The expert
touch that
transforms
Tyman plc
Annual Report and Accounts
for the year ended 31 December 2021
Tyman is a leading
international supplier
of engineered fenestration
components and access
solutions to the construction
industry.
Summary Group Results
£635.7m
Revenue
2020: £572.8m
2019: £613.7m
0.9×
Leverage*
2020: 1.1×
2019: 1.7×
12.9p
Dividend per share*
2020: 4.0p
2019: 3.9p
£91.7m
Adjusted net debt*
2020: £100.6m
2019: £164.5m
£90.0m
Adjusted operating profit*
2020: £80.3m
2019: £85.4m
32.1p
Adjusted EPS*
2020: 27.2p
2019: 27.5p
£64.0m
Profit before taxation
2020: £47.6m
2019: £24.8m
25.4p
Basic EPS
2020: 19.1p
2019: 9.1p
Our new Obliq handle is stylish and sustainable,
made with 94% recycled aluminium
See case study on page 7
Summary Group Results
£635.7m
Revenue
2020: £572.8m
2019: £613.7m
0.9×
Leverage*
2020: 1.1×
2019: 1.7×
12.9p
Dividend per share*
2020: 4.0p
2019: 3.9p
£91.7m
Adjusted net debt*
2020: £100.6m
2019: £164.5m
£90.0m
Adjusted operating profit*
2020: £80.3m
2019: £85.4m
32.1p
Adjusted EPS*
2020: 27.2p
2019: 27.5p
£64.0m
Profit before taxation
2020: £47.6m
2019: £24.8m
25.4p
Basic EPS
2020: 19.1p
2019: 9.1p
* Alternative Performance Measures
provide additional information to
shareholders on the underlying
performance of the business.
A detailed description of APMs,
which have been consistently
applied throughout the report, is
included on pages 203 to 208.
Contents
See more information on our corporate
website: www.tymanplc.com
Highlights
• Strong growth against both 2020 and 2019:
• LFL revenue growth of 11% against 2019 driven by share gains,
pricing and strong market demand
• LFL adjusted operating profit up 11% against 2019 due to
revenue growth, pricing benefits and self-help activities
• Adjusted operating margin expanded to 14.2% despite dilutive
effect of cost inflation
• Adjusted EPS growth of 17% against 2019
• ROCE improvement of 250bps against 2019 to 14.5%
• Performance achieved despite industry-wide supply chain
challenges, labour constraints and input cost inflation
• Strategic initiatives yielding positive results, with good progress on
sustainability roadmap
• Further reduction in leverage to 0.9x
• Progressive dividend policy reinstated; record total dividend of
12.9p per share
Strategic report
Highlights 1
Investment case 2
Group at a glance 4
Our purpose and values 6
Our divisions 8
Our geographical reach 9
Our products 10
Our brands 12
Our business model 14
Our markets 16
Our Strategy 20
Our key performance indicators 26
Chair’s statement 30
Chief Executive’s Review 32
Operational review 34
Financial review 40
Sustainability review 46
Going concern and viability 78
Our Stakeholders 81
Principal risks and uncertainties 84
Governance and Directors’
report
Board of Directors 92
Statement of Governance 94
Nominations Committee report 102
Audit and Risk Committee report 104
Remuneration report 114
Other statutory information 138
Financial statements
Independent auditors’ report 140
Consolidated income statement 149
Consolidated statement of
comprehensive income
150
Consolidated statement of
changes in equity
151
Consolidated balance sheet 152
Consolidated cash flow statement 153
Notes to the financial statements 154
Company balance sheet 197
Company statement of
changes in equity
198
Notes to the Company
financial statements
199
Alternative Performance Measure
reconciliations
203
GRI Standard Content Index 209
Definitions and glossary of terms 211
Roundings and exchange rates 213
Five-year summary 214
Annual Report and Accounts 2021 Tyman plc 01
Favourable megatrends, differentiated
value-creation and high cash generation
support long-term growth.
Why invest in Tyman?
