes in liability driven investment (LDI)

managers’ collateral requirements, the Trustee amended the strategy in October 2022

and as an interim step moved to an unlevered government bond-based hedge with

c.40% of interest rate and inflation hedging.

The investment strategy is currently being reviewed and hedging is due to be increased

to c.60% of interest rates and inflation. This level of hedging broadly hedges the current

funding level of the Fund and strikes a balance between risk and return objectives and

the liquidity needs of the Fund. The Fund invests in liability driven investment (LDI) in

order to hedge interest rates and inflation. The key risk associated with this investment is

liquidity risk and this is actively monitored by the Trustees and their advisers. Following

last year’s gilt crisis, the Fund has de-levered its LDI investments in order to better

manage its liquidity risk.

Financial statements

205 McBride plc Annual Report and Accounts 2023

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Movements in the benefit obligation during the year were as follows:

2023

£m

2022

£m

At 1 July (116.6) (161.9)

Interest cost (4.2) (2.9)

Remeasurement gain arising from changes in financial

assumptions 24.3 38.2

Remeasurement gain arising from changes in demographic

assumptions 1.9 2.4

Experience loss on liabilities (9.5) —

Benefits paid 6.0 7.6

At 30 June (98.1) (116.6)

(v) Experience gains and losses

Actuarial gains and losses recognised in other comprehensive income represent the

effect of the differences between the assumptions and actual outcomes.

At 30 June 2023, the cumulative net actuarial loss in relation to the Fund that has been

recognised in other comprehensive income amounted to £46.9million (2022: £33.5m).46.9 million (2022: £33.5m).

Belgium defined contribution pension scheme

(i) Background

From 1 July 2021, the Group recognised the assets and liabilities for all members of the

defined contribution scheme in Belgium, accounting for the whole defined contribution

section as a defined benefit scheme under IAS 19 ‘Employee Benefits’, as there is a risk

the underpin will require the Group to pay further contributions to the scheme.

(ii) Assumptions and sensitivities

The principal assumptions used in calculating the benefit obligation at the end of the

year were as follows:

2023 2022

Discount rate 3.65% 3.10%

Inflation rate 2.20% 2.00%

Salary increase rate on top of inflation 0.00% 2.00%

Mortality tables MR-5/FR-5 MR-5/FR-5

Retirement age 65 65

Withdrawal rate 0.00% 0.00%

At 30 June 2023, the sensitivity of the benefit obligation to a 0.5% increase and

decrease in the discount rate assumptions resulted in no change to the scheme liabilities.

22. Pensions and other post-employment benefits continued

UK defined benefit pension scheme continued

(iii) Fund’s assets continued

The Fund holds no investment in securities issued by, nor any property used by, McBride

plc or any of its subsidiaries. Thefplc or any of its subsidiaries. The fair value of the Fund’s assets at the end of the year

was as follows:

2023

£m

Asset

classification

2022

£m

Asset

classification

Private markets 19.8 Unquoted 19.3 Unquoted

Liability-driven investment 16.2 Quoted 19.4 Quoted

Credit 36.6 Unquoted 63.4 Unquoted

Cash and cash equivalents 0.8 Quoted 0.1 Quoted

Total 73.4 102.2

Except for the liability-driven investment (LDI) assets and the credit default swaps

(CDS), all of the Fund’s assets are held in pooled funds. The liability-driven investment,

cash and credit assets are classified as Level 2 instruments, as they are not quoted on

any stock exchange, although their value is directly related to the value of the underlying

holdings. The private market credit assets are Level 3 instruments, with no daily quoted

price available.

The expected return on the Fund’s assets must be set to be in line with the discount rate

used to value the Fund’s liabilities. This equates to an expected return over the year of

£3.8million (2022: £2.4m).£3.8 million (2022: £2.4m).

The actual return on the Fund’s assets during the year was a loss of £26.8million as a loss of £26.8 million

(2022:loss of £26.8m), which w(2022: loss of £26.8m), which was more adverse than expected, but was more than

offset by the reduction in scheme liabilities, driven by increases in corporate bond yields.

(iv) Movements in the Fund’s assets and liabilities

Movements in the fair value of the Fund’s assets during the year were as follows:

2023

£m

2022

£m

At 1 July 102.2 132.6

Expected return on plan assets 3.8 2.4

Loss on assets in excess of interest income on Fund assets (30.6) (29.2)

Employer’s contributions 4.0 4.0

Benefits paid (6.0) (7.6)

At 30 June 73.4 102.2

Financial statements

206 McBride plc Annual Report and Accounts 2023

Notes to the consolidated financial statements continued

Year ended 30 June 2023

22. Pensions and other post-employment benefits continued

Belgium defined contribution pension scheme continued

(iii) Experience gains and losses

Actuarial gains and losses recognised in other comprehensive income represent the effect of the differences between the assumptions and actual outcomes.

At 30 June 2023, the cumulative net actuarial loss in relation to the Fund that has been recognised in other comprehensive income amounted to £nil (2022: £nil).

23. Employee share schemes

Share awards

The Group operates a performance-based Long-Term Incentive Plan (LTIP) for the Executive Directors and certain other senior executives. Awards made under the LTIP vest provided

the participant remains in the Group’s employment during the three-year vesting period and the Group achieves the related performance conditions. In the current year, 50% of the

awards granted vest dependent on the growth in the Group’s EPS (a vesting condition) and 50% of the awards granted vest dependent on the growth in the Group’s adjusted ROCE

(a vesting condition). In previous years, up to 50% of each award vests dependent on the TSR of the Company’s ordinary shares compared with the TSR of the FTSE SmallCap Ex.

Investment Companies Index (a market condition) and up to 50% of each award vests dependent on the growth in the Group’s EPS (a vesting condition).

During the year Restricted Share Units (RSUs) were granted to Executive Directors and certain other senior executives. Awards made under the RSU vest provided the participant

remains in the Group’s employment during the three-year vesting period.

Vested awards are settled either in the form of the Company’s ordinary shares (equity-settled) or by the payment of cash equivalent to the market value of the Company’s ordinary

shares on the vesting date (cash-settled). From 2017, allawar, all awards granted result in equity-settled amounts.

Further information on the LTIP and RSU awards is set out in the Remuneration Committee report.

Movements in LTIP and RSU awards outstanding were as follows:

2023 2022

LTIP Equity-

settled

Number

RSU Equity-

settled

Number

Cash-

settled

Number

LTI P Equity-

settled

Number

RSU Equity-

settled

Number

Cash-

settled

Number

Outstanding at 1 July 5,757,310 1,264,494 175,213 6,132,039 337,815 175,213

Granted 2,398,821 4,461,052 — 1,830,414 1,138,645 —

Vested — (98,864) — — — —

Forfeited — (19,475) — (1,314,236) (211,966) —

Lapsed (1,531,415) — — (890,907) — —

Outstanding at 30 June 6,624,716 5,607,207 175,213 5,757,310 1,264,494 175,213

Unvested at 30 June 6,624,716 5,607,207 — 5,757,310 1,264,494 —

Awards made under the LTIP and RSU have a £nil exercise price.

The maximum term of equity-settled awards granted in the year is three years. The weighted average remaining life of equity-settled awards at 30 June 2023 is 1.6 years

(2022:1.2y(2022: 1.2 years). The weighted average remaining life of cash-settled awards at 30 June 2023 is 0.7 years (2022: 1.7 years).

During 2023, no cash LTIP awards vested (2022: none), no equity-settled LTIP awards vested (2022: none) and 98,864 RSU awards vested (2022: none). The weighted average share

price on the vesting date of equity-settled awards in 2023 was 27.0 pence (2022: N/A).

At 30 June 2023, the liability recognised in relation to cash-settled awards was £0.3million (2022: £0ds was £0.3 million (2022: £0.3m).

