Key Financial Highlights

Core Revenue

Total revenue from our sales of continuing Edrington branded products on a constant currency basis.

Analysis
Core revenue growth of 6% was greater than our volume growth of 3%, reflecting the improved mix of higher value products, together with the benefit of price increases.

Brand Investment

Advertising and promotional expenditure on our core brands, excluding discounts on a constant currency basis.

Analysis
Brand investment was flat versus last year and lower than planned due to the outbreak of COVID-19 and our inability to spend effectively across the last quarter. Our ratio of brand investment to core revenue was 19% in the year.

Core Contribution

Profits from our branded sales and distribution at constant currency and after the deduction of overheads.

Analysis
Core contribution is the key measure of the underlying performance of the business and the increase in the year represents strong growth from The Macallan and Brugal, together with a tight control of our operating expenses.

Earnings Before Interest and Tax* (EBIT)

EBIT is a measure of the profit generated by the business before the impact of interest, tax, minority interest charges and items deemed to be exceptional in nature.

Analysis
EBIT growth is lower than core contribution growth due to the impact of a stronger average £ during the year compared to last year.

*Before exceptional items

Free Cash Flow

Net cash flow excluding the movements in borrowings, shares, dividend payments, transformational capital expenditure and exceptional items.

Analysis
Free cash flow represents the cash the business generates after maintaining our asset base. The decrease in the year represents an increased investment in casks and maturing stocks for the future growth of our brands and increased UK tax payments due to the new tax payment structure introduced by HMRC this year.

Retained profit*

Earnings after tax and minority interests excluding exceptional items.

Analysis
Profit for the year has decreased by 1% due to an £11.6m deferred tax charge net of minority interest resulting from the reversal of the decision to reduce the UK corporation tax rate to 17%.

*Before exceptional items.

Strategic Inventories

The net book value of our maturing inventories of whisky and rum and the casks in which they are held.

Analysis
The 12% growth in strategic inventories results from our continued production of malt whisky substantially higher than current sales in order to support our projected growth over the next 12 years and beyond. The insurance and market value of our maturing whisky and rum is significantly higher than the carrying value.

Net Debt / EBITDA

The ratio of bank and private placement debt at hedged rates, where applicable, after deduction of cash balances to reported earnings before interest, tax, depreciation and amortisation.

Analysis
The 17% improvement in the ratio is driven by both an increase in our EBITDA together with a reduction in our net debt.