Favourable
Megatrends
• Global population growth and
demographic change drives
construction and remodelling
activity
• Climate change demands more
energy efficient buildings
• Increasing consumer savvy
and technology advances raise
expectations for improved
aesthetics and ease of use
• Post-pandemic changes to
lifestyles and use of homes
Read more about our marketplace on
pages 16 to 19.
Compelling customer
value-creation
• Our highly-engineered products
create strong value for customers
and end-users relative to their cost
• Our market-leading brands,
extensive portfolio of differentiated
products, and innovation
capabilities make us a strategic
partner for our customers
• Our value-added services, including
co-development, application
engineering, integrated supply
chain and accredited testing,
underpin our long-term customer
relationships and high levels of
repeat business
Read more about our products and
brands on pages 10 to 12.
Sustainable growth
potential
• We have high barriers to entry
as a result of our deep customer
relationships, the heritage and
reputation of our brands, our
extensive product and application
expertise and world-class facilities
across our global footprint
• Our scale allows us to continually
invest in our organic growth
through innovation and operational
excellence
• Our high levels of cash generation
and strong balance sheet provide
funding flexibility for future
expansion, including further
acquisitive growth with Tyman
the natural consolidator in a
fragmented industry
• Our diversification across
geographies and commercial
and residential markets provides
resilience against major changes in
the market environment
Read more about our divisions
and geographical reach
on pages 8 and 9.
Tyman plc02 Annual Report and Accounts 2021
Investment case
Tyman plc 03
STRATEGIC REPORT
Annual Report and Accounts 2021
A purpose-led business
The origins of Tyman’s businesses date back to 1838. Over many years, employees have worked to
build the platform that we have today of market-leading brands, differentiated products supported
by value-added services, deep customer relationships, all underpinned by our domain expertise
and global scale.
Our purpose, values and Code of Business Ethics are the building blocks of our culture, creating a shared sense of identity
across our employees that is essential for our success. Our strategy is guided by our purpose and will deliver a set of
outcomes aligned to our stakeholder interests, against which we measure success and link our performance with purpose.
This will create long-term value for all our stakeholders.
1 2 3
Our purpose
Our purpose is at the core of
everything we do, unifying us in a
common cause and growth strategy.
It inspires Tyman people to make a
positive contribution every day.
Read about our purpose on page 6.
Our values
Our values guide our decisions
and actions every day. They are
the foundation of our success and
essential to achieving our purpose.
Read about our values on page 6.
Our strategy
Our Focus, Define, Grow strategy
is guided by our purpose and
underpinned by our sustainability
roadmap. It will deliver a set of
strategic outcomes, creating long-
term value for all our stakeholders.
Read about our strategy on pages 20
to 25.
Tyman plc04 Annual Report and Accounts 2021
Group at a glance
4 5
Our stakeholders
Our stakeholders each play an
important role in the delivery of our
strategy. Actively engaging with our
stakeholders is vital to the Group’s
success and the interests of all
stakeholders are considered in key
decisions.
Read about our stakeholders on pages
81 to 83.
Our KPIs
The success of our strategy is
measured through a set of financial
and non-financial KPIs, linking our
performance with purpose.
Read about our KPIs on pages 26 to 28.
Annual Report and Accounts 2021 Tyman plc 05
STRATEGIC REPORT
Our purpose
Our purpose is at the core of everything we do, unifying us in a common cause and growth strategy. It is the essence of us
at our best and inspires Tyman people to make a positive contribution every day.
Millions are kept safe and comfortable at home and
at work around the world because of our expertise.
We know that to be experts, we must have deep
understanding of our customers and their needs, an
uncompromising commitment to both safety and quality,
and a restless ambition to innovate. We never forget that
experts are people: growing and energising our talent is
at the heart of what makes us different.
With our expertise, we have the power to transform what
we touch. We commit to transform living and working
spaces, to transform people and careers, to transform
the value of our businesses, and to transform our impact
on communities and society.
Our purpose is to transform
the security, comfort and
sustainability of living and
working spaces through our
expert touch.
Tyman. The expert touch
that transforms.
Read more about our products on pages 10 and 11 and our business model on pages 14 and 15.