Financial statements

207 McBride plc Annual Report and Accounts 2023

23. Employee share schemes continued

Share awards continued

At the grant date, the weighted average fair value of LTIP awards granted during the year was 21.9 pence (2022: 74.2p). Fair value was measured using a variant of the Black-Scholes

valuation model based on the following assumptions:

Oct

2022

issue

Oct

2021

issue

Sep

2021

issue

Feb

2021

issue

Oct

2020

issue

Sep

2020

issue

Risk-free interest rate n/a n/a n/a n/a n/a n/a

Share price on grant date 24.0p 71.0p 80.0p 84.0p 84.0p 84.0p

Dividend yield on the Company’s shares n/a n/a n/a n/a n/a n/a

Volatility of the Company’s shares n/a n/a n/a n/a n/a n/a

Expected life of LTIP awards 3 years 3 years 3 years 3 years 3 years 3 years

Risk-free rate and volatility have no impact on nil cost awards which are subject to non-market-based performance conditions.

At the grant date, the weighted average fair value of RSU awards granted during the year was 24.1 pence (2022: 69.3p). Fair value was based on the share price at the date of grant

with the following assumptions:

Jun

2023

issue

Nov

2022

issue

Oct

2022

issue

Jun

2022

issue

Feb

2022

issue

Oct

2021

issue

22 Sep

2021

issue

13 Sep

2021

issue

Jun

2021

issue

Feb

2021

issue

Oct

2020

issue

Sep

2020

issue

Risk-free interest rate n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

Share price on grant date 27.0p 25.0p 25.0p 30.8p 46.0p 71.0p 81.0p 80.0p 84.0p 83.0p 59.0p 63.0p

Dividend yield on the

Company’s shares n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

Volatility of the

Company’s shares n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

Expected life of

RSU awards 3 years 3 years 3 years 3 years 3 years 3 years 3 years 3 years 3 years 3 years 3 years 3 years

Risk-free rate and volatility have no impact on nil cost awards which are subject to non-market-based performance conditions.

Compensation expense recognised in profit or loss in relation to employee share schemes was as follows:

2023

£m

2022

£m

Equity-settled awards 0.5 —

Total expense 0.5 —

Deferred Annual Bonus Plan

The Group has in force a Deferred Annual Bonus Plan for the main Executive Directors. There is no exercise price for the shares awarded under the plan, which are subject to a vesting

period of three years and will normally vest on the expiry of this period and are normally only payable if the Director remains employed by the Group at the end of that period. Awards

granted under the Deferred Annual Bonus Plan are eligible for dividend equivalent payments.

To date, no share awards have been granted under the Deferred Annual Bonus Plan.

The total amount included in operating profit in relation to the Deferred Annual Bonus Plan was £nil (2022: £nil).

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Financial statements

208 McBride plc Annual Report and Accounts 2023

Notes to the consolidated financial statements continued

Year ended 30 June 2023

24. Provisions

Reorganisation

and

restructuring

£m

Leasehold

dilapidations

£m

Environmental

remediation

£m

Independent

business

review

£m

Other

£m

Total

£m

At 1 July 2021 2.1 1.5 2.4 — 0.4 6.4

Charged to profit or loss 0.4 — 0.6 1.7 0.6 3.3

Utilisation (1.7) — (0.3) — (0.5) (2.5)

At 30 June 2022 0.8 1.5 2.7 1.7 0.5 7. 2

Charged to profit or loss (0.1) 0.2 0.7 1.0 — 1.8

Currency translation difference — — 0.1 — — 0.1

Utilisation (0.4) — (0.5) (2.6) (0.3) (3.8)

At 30 June 2023 0.3 1.7 3.0 0.1 0.2 5.3

Analysis of provisions:

2023

£m

2022

£m

Current 2.7 3.4

Non-current 2.6 3.8

Total 5.3 7. 2

Reorganisation credit in the year of £0.1million is due to a r1 million is due to a release of costs associated with the Group’s logistics transformation programme. The closing provision for reorganisation

and restructuring relates to the Group’s logistics transformation programme only. The provision is expected to be fully utilised within twelve months of the balance sheet date.

Leasehold dilapidations provision relates to costs expected to be incurred to restore leased properties to their original condition at the end of the respective lease terms. A provision

has been recognised for the present value of the estimated expenditure required to undertake restoration works. A dilapidation provision of £0.2million has been added in yearvision of £0.2 million has been added in year,

relating to the UK head office building. Amounts will be utilised as the respective leases end and restoration works are carried out, within a period of approximately twelve months.

Environmental remediation provision relates to historical environmental contamination at a site in Belgium. The additional costs in the year of £0.7million r.7 million result from a re-evaluation of

the cost of environmental remediation. The closing provision is expected to be utilised as the land is restored within a period of approximately seven years.

The independent business review was initiated to support discussions with banking partners regarding revisions to financing arrangements and banking covenants. The closing

provision of £0.1 millionhas been rec1 million has been recognised in relation to consultancy costs directly associated with the IBR.

Other provisions of £0.2million relatvisions of £0.2 million relate to costs concerning the sale of the PC Liquids business, property repairs and onerous lease obligations. The liability is expected to be settled

within twelve months of the balance sheet date.

The amount and timing of all cash flows related to the provisions are reasonably certain.

Financial statements

209 McBride plc Annual Report and Accounts 2023

Notes to the consolidated financial statements continued

Year ended 30 June 2023

25. Share capital and reserves

Share capital

Authorised,

allotted and fully paid

Number £m

Ordinary shares of 10 pence each

At 1 July 2021 174,242,702 17.4

Shares bought back on-market and cancelled (185,374) —

At 30 June 2022 and 30 June 2023 174,057,328 17.4

Ordinary shares carry full voting rights and ordinary shareholders are entitled to attend Company meetings and to receive payments to shareholders.

McBride plc announced on 2 November 2020 that it would commence a share buy-back programme of up to £12million in McBride plc ordinary sharamme of up to £12 million in McBride plc ordinary shares, running from 2Noes, running from 2 November20vember 2020 through

to the date of the Company’s next AGM. The maximum number of shares that could have been repurchased by the Company under the programme was 18.3million. The purpose of the sharas 18.3 million. The purpose of the share

buy-back programme was to reduce the share capital of the Company (cancelling any shares repurchased for this purpose). The Board believed that it was in the interests of all shareholders to

commence this programme based on the Board’s assessment that McBride plc’s share price at the time did not reflect the value of the underlying business, which has resilient revenue, a strong

balance sheet and highly visible cash flows.

As previously announced, the Board ended the share buy-back programme during the prior year. In the year to 30 June 2022, the Group purchased and cancelled 185,374 ordinary shares,

representing 0.1% of the issued ordinary share capital as at 2 November 2020. The shares were acquired at an average price of 77.0 pence per share, with prices ranging from 73.3 pence per share

to 78.6 pence per share. The total cost of £0.1 million was deducted from equity as the purchase of own shares. A transfer of £nil was made from share capital to the capital redemption reserve.

Reserves

(i) Share premium account

The share premium account records the difference between the nominal amount of shares issued and the fair value of the consideration received. The share premium account may be used

for certain purposes specified by UK law, including to write off expenses incurred on any issue of shares or debentures and to pay up fully paid bonus shares. The share premium account is

not distributable but may be reduced by special resolution of the Company’s ordinary shareholders and with court approval.

(ii) Cash flow hedge reserve

The cash flow hedge reserve comprises the cumulative net change in the fair value of hedging instruments in designated cash flow hedging relationships recognised in other

comprehensive income.