Our values
Our values frame how we work with each other and with our partners, and will shape the culture of Tyman. They are
the foundation of our success and essential to achieving our purpose. Our Code of Business Ethics, ‘Integrity in action’
embodies these values, laying out the expected standards of behaviour that all our employees must adhere to.
Read more about our Code of Business Ethics on page 59.
Our purpose and values
Do the right thing
Integrity is the cornerstone
of our business
• We demand transparency,
and we always do what it
takes to build or repair trust
• We value, respect and look
out for each other, and we
are strongest when we are
most diverse
• We speak up and take care to
listen, because every voice matters
Never stop growing
There is no limit to what we can achieve
• We take every opportunity to learn and
develop, professionally and personally
• Every day we make the continuous
improvements which people deserve
from us
• We believe in the power of creativity to
break through with new thinking, new
ideas, new solutions
Make it happen
We are action people
• We behave like owners, always
ready to hold ourselves and
others to account
• Inclusive teamwork creates our
best results
• We take pride in bringing
positive energy to our work,
and our performance is fed by
our passion
The Tyman Touch
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Tyman plc06 Annual Report and Accounts 2021
Group at a glance continued
Scan the QR code to read more
Case studies on our website.
The challenge
Momentum behind the sustainability agenda continues to
grow, with demand for products that are sustainable without
compromising on function and aesthetics increasing. The
market trend towards a minimalist aesthetic also continues to
grow. The Reguitti product team therefore sought to create
a range of minimalist handles with strong sustainability
credentials to address these market trends and contribute to
the Group’s goal of reducing Scope 3 carbon emissions.
The solution
The Reguitti team explored a range of designs and
materials and assessed the lifecycle carbon footprint of
each design, resulting in the Obliq range of door handles.
The Obliq handle is made with 94% recycled aluminium,
a material which can be reused infinitely. The rosette is
fully integrated within the handle, reducing components
and material weight, while creating an elegant aesthetic in
line with the minimalist hardware trend. The spring-load
assembly system and finishes are tested and certified to
high European standards of quality, including salt spray
corrosion resistance.
Value created
The Obliq has a carbon footprint which is 63% lower than a
standard zinc alloy door handle rosette design with c.20%
recycled content and 55% less than an equivalent brass
handle design. The product received a ‘Special Mention for
Sustainability’ at the Archiproducts Design Awards 2021.
The handle assists door manufacturers and consumers in
meeting their sustainability goals, while maintaining high
performance, aesthetics and ergonomics.
Obliq handle –
stylish and sustainable
Case Study
Annual Report and Accounts 2021 Tyman plc 07
STRATEGIC REPORT
North America UK & Ireland International
Our divisions
regional divisions. Headquartered in London, the Group employs approximately 4,200 people, with facilities in 16
countries worldwide.
Our customer base ranges from large OEMs, where we are often integrated into their product design and development
processes and supply chains, through to distributors/retailers, where our strong trade brands are of key importance
given their reputation for quality and innovation with installers, architects and end consumers. Our access solutions
portfolio also serves specifiers of construction projects and contractors.
Read more about our brands on page 12.