(iii) Currency translation reserve

The currency translation reserve comprises cumulative currency translation differences on the translation of the Group’s net investment in foreign operations into Sterling together with the

cumulative net change in the fair value of hedging instruments in designated net investment hedging relationships recognised in other comprehensive income.

(iv) Capital redemption reserve

The capital redemption reserve records the cost of shares purchased by the Company for cancellation or redeemed in excess of the proceeds of any fresh issue of shares made specifically to

fund the purchase or redemption. The capital redemption reserve is not distributable but may be reduced by special resolution of the Company’s ordinary shareholders and with court approval.

Own shares

Treasury shares Employee Benefit Trust Total

Number £m Number £m Number £m

At 1 July 2021 and 30 June 2022 42,041 — 587,159 0.5 629,200 0.5

Shares paid out to employees — — (100,512) (0.1) (100,512) (0.1)

At 30 June 2023 42,041 — 486,647 0.4 528,688 0.4

The treasury shares and the shares in trust represent the Company’s ordinary shares that are acquired to satisfy the Group’s expected obligations under employee share schemes.

The market value of own shares held at 30 June 2023 was £0.1million (2022: £01 million (2022: £0.1m).

Financial statements

210 McBride plc Annual Report and Accounts 2023

26. Acquisitions and disposals

No acquisitions or disposals occurred in the current year.

In the prior year, the following disposals occurred:

Sale of Barrow site, UK

The Barrow production facilities ceased operations in October 2020. On 1 October 2021,

proceeds of £2.6million wereeds of £2.6 million were received for the sale of the site. After accounting for costs

of disposal of £0.8million, an eof disposal of £0.8 million, an exceptional gain of £1.8million has been rxceptional gain of £1.8 million has been recognised in

theyearthe year.

Sale of factory in Malaysia

On 15 April 2022, the Group completed the sale of the land and buildings at a former

manufacturing site in Malaysia. Theland and buildings are part of the Asia Pysia. The land and buildings are part of the Asia Pacific

segment. Proceeds of £2.8million wereeds of £2.8 million were received in respect of this sale. After accounting

for costs of disposal of £1.2million, an exts of disposal of £1.2 million, an exceptional gain of £1.6million has been ceptional gain of £1.6 million has been

recognised in the year.

Sale of warehouse in Guesnain, France

On 24 June 2022, the land and buildings at a former warehousing facility in Guesnain,

France were sold as part of the Group’s logistics transformation programme. The land

and buildings are central assets. Proceeds of £0.7million wer7 million were received in respect of

this sale. After accounting for costs of disposal of £0.4million, an exc.4 million, an exceptional gain of

£0.3million has been r£0.3 million has been recognised in the year.

27. Capital commitments

Capital expenditure on property, plant and equipment

2023

£m

2022

£m

Contracted but not provided 5.5 4.0

28. Related party transactions

Transactions between the Company and its subsidiaries, which are related parties of the

Company, have been eliminated on consolidation and, therefore, are not required to be

disclosed in these financial statements. Details of transactions between the Group and

other related parties are disclosed below.

Post-employment benefit plans

As shown in note 22, contributions amounting to £6.5million (20e 22, contributions amounting to £6.5 million (2022: £6.4m) were

payable by the Group to pension schemes established for the benefit of its employees.

At 30 June 2023, £0.6million (2022: £023, £0.6 million (2022: £0.5m) in respect of contributions due was

included in other payables.

Notes to the consolidated financial statements continued

Year ended 30 June 2023

Compensation of key management personnel

For the purposes of these disclosures, the Group regards its key management personnel

as the Directors and certain members of the senior executive team.

Compensation payable to key management personnel in respect of their services to the

Group was as follows:

2023

£m

2022

£m

Short-term employee benefits 2.5 2.2

Post-employment benefits 0.1 0.1

Share-based payments 0.3 —

Total 2.9 2.3

29. Events after the reporting date

Since the year end, the Group has agreed the extension of all invoice discounting

facilities to May 2026.

On 27 July 2023, the Group entered into a lease agreement with future cash flows

of£1.7million.of £1.7 million.

30. Exchange rates

The principal exchange rates used to translate the results, assets and liabilities and cash

flows of the Group’s foreign operations into Sterling were as follows:

Average rate Closing rate

2023 2022 2023 2022

Euro 1.15 1.18 1.17 1.17

US Dollar 1.20 1.33 1.27 1.21

Danish Krone 8.56 8.78 8.68 8.67

Polish Zloty 5.38 5.45 5.17 5.47

Czech Koruna 27.72 29.57 27.66 28.83

Hungarian Forint 453.41 433.28 433.34 462.64

Malaysian Ringgit 5.41 5.63 5.91 5.33

Australian Dollar 1.79 1.83 1.91 1.76

Financial statements

211 McBride plc Annual Report and Accounts 2023

Company balance sheet

As at 30 June 2023

Note

2023

£m

2022

£m

Fixed assets

Investments 5 158.4 158.4

Current assets

Trade and other debtors 6 135.7 155.8

Cash and cash equivalents 3.8 1.0

Creditors: amounts falling due within one year 7 (76.7) (86.1)

Net current assets 62.8 70.7

Total assets less current liabilities 221.2 229.1

Creditors: amounts falling due after more than one year 8 (75.9) (62.7)

Provision for liabilities 10 (0.1) (1.7)

Net assets 145.2 164.7

Capital and reserves

Called-up share capital 12 17.4 17.4

Share premium account 68.6 68.6

Capital redemption reserve 77. 2 77. 2

Cash flow hedge reserve 3.6 1.2

Retained earnings (21.6) 0.3

Total shareholders’ funds 145.2 164.7

The financial statements on pages 212 to 220 were approved by the Board of Directors on 18 September 2023 and were signed on its behalf by:

Chris Smith

Director

McBride plc

Registered number: 02798634

Financial statements

212 McBride plc Annual Report and Accounts 2023

Company statement of changes in equity

Year ended 30 June 2023

Issued

capital

£m

premium

account

£m

Capital

redemption

reserve

£m

Cash flow

hedge

£m

Profit

and loss

£m

Total

shareholders’

funds

£m

At 30 June 2021 17.4 68.6 7 7.1 0.3 9.9 173.3

Year ended 30 June 2022

Loss for the year — — — — (8.3) (8.3)

Other comprehensive income

Items that may be reclassified to profit or loss:

Net changes in fair value — — — 0.8 — 0.8

Cash flow hedges transferred to profit and loss — — — 0.1 — 0.1

Total other comprehensive income — — — 0.9 — 0.9

Total comprehensive income/(expense) — — — 0.9 (8.3) (7.4)

Transactions with owners of the parent

Redemption of B Shares — — 0.1 — (0.1) —

Share-based payments — — — — 0.1 0.1

Purchase of own shares — — — — (0.6) (0.6)

Taxation relating to the above — — — — (0.7) (0.7)

At 30 June 2022 17.4 68.6 7 7. 2 1.2 0.3 164.7

Year ended 30 June 2023

Loss for the year — — — — (21.6) (21.6)

Other comprehensive income

Items that may be reclassified to profit or loss:

Net changes in fair value — — — 1.8 — 1.8

Cash flow hedges transferred to profit and loss — — — 0.6 — 0.6

Total other comprehensive income — — — 2.4 — 2.4

Total comprehensive income/(expense) — — — 2.4 (21.6) (19.2)

Transactions with owners of the parent

Share-based payments — — — — 0.2 0.2

Taxation relating to the above — — — — (0.5) (0.5)

At 30 June 2023 17.4 68.6 77. 2 3.6 (21.6) 145.2

Financial statements

213 McBride plc Annual Report and Accounts 2023

Notes to the Company financial statements

Year ended 30 June 2023

1. Corporate information

McBride plc (‘the Company’) is the ultimate parent Company of a group of companies

that together is Europe’s leading provider of private label household products.