AmesburyTruth is Tyman’s division
operating in North America
ERA is Tyman’s division operating in
the UK and Ireland
SchlegelGiesse is Tyman’s division
operating in continental Europe and
the rest of world
Routes to market Routes to market Routes to market
Manufacturers
of doors and
windows 79%
Distributors and
wholesalers 18%
Other 3%
Manufacturers
of doors and
windows 58%
Distributors and
wholesalers 36%
Other 6%
Manufacturers
of doors and
windows 68%
Distributors and
wholesalers 30%
Other 2%
Residential Commercial Residential Commercial Residential Commercial
87% 13% 72% 28% 77% 23%
Manufacturing
sites
Distribution
sites
Manufacturing
sites
Distribution
sites
Manufacturing
sites
Distribution
sites
10 1 3 1 6 9
Brands Brands Brands
Employees Employees Employees
2,900 420 820
Revenue Revenue Revenue
£397.7m £105.8m £132.2m
(2020: £372.1m) (2020: £92.2m) (2020: £108.4m)
Adjusted operating profit Adjusted operating profit Adjusted operating profit
£65.1m £14.8m £19.5m
(2020: £64.5m) (2020: £8.8m) (2020: £12.3m)
Tyman plc08 Annual Report and Accounts 2021
Group at a glance continued
Our geographical reach
North America UK and Ireland
Key
Manufacturing site
Manufacturing HQ
Warehouse site
Office
Office HQ
Where our products are sold
US 55%
UK 17%
Canada 6%
Italy 5%
Other 17%
Where our products are manufactured
US 33%
Far East (inc China) 28%
Mexico 16%
Italy 12%
UK 6%
Other 5%
Annual Report and Accounts 2021 Tyman plc 09
STRATEGIC REPORT
Our products
Comfort
• Ventilation
• Weather resistance
• Sound insulation
• Ease of use
Sustainability
• Energy efficiency of buildings
• Longevity of buildings
Security
• Locking/deterrent
• Monitoring
• Remote and timebound access
Safety
• Fall prevention
• Hurricane solutions
• Lockdown
• Safe access
Aesthetics
• Look
• Feel
• Suiting
Who we sell to
Manufacturers of doors and
windows 74%
Distributors and wholesalers 23%
Other 3%
What we sell
Window and door hardware 74%
Seals and extrusions 17%
Commercial access solutions 10%
Read more about our value creation in
the business model on pages 14 and 15
The Group offers a broad range of differentiated, highly-engineered products supported by
value-added services and holds over 555 active patents with a further 111 pending.
The portfolio covers all aspects of the hardware and sealing solutions required for doors and windows, and a full
suite of solutions for roof, wall and floor access in residential and commercial buildings.
Tyman plc10 Annual Report and Accounts 2021
Group at a glance continued
Seals and extrusions
Products
Window and internal/external door seals and other
extrusions.
Value to the customer
Comfort through weather resistance and sound
insulation; sustainability through durability of materials;
energy saving; aesthetics through concealed seal
designs.
Access solutions
Products
Solutions for roof, floor/pavement, and wall access (riser
doors), including associated safety products (e.g. ladders,
railings) and emergency barricade solutions.
Value to the customer
Comfort through ventilation, weather resistance and sound
insulation; safety and security through suite of lock and
barrier products; sustainability through durability of product
solutions.
Window and door hardware
Products
Integrated opening, closing and locking systems for all
types of window (casement and sliding/sash) and door
(including patio and bi-fold). Associated decorative
hardware and smart entry and monitoring solutions
(electronic access products, sensors, alarms, indoor/outdoor
cameras and associated services).
Value to the customer
Comfort through ventilation and ease of use; sustainability
through energy efficiency and durable designs; security
through various locking (including remote and timebound
access), alarm and monitoring solutions, and safety
hardware; aesthetics through look, feel and suiting of
product ranges and in concealed hardware designs where
appropriate.
Annual Report and Accounts 2021 Tyman plc 11
STRATEGIC REPORT
Our brands
Our brands are all highly-regarded leaders in their respective market segments. Together they
represent almost 1,000 years of innovation, quality and service for our customers.
Commercial access
solutions for the roof,
wall and floor. Access360
was formed in 2018 from
the Howe Green, Profab
and Bilco UK brands
Window and door
hardware and seals.
The Amesbury and Truth
brands were harmonised
in 2014
Window and door
hardware
Smoke vents, roof
access hatches and
pavement doors
Established
Bilco (1926)
Howe Green (1983)
Profab (2001)
Established
Truth (1914)
Amesbury (1978)
Established
1932
Established
1926
Security hardware
including electronic
security systems and
services
Decorative hardware Hardware for aluminium
windows and doors
Decorative door
hardware
Established
1838
Established
1989
Established
1965
Established
1890 (Formerly JADO)
Key user
Residential
Commercial
Division
North America
UK and Ireland
International
Product category
Window and door
hardware
Seals and
extrusions
Commercial
access solutions
Decorative door
hardware
Window and door seals
and extrusions
Door hardware for
architectural ironmongers
Established
1975
Established
1885
Established
2011
Tyman plc12 Annual Report and Accounts 2021
Group at a glance continued
Collaborating to improve
the customer experience
ERA manufactures hardware for sash windows from its
Wolverhampton site in the UK. Our AmesburyTruth brand in
the US is also a leader in balance design and manufacture,
producing 70% of the Group’s balances volume.