TheCompany develops and manufactures products for themajority of retailers and

major brand owners throughout the UK, Europe and Asia.

The Company is a public company limited by shares, with shares traded on the London

Stock Exchange, incorporated and domiciled in the United Kingdom and registered in

England and Wales. The address of its registered office isMcBride plc, Middleton Way,

Middleton, Manchester M244DP.

2. Accounting policies

Accounting period

The Company’s annual financial statements are drawn up to30 June. These financial

statements cover the year ended 30 June 2023 (‘2023’) with comparative amounts

forthe year ended 30 June 2022 (‘2022’).

Basis of preparation

The Company’s financial statements have been prepared in accordance with Financial

Reporting Standard 101, ‘Reduced Disclosure Framework’ (FRS 101). The financial

statements have been prepared under the historical cost convention and in accordance

with the Companies Act 2006. In preparing these financial statements, the Company

applies the recognition, measurement and disclosure requirements of International

Financial Reporting Standards as adopted by the UK (UK-adopted international

accounting standards), but makes amendments where necessary in order to comply with

the Companies Act 2006 and to take advantage of FRS 101 disclosure exemptions.

FRS 101 sets out amendments to IFRS that are necessary to achieve compliance with the

Act and related regulations. As permitted by FRS 101, the Company has taken advantage

of the disclosure exemptions available under that standard in relation to business

combinations, financial instruments, share-based payments, capital management,

presentation of comparative information in respect of certain assets, presentation of

a cash flow statement, standards not yet effective, impairment of assets and related

party transactions. Where required, equivalent disclosures are given in the consolidated

financial statements of McBride plc.

For further information on going concern, please see note 2 in the consolidated financial

statements on page 164.

The Directors have taken advantage of the exemption available under section 408 of

the Companies Act 2006 and not presented an income statement or a statement of

comprehensive income for the Company alone. A summary of the Company’s significant

accounting policies is set out below.

The accounting policies adopted are consistent with those of the annual financial

statements for the year ended 30June 2023.

Principal accounting policies

Investments in subsidiaries

Investments in subsidiaries are held at cost, less provision for impairment. Any potential

impairment is determined on a basis of the carrying value of the investment against the

higher of net assets or discounted future cash flows.

Financial instruments

The Company classifies its financial assets in the following categories:

• those to be measured subsequently at fair value (either through other comprehensive

income (OCI) or through profit or loss); and

• those to be measured at amortised cost.

The classification depends on the Company’s business model for managing the financial

assets and the contractual terms of the cash flows. For assets measured at fair value,

gains and losses will either be recorded in profit or loss or OCI. TheCompany reclassifies

debt instruments when, and only when, its business model for managing those assets

changes.

At initial recognition, the Company measures a financial asset at its fair value plus, in the

case of a financial asset not at fair value through profit or loss (FVPL), transaction costs

that are directly attributable to the acquisition of the financial asset. Transaction costs of

financial assets carried at FVPL are expensed in profit or loss.

Financial assets with embedded derivatives are considered in their entirety when

determining whether their cash flows are solely payment of principal and interest.

Subsequent measurement of debt instruments depends on the Company’s business

model for managing the asset and the cash flow characteristics of the asset. There are

three measurement categories into which the Company classifies its debt instruments:

• amortised cost: Assets that are held for collection of contractual cash flows where

those cash flows represent solely payments of principal and interest are measured

at amortised cost. Interest income from these financial assets is included in finance

income using the effective interest rate method. Any gain or loss arising on

derecognition is recognised directly in profit or loss and presented in other gains/

(losses) together with foreign exchange gains and losses. Impairment losses are

presented as a separate line item in the statement of profit or loss. The Company

assesses on a forward-looking basis the expected credit losses associated with its

debt instruments carried at amortised cost. The impairment methodology applied

depends on whether there has been a significant increase in credit risk;

Financial statements

214 McBride plc Annual Report and Accounts 2023

Derivative financial instruments are recognised and stated at fair value. Where

derivatives do not qualify for hedge accounting, any gains or losses on remeasurement

are immediately recognised in the Company income statement. Where derivatives

qualify for hedge accounting, recognition of any resultant gain or loss depends on

the nature of the hedge relationship and the items being hedged. In order to qualify

for hedge accounting, the Company is required to document, from inception, the

relationship between the item being hedged and the hedging instrument.

The Company is also required to document and demonstrate an assessment of the

relationship between the hedged item and the hedging instrument, which shows that

the hedge will be highly effective on an ongoing basis. This effectiveness testing is

performed at each reporting date to ensure that the hedge remains highly effective.

Derivative financial instruments with maturity dates of more than one year from the

balance sheet date are disclosed as non-current.

The Company has entered into a number of financial derivative contracts and each is

discussed in turn.

The Company enters into forward foreign exchange contracts to mitigate the exchange

risk for certain foreign currency debtors. At 30 June 2023, the outstanding contracts all

mature within twelve months (2022: twelve months) of the year end. The Company is

committed to sell PLN and EUR and receive a fixed Sterling amount.

The Company also enters into interest rate swap contracts to mitigate against the

floating interest rates on RCF debt. At 30 June 2023, there are six outstanding contracts:

two mature within twelve months of the year end with the remaining four maturing more

than twelve months after the year end.

All contracts are measured at fair value, which is determined using valuation techniques

that utilise observable inputs. The key assumptions used in valuing derivatives are the

exchange rates for GBP:EUR and GBP:PLN as well as EUR and GBP interest rates.

Foreign currency translation

Transactions denominated in foreign currencies are translated into Sterling at the

exchange rate ruling on thedate of the transaction. Monetary assets and liabilities

denominated in foreign currencies are retranslated at the exchange rate ruling on the

balance sheet date. Currency translation differences are recognised in the income

statement.

Share-based payments

The Company operates incentive share schemes under which it grants equity-settled and

cash-settled awards over its own ordinary shares to certain employees of its subsidiaries.

The Company recognises a capital contribution to the subsidiaries concerned that is

based on the fair value of the awards measured using the Black-Scholes option pricing

formula or the Monte Carlo valuation model.

2. Accounting policies continued

Principal accounting policies continued

Financial instruments continued

• fair value through other comprehensive income (FVOCI): Assets that are held for

collection of contractual cash flows and for selling the financial assets, where the

assets’ cash flows represent solely payments of principal and interest, are measured

at FVOCI. Movements in the carrying amount are taken through OCI, except for the

recognition of impairment gains or losses, interest income and foreign exchange

gains and losses which are recognised in profit or loss. When the financial asset is

derecognised, the cumulative gain or loss previously recognised in OCI is reclassified

from equity to profit or loss and recognised in other gains/(losses). Interest income

from these financial assets is included in finance income using the effective interest

rate method. Foreign exchange gains and losses are presented in other gains/(losses)

and impairment expenses are presented as a separate line item in the statement of

profit or loss; and

• fair value through profit or loss (FVPL): Assets that donot meet the criteria for

amortised cost or FVOCI aremeasured at FVPL. A gain or loss on a debt investment

that is subsequently measured at FVPL isrecognised in profit or loss and presented

net within other gains/(losses) in the year in which it arises.

(i) Trade and other debtors

Trade and other debtors are recognised initially at fair value and subsequently measured

at amortised cost using the effective interest method, less provision for impairment.

Under the Company’s business model, trade debtors are held for collection of

contractual cash flows and represent solely payments of principal andinterest.

(ii) Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, deposits available on demand and

other short-term, highly liquid investments with a maturity on acquisition of three

months or less and bank overdrafts. Bank overdrafts are presented as current liabilities

to the extent that there is no right of offset or intention to offset with cash balances.

(iii) Trade payables

Trade payables are initially recognised at fair value and subsequently held at

amortisedcost.