The challenge
Sash (or vertical sliding) windows have increased in
popularity in the UK over the past few years due to
their aesthetic appeal, particularly as consumers seek to
preserve the traditional features of their properties. The
key component to smooth operation of sash windows is the
vertical sliding balance. Windows without high-performing
balances can be sticky, noisy and feel heavy to open and
close, which can be a particular challenge for older people.
The solution
The ERA product team drew on the expertise of the
AmesburyTruth team to design a new vertical sliding
window balance for the UK market. Working together, the
team went back to basics with a new design approach,
alternative balance materials and production methods
to create a better quality and more reliable product that
requires a lower operating force and ensures a quieter,
smoother operation. To validate the improved performance,
partner customers were involved in an extensive testing
programme.
The new balance comes in a broad range of parameters
to support a wide range of window dimensions. To aid
selection of the most appropriate balance for a particular
window, ERA created a software solution that determines
the optimal operating forces for the window.
Value created
The TrueGlide
TM
balance provides window manufacturers
with a higher quality and more reliable product, with the
software enabling an accurate match to each window
size and also improving the efficiency of the quoting and
ordering process. For end-users, the new design makes the
window easier and quieter to open and close, helping to
support independent living.
Case Study
The new TrueGlide balances have greatly
improved the performance, quality and overall
feel of our vertical sliding windows, making
them smoother and quieter to operate for our
customers.”
Steve Cardwell
Production Manager,
Warwick Development Specialist Division
Scan the QR code to read more
Case studies on our website.
Annual Report and Accounts 2021 Tyman plc 13
STRATEGIC REPORT
Our business model
We use our valuable resources to create long-term, sustainable value for all our stakeholders.
Our resources are carefully selected and developed to create
competitive advantage…
… that allows us to undertake differentiated activities that address customer needs… … that together create value for
our stakeholders.
Deep customer relationships
We work with our customers
to understand their unique
requirements in terms of the
offer they require and how they
wish to be served, making us the
partner of choice across many
channels to market. These long-
term relationships bring high
levels of repeat business and a
customer intimacy that allows us
to continuously improve the value
we bring.
Leading brands
Our portfolio of complementary
brands have market-leading positions
predicated on the innovation,
quality and service they deliver
for our customers, as evidenced
through their long heritage. In some
cases, the reputation of our brands
is so strong with the end-users
that the brand name has become
synonymous with the category name.
Experienced and
committed workforce
We have a highly-skilled, dedicated
workforce of c.4,200 personnel
around the world, together
creating unparalleled knowledge of
engineered fenestration components
and access solutions technologies
and applications. Our people are at
the heart of our ability to deliver
innovation, quality and service to our
customers.
Strategic supplier partnerships
We carefully supplement our
internal capabilities with select
specialisms through external
collaborations, allowing
us to deliver the best in
innovation, quality and service
to our customers in the most
efficient way.
Global footprint
Our global scale allows us to
sustain and further develop a
rich portfolio of products and
technologies that support our
customers’ needs, while having
the presence and agility to
respond quickly to the specifics
of local markets.
Strong balance sheet
Our portfolio attracts high
margins due to its competitive
advantages and a strong focus
on margin expansion initiatives.
Asset optimisation and disciplined
management of capital investment
drive significant cash generation.
The resulting balance sheet
strength and debt capacity creates
a virtuous circle that will allow
Tyman to make investments
that drive further organic and
acquisitive growth for years
to come.
Customers
We deliver highly-engineered components
that allow window and door manufacturers
to differentiate in their marketplace
with value-enhanced windows, doors
and other forms of access solution. In
addition, Tyman delivers industry-leading
services to these customers ranging
from design support to integrated supply
of components into window fabrication
processes. Our products are also
designed to ensure ease of installation for
contractors, and our short lead times and
technical support allow our distributors to
serve their customers in the best way.