(iv) Bank and other loans

Bank and other loans are initially recognised at fair value, net of directly attributable

transaction costs, if any, and are subsequently measured at amortised cost using the

effective interest rate method.

(v) Derivative financial instruments

The Company uses derivative financial instruments tohedge its exposure to foreign

exchange and interest rate risks arising from operating, financing and investing activities.

The Company does not hold or issue derivative financial instruments for trading purpose;

however, if derivatives do not qualify for hedge accounting, they are accounted for

assuch.

Notes to the Company financial statements continued

Year ended 30 June 2023

Financial statements

215 McBride plc Annual Report and Accounts 2023

It is the Board’s intention that any future dividends will be final dividends paid annually

in cash, not by the allotment and issue of B Shares. Consequently, the Board is not

seeking shareholder approval at the 2023 AGM to capitalise reserves for the purposes

of issuing B Shares or to grant Directors the authority to allot such shares. Existing B

Shares will continue to be redeemable but limited to one redemption date per annum

in November of each year. B Shares issued but not redeemed are classified as current

liabilities.

Own shares

Own shares represent the Company’s ordinary shares that are held by the Company in

treasury or by a sponsored ESOP trust to employee share schemes. When own shares

are acquired, the cost of purchase in the market is deducted from the profit and loss

account reserve. Gains and losses on the subsequent transfer or sale of own shares are

recognised directly in the profit and loss account.

Cash flow statement

A cash flow statement is not presented in these financial statements on the grounds that

the Company’s cash flows are included in the consolidated financial statements of the

Company and its subsidiaries.

Critical judgements and key sources ofestimationuncertainty

In applying the Company’s accounting policies as described in this note, the Directors

are required to make judgements, and estimates and assumptions, that affect the

reported amounts of its assets, liabilities, income and expenses that are not readily

identifiable from other sources. Theestimates and associated assumptions are based

on historical experience and other factors that are considered to be relevant. Actual

outcomes could differ from those estimates and affect the Company’s results in

futureyears.

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 the revision and future years if the

revision affects both current and future years.

The Directors consider that no critical judgements are made in preparing these financial

statements.

The Directors consider the following to be the key sources of estimation uncertainty

present in preparing these financial statements.

Impairment of investments and amounts owedbysubsidiary undertakings

The Directors have performed an impairment assessment of investments under IAS 36. In

light of the underlying value of the subsidiaries’ net assets, their profitability and forecast

profitability, the Directors have judged that no impairment is required (2022: £nil). An

impairment assessment of amounts owed by subsidiary undertakings as at 30June2023

was undertaken using the IFRS 9 simplified approach to measuring the expected credit

loss. The Directors have judged that no impairment is required (2022: £nil). There is no

significant risk of material adjustment to the carrying value of the investments or the

amounts owed by subsidiary undertakings within the next twelve months.

2. Accounting policies continued

Principal accounting policies continued

Share-based payments continued

For equity-settled awards, the fair value reflects market performance conditions

and all non-vesting conditions. Fair value is determined at the grant date and is not

subsequently remeasured unless the relevant conditions are modified. Adjustments

are made to the compensation expense to reflect actual and expected forfeitures due

to failure to satisfy service conditions or non-market performance conditions. For

cash-settled awards, the fair value reflects all the conditions on which the award is

madeand is remeasured at each reporting date and at the settlement date.

Generally, the capital contribution is recognised on a straight-line basis over the vesting

period. For equity-settled awards, a corresponding credit is recognised directly in

reserves, while for cash-settled awards a corresponding liability to settle is recognised

inthe balance sheet.

Taxation

Current tax is the amount of tax payable in respect of the taxable profit or loss for

the year. Taxable profit differs from accounting profit because it excludes income or

expenses that are recognised in the year for accounting purposes but are either not

taxable or not deductible for tax purposes or are taxable or not deductible in earlier or

subsequent years.

Deferred tax is recognised on temporary differences between the recognition of items

of income or expenses for accounting purposes and their recognition for tax purposes.

Adeferred tax asset in respect of a deductible temporary difference or a carried-forward

tax loss is recognised only to the extent that it is considered more likely than not that

sufficient taxable profits will be available against which the reversing temporary difference

or the tax loss can be deducted. Deferred tax assets and liabilities are not discounted.

Current and deferred tax is measured using tax rates that have been enacted or

substantively enacted at the balance sheet date.

Guarantees

From time to time, the Company provides guarantees to third parties in respect of

the indebtedness of its subsidiaries. The Directors consider these guarantees to be

insurance arrangements and, therefore, the Company recognises a liability in respect

of such guarantees only in the event that it becomes probable that the guarantee will

be called upon and the Company will be required to make apayment to the third party.

The Company has not yet performed an assessment of the impact of IFRS 17 Insurance

Contracts on these financial statements.

Payments to shareholders

Dividends paid and received are included in the Company financial statements in the

year in which the related dividends are actually paid or received or, in respect of the

Company’s final dividend for the year, approved by shareholders.

Notes to the Company financial statements continued

Year ended 30 June 2023

Financial statements

216 McBride plc Annual Report and Accounts 2023

The Directors have reviewed the recoverability of the carrying amount of the Company’s

investments and have concluded that there is no impairment in their value (2022: none).

A full list of the Company’s subsidiaries at 30 June 2023 is set out on pages 219 and 220.

Details of the share-based payments provided by the Company to employees of its

subsidiaries are presented in note 23 to the consolidated financial statements.

6. Trade and other debtors

2023

£m

2022

£m

Amounts falling due within one year

Amounts owed by subsidiary undertakings 130.4 154.4

Derivative financial instruments 3.3 0.9

Prepayments and accrued income 2.0 0.5

135.7 155.8

Amounts are unsecured and repayable on demand. Amounts owed by subsidiary

undertakings include a loan receivable of £89.3million (2022: £98.8m) which is non-interest

bearing with no fixed repayment date and Group relief receivable of £11.5million (2022:

£11.5m). All remaining amounts owed by subsidiary undertakings are interest bearing, based

on external borrowing interest rates.

7. Creditors: amounts falling due within one year

2023

£m

2022

£m

Amounts owed to subsidiary undertakings 72.0 74.6

B Shares (note 9) 0.7 0.7

Accruals and deferred income 2.1 0.7

Financial derivatives 1.5 —

Bank overdrafts 0.4 10.1

Total 76.7 86.1

Amounts owed to subsidiary undertakings include loans payable of £37.0 million

(2022:£37.0m) which are non-interest bearing with no fixed repayment date. All remaining

amounts owed to subsidiary undertakings are interest bearing, based on external borrowing

interest rates.

3. Profit for the financial year

As permitted by section 408(3) of the Act, the Company’s income statement or a

statement of comprehensive income are not presented in these financial statements.

The auditors’ remuneration for audit and other services is disclosed in note 6 of the

Group’s consolidated financial statements.

The Company’s loss for the financial year was £21.6million (2022: loss of £8.3m).

Since the year end, the Board has become aware of certain instances of technical breaches

of the Companies Act 2006 with regards to dividends made by McBride Holdings Limited

to the Company in the financial years 2016, 2017 and 2018. Since the time the breaches

were discovered, the Company and its subsidiary have undertaken rectification steps to

regularise the position. The regularisation did not require any adjustments to the financial

statements and did not have any effect on the Company’s financial position.

4. Employee information

The monthly average of full-time equivalent persons employed by the Company during

the year was as follows:

2023

Number

2022

Number

Directors 2 2

Non-Executive Directors 1 1

Total 3 3

Aggregate payroll costs were as follows:

2023

£m

2022

£m

Wages and salaries 2.2 0.9

Social security costs 0.1 0.1

Other pension costs 0.1 0.1

Total 2.4 1.1

Executive Directors’ emoluments, which are included in the above, are detailed further in

the Annual Report on Remuneration on pages 131 to 145.

5. Investments

2023

£m

2022

£m

Carrying amount

At 1 July 158.4 158.4

Additions — —

Disposals — —

At 30 June 158.4 158.4

Notes to the Company financial statements continued

Year ended 30 June 2023

Financial statements

217 McBride plc Annual Report and Accounts 2023

Movements in the number of B Shares outstanding were as follows:

2023 2022

Number

000

Nominal

value

£’000

Number

000

Nominal

value

£’000

Issued and fully paid

At 1 July 665,888 666 747, 399 747

Redeemed — — (81,511) (81)

At 30 June 665,888 666 665,888 666

B Shares carry no rights to attend, speak or vote at Company meetings, except on a

resolution relating to the winding up of the Company.

10. Provisions

2023

£m

2022

£m

At 1 July 2022 1.7 —

Utilised for the year (2.6) —

Charge for the year 1.0 1.7

At 30 June 2023 0.1 1.7

Provision for consultancy support for the independent business review programme,

expected to be utilised within twelve months.

11. Deferred tax

The elements and movements of deferred tax are as follows:

Share-based

payments

£m

Other

short-term

differences

£m

Total

£m

At 1 July 2021 0.3 0.1 0.4

Credit to income statement 0.1 — 0.1

Charge to other comprehensive income — (0.4) (0.4)

Charge to equity (0.3) — (0.3)

At 30 June 2022 0.1 (0.3) (0.2)

Credit to income statement 0.2 — 0.2

Charge to other comprehensive income — (0.4) (0.4)

Charge to equity (0.1) — (0.1)

At 30 June 2023 0.2 (0.7) (0.5)

Deferred tax assets are recognised to the extent that recovery is probable against the future

reversal of taxable temporary differences and projected taxable income. Based on the latest

profit projections, management considers the deferred tax assets to be recoverable.

7. Creditors: amounts falling due within one year continued

Financial derivatives relate to the valuation of the upside sharing, which has been identified

as an embedded derivative. The amended RCF that the Company agreed with its lender

group on 29 September 2022 includes an ‘upside sharing’ mechanism whereby a fee will

become payable by the Company to members of the lender group upon the occurrence

of an ‘exit event’. Such a fee will be determined as the percentage of any increase in the

market capitalisation of the Company from 29 September 2022 to the date of the exit event.

Avaluation has been performed using a conventional Black-Scholes pricing model with

an exit date of 31 May 2024, based on the assumption that the Company will have agreed

a new RCF arrangement at that time. Other key inputs to the model include volatility at

60.0%, GBP interest rate at 5.00% and call option strike at 23.82 pence.

8. Creditors: amounts falling due after more than one year

2023

£m

2022

£m

Bank and other loans 75.4 62.5

Deferred tax liability 0.5 0.2

Total 75.9 62.7

Bank and other loans represent amounts drawn down under a €175million RCF which is

committed until May 2026.

9. Payments to shareholders

Dividends paid and received are included in the Company financial statements in the

year in which the related dividends are actually paid or received or, in respect of the

Company’s final dividend for the year, approved by shareholders.

Under the terms of the amended RCF announced on 29 September 2022, the Company

may not, except with the consent of its lender group, declare, make or pay any dividend

or distribution to its shareholders prior to an ‘exit event’, being a change of control,

refinancing of the RCF in full, prepayment and cancellation of the RCF in full, or upon the

termination date of the RCF, being May 2026. Hence, the Board is not recommending a

final dividend for the financial year ended 30 June 2023.

No payments to ordinary shareholders were made or proposed in respect of this year or

the prior year.

Furthermore, under the RCF the Company may not, except with the consent of its lender

group, redeem or repay any of its share capital prior to an exit event. Therefore, as

intimated in the announcement dated 3 October 2022, the redemption of B shares that

would normally take place in November each year will not take place.

Notes to the Company financial statements continued

Year ended 30 June 2023

Financial statements

218 McBride plc Annual Report and Accounts 2023

15. Subsidiaries

Details of the Company’s subsidiaries at 30 June 2023 are as follows. In each case,

the Company’s equity interest is in the form of ordinary shares which, unless stated

otherwise, are indirectly owned.

The business activity of each of the Company’s trading subsidiaries is the manufacture,

distribution and sale of household and personal care products.

Subsidiaries

Equity interest

and operation

Country of

incorporation

Trading subsidiaries

McBride Australia Pty Ltd

(a)

100% Australia

McBride S.A.

(b)

100% Belgium

McBride Denmark A/S

(c)

100% Denmark

Robert McBride Ltd

(d)

100% England

McBride S.A.S.

(e)

100% France

Problanc S.A.S.

(f)

100% France

Vitherm France S.A.S.

(g)

100% France

Chemolux Germany GmbH

(h)

100% Germany

McBride Hong Kong Limited

(i)

100% Hong Kong

McBride S.p.A.

(j)

100% Italy

Chemolux S.a.r.l.

(k)

100% Luxembourg

McBride Malaysia Sdn. Bhd

(l)

100% Malaysia

Fortune Organics (F.E.) Sdn. Bhd.

(l)

100% Malaysia

McBride Nederlands B.V.

(m)

100% Netherlands

Intersilesia McBride Polska Sp. z o.o

(n)

100% Poland

McBride S.A.U.

(o)

100% Spain

Newlane Cosmetics Company Limited

(p)

100% Vietnam

Holding companies

McBride Holdings Limited

(1),

(d)

100% England

McBride Asia Holdings Limited

(i)

100% Hong Kong

McBride Hong Kong Holdings Limited

(i)

100% Hong Kong

Fortlab Holdings Sdn. Bhd.

(l)

100% Malaysia

CNL Holdings Sdn. Bhd.

(l)

100% Malaysia

12. Called-up share capital

Authorised,

allotted and fully paid

Number £m

Ordinary shares of 10 pence each

At 1 July 2021 174,242,702 17.4

Shares bought back on-market and cancelled (185,374) —

At 30 June 2022 and 30 June 2023 174,057,328 17.4

Ordinary shares carry full voting rights and ordinary shareholders are entitled to attend

Company meetings and to receive payments to shareholders.

McBride plc announced on 2 November 2020 that it would commence a share

buy-back programme of up to £12million in McBride plc ordinary shares, running from

2November2020 through to the date of the Company’s next AGM. The maximum

number of shares that could have been repurchased by the Company under the

programme was 18.3million. The purpose of the share buy-back programme was

to reduce the share capital of the Company (cancelling any shares repurchased for

this purpose). The Board believed that it was in the interests of all shareholders to

commence this programme based on the Board’s assessment that McBride plc’s share

price at the time did not reflect the value of the underlying business, which has resilient

revenue, a strong balance sheet and highly visible cash flows.

As previously announced, the Board ended the share buy-back programme during the

prior year. In the year to 30 June 2022, the Group purchased and cancelled 185,374

ordinary shares, representing 0.1% of the issued ordinary share capital as at 2 November

2020. The shares were acquired at an average price of 77.0 pence per share, with prices

ranging from 73.3 pence per share to 78.6 pence per share. The total cost of £0.1 million

was deducted from equity as the purchase of own shares. A transfer of £nil was made

from share capital to the capital redemption reserve.

At 30 June 2023, awards were outstanding over 12,231,923 ordinary shares (2022:

7,021,804 ordinary shares) in relation to the equity-settled employee share schemes that

are operated by the Company. Further information on the employee share schemes is

presented in note 23 to the consolidated financial statements.

13. Guarantees

The Company has guaranteed the indebtedness of certain of its subsidiaries up to an

aggregate amount of £0.2million (2022: £4.8m).

14. Related party transactions

Other than payments made to Directors, which are set out in the Remuneration

Committee report on pages 115 to 145 and note 5 of the consolidated financial

statements, there are no other related party transactions to disclose (2022: none). The

Company has taken the exemption available under FRS 101 not to disclose transactions

with wholly owned subsidiary companies.

Notes to the Company financial statements continued

Year ended 30 June 2023

Financial statements

219 McBride plc Annual Report and Accounts 2023

Registered offices:

(a) Level 4, 147 Collins Street, Melbourne, Victoria 3000, Australia.

(b) 6 Rue Moulin Masure, 7730 Estaimpuis, Belgium.

(d) Middleton Way, Middleton, Manchester M24 4DP, UK.

(e) 20 rue Gustave Flaubert 14590 Moyaux, France.

(f) ZAC of Saint René 45 boulevard Ambroise Croizat F-59287 Guesnain, France.

(g) Rue des Casernes, 55400 Etain, France.

(h) Heinrichstrasse 73, 40239 Düsseldorf, Germany.

(i) Unit 2001-02, 20th Floor, Prosperity Place, 6 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong.

(j) Corso Garibaldi 49, 20121 Milan, Italy.

(k) Rue de I’industrie, Foetz, Luxembourg 3895.

(l) Unit 30-01, Level 30, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan

Kerinchi, 59200 Kuala Lumpur, Malaysia.

(m) Schiphol Boulevard 359, 1118BJ Schiphol, Netherlands.

(n) Ul. Matejki 2a, 47100 Strzelce Opolskie, Poland.

(o) Polígon Industrial I’Ila, C/ Ramon Esteve 20-22, 08650 Sallent, Barcelona, Spain.

(p) 22 VSIP II, Street 1, Vietnam Singapore, Industrial Park II, Hoa Phu Ward, Thu Dau Mot City, Binh

Duong Province, Vietnam.

15. Subsidiaries continued

Subsidiaries

Equity interest

and operation

Country of

incorporation

Dormant

(2)

Breckland Mouldings Limited

(d)

100% England

Camille Simon Holdings Limited

(d)

100% England

Camille Simon Limited

(d)

100% England

Culmstock Limited

(d)

100% England

Darcy Bolton Limited

(d)

100% England

Darcy Bolton Property Limited

(d)

100% England

Darcy Limited

(d)

100% England

Detergent Information Limited

(d)

100% England

G.Garnett & Sons Limited

(d)

100% England

G.Garnett Estates Limited

(d)

100% England

Globol Properties (UK) Limited

(d)

100% England

H.H. Limited

(d)

100% England

HomePride Limited

(d)

100% England

Hugo Personal Care Limited

(d)

100% England

International Consumer Products Limited

(d)

100% England

Longthorne Laboratories Limited

(d)

100% England

McBride Aircare Limited

(d)

100% England

McBride UK Limited

(d)

100% England

McBrides Limited

(d)

100% England

Milstock Limited

(d)

100% England

RMG (Droylsden) Limited

(d)

100% England

Robert McBride (Aerosols) Limited

(d)

100% England

Robert McBride (Bradford) Limited

(d)

100% England

Robert McBride (Properties) Limited

(d)

100% England

Robert McBride Household Limited

(d)

100% England

Savident Limited

(d)

100% England

Other

Robert McBride Pension Fund Trustees Limited

(d)

100% England

(1) McBride plc directly owns 100% of McBride Holdings Limited.

(2) Dormant companies listed here are exempt from filing with the registrar individual accounts by virtue of

s448A of the Companies Act 2006.

Notes to the Company financial statements continued

Year ended 30 June 2023

Financial statements

220 McBride plc Annual Report and Accounts 2023

Group five-year summary

Year ended 30 June

2023

£m

2022

£m

2021

£m

2020

£m

2019

£m

Total revenue 889.0 678.3 682.3 706.2 743.2

Continuing revenue 889.0 678.3 682.3 706.2 721.3

Adjusted operating profit/(loss) from continuing operations 13.5 (24.5) 24.1 28.3 28.1

Amortisation of intangible assets (2.4) (2.6) (2.4) (2.1) (1.9)

Exceptional items (0.8) — (6.9) (11.1) (5.4)

Operating profit/(loss) 10.3 (27.1) 14.8 15.1 20.8

Net finance costs (25.4) (8.6) (4.2) (4. 2) (4.6)

(Loss)/profit before tax (15.1) (35.7) 10.6 10.9 16.2

Taxation 3.6 11.4 2.8 (4.4) (8.1)

Profit/(loss) after tax (11.5) (24.3) 13.4 6.5 8.1

(Loss)/earnings per share

Diluted (6.6)p (14.0)p 7.5p 3.6p 4.4p

Adjusted diluted 0.0p (11.7)p 11.7p 9.5p 9.4p

Payments to shareholders (per ordinary share) — — — 1.1p 3.3p

At 30 June

2023

£m

2022

£m

2021

£m

2020

£m

2019

£m

Non-current assets

Property, plant and equipment 117.8 122.9 129.8 134.7 136.0

Goodwill and other intangible assets 26.2 27.0 27.9 28.4 29.5

Other assets 54.6 42.9 32.9 21.1 11.6

198.6 192.8 190.6 184.2 17 7.1

Current assets 271.7 273.3 241.2 287.6 258.0

Current liabilities (283.6) (280.0) (233.5) (253.9) (237. 2)

Non-current liabilities (149.6) (129.1) (128.5) (151.0) (133.7)

Net assets

(1)

37.1 57.0 69.8 66.9 64.2

Net debt

(1)

166.5 164.4 118.4 101.5 120.9

(1) Following the adoption of IFRS 16 Leases as at 1 July 2019, leases are recognised as a right-of-use asset and a corresponding lease liability. TheGroup adopted this new standard with the modified retrospective

approach. Comparative information has not been restated and is presented, as previously reported, under IAS 17 and therefore may not be directly comparable.

221 McBride plc Annual Report and Accounts 2023

Additional information

Financial calendar

Next key dates for shareholders in 2023 and 2024:

Record date for dividend payable on B Shares

previously issued and not redeemed 20 October 2023

Annual General Meeting 20 November 2023

Dividend payments on B Shares issued and not

previously redeemed 24 November 2023

2024 Half year end 31 December 2023

2024 Half-year trading statement 16 January 2024

Interim results announced 27 February 2024

2024 Year end 30 June 2024

2024 Year-end trading statement 16 July 2024

Full-year preliminary statement 17 September 2024

These dates are provisional and may be subject to change.

Payments to shareholders

At the Company’s 2011 General Meeting, shareholders approved the issue of

non-cumulative redeemable preference shares with a nominal value of 0.1 pence each

(‘the B Shares’) as a method of making payments to shareholders. At the Company’s

2021 AGM, the Company did not put forward a resolution to approve the issue of

non-cumulative redeemable preference shares. It is the Board’s intention that any future

dividends will be final dividends paid annually in cash, not by the allotment and issue of

B Shares. The Board has agreed with its lender group that no dividends will be paid until

it is in compliance with its banking covenants. Therefore, the Board is not recommending

a final dividend in 2023.

In accordance with the terms of the B Shares scheme, any B Shares may be redeemed

immediately for cash and such a redemption would result in a payment to the redeeming

shareholder. Shareholders are able to redeem any number of their B Shares for cash.

BShares that are retained currently attract a dividend which is currently 75% of Bank of

England Base Rate on the 0.1 pence nominal value of each share, paid on a twice-yearly

basis. However, as announced on 29 September 2022, under the Company’s €175 million

RCF as amended, the Company is not permitted to redeem or repay any of its share

capital. This restriction remains in place until the original maturity date of the RCF in

May2026 and, as a result, no redemption of existing B Shares is permitted at the present

time. Once this restriction is lifted, B Shares will continue to be redeemable but limited

to one redemption date per annum, in November of each year.

Further details on B Shares can be found in the booklet entitled ‘Your Guide to B Shares’

on the Company’s website at www.mcbride.co.uk.

Shareholders who have valid mandate instructions in place may choose to have

payments made directly into their bank or building society account. Confirmation of

payment is contained in a payment advice which is posted to shareholders’ registered

addresses at the time of payment. This payment advice should be kept safely for future

reference.

Shareholders who wish to benefit from this service should complete the relevant section

of the election formaccompanying the Notice of Annual General Meeting. Alternatively,

the required documentation can be obtained by contacting the Company’s registrar

using one of the methods outlined below.

Shareholder queries

Our share register is managed by Link Group, who can be contacted:

by telephone 0371 664 0300 or on +44 371 644 0300 if calling from overseas.

Calls are charged at the standard geographic rate and will vary

by provider. Calls outside the United Kingdom will be charged

at the applicable international rate. Lines are open between

09:00 and 17:30, Monday to Friday (excluding public holidays in

England and Wales).

by email shareholderenquiries@linkgroup.co.uk

by post Link Group, Central Square, 29 Wellington Street, Leeds LS1 4DL

When writing, please indicate that you are a McBride plc shareholder.

Shareholders are also able to access and amend details of their shareholding (such as

address and distribution payment instructions), via the registrar’s website at

www.signalshares.com. If you have not previously registered to use this facility

youwillneed your investor code, which can be found on your share certificate issued

byLink Group.

ShareGift

McBride plc supports ShareGift, the share donation charity (registered charity no.

1052686). ShareGift was set up so that shareholders who have only a very small number

of shares which might be considered uneconomic to sell are able to dispose of them

by donating them for the benefit ofUK charities. Donating shares to charity gives rise

neither to a gain nor a loss for UK capital gains purposes and UK taxpayers may also be

able to claim income tax relief on the value of the donation. Even if the share certificate

has been lost or destroyed, the gift can be completed.

Further information about donating shares to ShareGift is available either from its

website at www.sharegift.org or by contacting them on +44 (0)20 7930 3737.

Useful information for shareholders

222 McBride plc Annual Report and Accounts 2023

Additional information

Useful information for shareholders continued

Online shareholder services

McBride plc provides a number of services online in the investor relations section of its

website at www.mcbride.co.uk, including:

• view and/or download annual and interim reports;

• check current or historic share prices (there is an historic share price download

facility);

• check the amounts and dates of historic payments to shareholders;

• use interactive tools to calculate the value of shareholdings and chart McBride plc

ordinary share price changes against indices; and

• register to receive email alerts regarding press releases, including regulatory news

announcements, Annual Reports and Company presentations.

Cautionary statement

This Annual Report has been prepared for the shareholders of McBride plc, as a body,

and no other persons. Its purpose is to assist shareholders of the Company to assess the

strategies adopted by the Group, the potential for those strategies to succeed and for no

other purpose. The Company, its Directors, employees, agents or advisers do not accept

or assume responsibility to any other person to whom this document is shown or into

whose hands it may come, and any such responsibility or liability is expressly disclaimed.

This Annual Report contains certain forward-looking statements that are subject

to risk factors associated with, amongst other things, the economic and business

circumstances occurring from time to time in the countries, sectors and markets in which

the Group operates. It is believed that the expectations reflected in these statements are

reasonable, but they may be affected by a wide range of variables which could cause

actual results to differ materially from those currently anticipated.

No assurances can be given that the forward-looking statements in this Strategic report

will be realised. The forward-looking statements reflect the knowledge and information

available at the date of preparation of the Strategic report and the Company undertakes

no obligation to update these forward-looking statements. Nothing in this Report shall

constitute a profit forecast.

Both the Strategic report and the Directors’ report have been prepared and presented

in accordance with the laws of England and Wales and the liabilities of the Directors

in connection with those reports shall be subject to the limitations and restrictions

provided by such law. In particular, the Directors would be liable to the Company (but

not to any third party) if the Strategic report and/or Directors’ report contain errors as a

result of recklessness or knowing misstatement or dishonest concealment of a material

fact but would not otherwise be liable.

Share price history

The following table sets out, for the five financial years to 30 June 2023, the reported

high, low, average and financial year end (30 June 2023 or immediately preceding

business day) closing middle market quotations of McBride plc’s ordinary shares on the

London Stock Exchange.

Share price (pence)

High Low Average

Financial

year end

2019 158 77 119 81

2020 89 49 66 62

2021 94 58 74 91

2022 89 16 58 16

2023 33 16 24 26

Shareholder security

The Company is required by law to make its share register publicly available. As a

consequence, shareholders may receive unsolicited mail from organisations that use

it as a mailing list. Shareholders wishing to limit the amount of such mail should either

write to Mailing Preference Service, DMA House, 70 Margaret Street, London W1W 8SS,

on 020 7291 3310. MPS is an independent organisation which offers a free service to

thepublic.

Each year in the UK shareholders lose money due to investment fraud. Investment scams

are becoming ever more sophisticated – designed to look like genuine investments,

they are increasingly difficult to spot. REMEMBER, if it sounds too good to be true, it

probably is!

If you suspect you have been approached by fraudsters, please tell the Financial

Conduct Authority using the share fraud reporting form at www.fca.org.uk/scams, where

you can find out more about investment scams. You can also call the FCA Consumer

Helpline on 0800 111 6768. If you have lost money to investment fraud, you should report

ittoAction Fraud on 0300 123 2040 or online at www.actionfraud.police.uk. Find out

more at www.fca.org.uk/scamsmart

Electronic communications

Shareholders are able to register to receive communications from McBrideplc

electronically. McBride plc encourages shareholders to elect to receive all

communications electronically, to enable more secure and prompt communication

which reduces cost and environmental impact through saving paper, mailing and

transportation.

You can register directly by visiting www.signalshares.com and following the online

instructions. Alternatively, you can access the service via the investor relations section

ofMcBride plc’s website at www.mcbride.co.uk.

Additional information

223 McBride plc Annual Report and Accounts 2023

Company’s registered office

McBride plc

Middleton Way

Middleton

Manchester M24 4DP

Telephone: +44 (0)161 203 7401

www.mcbride.co.uk

Company number: 02798634

Independent auditors

PricewaterhouseCoopers LLP

Chartered Accountants and StatutoryAuditors

1 Hardman Square

Manchester M3 3EB

Corporate brokers

Investec plc

30 Gresham Street

London EC2V 7QP

Peel Hunt LLP

7th Floor, 100 Liverpool Street

London EC2M 2AT

Registered office and advisers

Principal bankers

HSBC Bank plc

2nd Floor

Landmark

St Peter’s Square

1 Oxford Street

Manchester M1 4BP

BayernLB

Moor House

120 London Wall

London EC2Y 5ET

BNP Paribas London Branch

10 Harewood Avenue

London NW1 6AA

KBC Bank N.V.

111 Old Broad Street

London EC2N 1BR

Bank of China, London Branch

1 Lothbury

London EC2R 7DB

BBVA London Branch

Floor 44

1 Canada Square

London E14 5AA

Registrars

Link Group

Central Square

29 Wellington Street

Leeds LS1 4DL

Financial public relations advisers

Instinctif Partners Limited

65 Gresham Street

London EC2V 7NQ

Additional information

224 McBride plc Annual Report and Accounts 2023

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McBride plcAnnual Report and Accounts 2023

McBride plc

Middleton Way

Middleton, Manchester

M24 4DP, United Kingdom

Telephone: +44 (0)161 203 7401

www.mcbride.co.uk

McBride plcAnnual Report and Accounts 2023