End-users
Relative to their cost point, our products
and solutions have a disproportionate
impact on the comfort, sustainability,
security, safety and aesthetics of residential
homes and commercial buildings.
Read more about our products
on pages 10 and 11.
Employees
Tyman invests in its people through
employee training, career path
development and continual improvement
of working practices and conditions.
Partners
Our strategic suppliers benefit from long-
term, fair partnerships with development
of their business practices and capabilities.
Investors
We strive to continually deliver increased
shareholder value through a mix of
both capital appreciation and dividend
distributions, made possible through our
growth in earnings and financial strength
as we deliver on our strategy.
Society
Our products support making buildings
more sustainable by enabling weather-
resistance, sound insulation, heat loss
reduction and overall durability. Many
products have a positive societal impact,
through reducing community crime rates,
enhancing safety and fire protection and
meeting the needs of vulnerable groups.
As a Group, we are also committed to
minimising our impact on our environment
through more deeply embedding
sustainable practices in all our operations.
Read more about sustainability
on pages 46 to 77.
Design
At the core of our capabilities is our
ability to understand our customers’ and
end-users’ needs and translate these into
innovative solutions that add genuine
and relevant value to living and working
spaces. This innovation is reflected in our
extensive portfolio of standard products
addressing all aspects of engineered
fenestration components and access
solutions for the construction industry.
In addition, we collaborate with
customers on the development of new
window and door designs, leveraging our
deep product and application expertise
to create bespoke hardware and sealing
solutions that create true value for
end-users. For window and door system
designers, we offer our hardware system
design capabilities and deliver drawings
and bills of materials for both their
standard solutions and bespoke projects.
For commercial building and
infrastructure projects, we work with
architects and specifiers to help them
select and design in the right access
solutions, bringing custom sizing or
other capabilities as required.
In all cases, our leading-edge testing
facilities and accreditations are a key
component of ensuring that our products
deliver the quality and durability that
our customers expect of them, allowing
our customers to assure their users of
the same for their installed windows,
doors and access solutions.
Make/source
Our goal is always to provide our
customers with the right product,
delivered at the right time, at the
right price.
Our size affords us economies
of scale in the procurement
of base commodity materials
such as stainless steel, zinc,
aluminium, polypropylene and
also outsourced manufactured
components.
We manufacture in our world class
facilities where this aligns with
our core capabilities. Our global
footprint and network of extensive
supplier partnerships also allow us
unparalleled flexibility to deliver
locally when close-coupling with
our customers’ supply chains
is required, or from a distance
where more standardised
production is possible and
economics are more important.
Deliver
We are continually looking to
develop and optimise our routes
to market to effectively meet the
evolving demands of our industry
around the world.
For our direct relationships
with large window and door
manufacturers, we embed with their
operations, supplying just-in-time,
sequenced components to their
production lines.
We also serve specialist distributors
and merchants who supply
smaller manufacturers, system
design companies, architects and
construction contractors. We excel
at delivering to these customers on
the short lead-times they routinely
require. We also provide training
and technical support to give
them the product and application
knowledge to best serve their
customers.
For large commercial building and
infrastructure projects, we ship
direct to site and then support
with on-site technical support as
required.
Our growing smartware offer
requires new routes to market and
we have developed and trained a
network of accredited installers to
support homeowners with a leading-
edge security proposition.
Key resources and relationships Key activities
Innovation
Tyman plc14 Annual Report and Accounts 2021
Group at a glance continued
Our resources are carefully selected and developed to create
competitive advantage…
… that allows us to undertake differentiated activities that address customer needs… … that together create value for
our stakeholders.
Deep customer relationships
We work with our customers
to understand their unique
requirements in terms of the
offer they require and how they
wish to be served, making us the
partner of choice across many
channels to market. These long-
term relationships bring high
levels of repeat business and a
customer intimacy that allows us
to continuously improve the value
we bring.
Leading brands
Our portfolio of complementary
brands have market-leading positions
predicated on the innovation,
quality and service they deliver
for our customers, as evidenced
through their long heritage. In some
cases, the reputation of our brands
is so strong with the end-users
that the brand name has become
synonymous with the category name.
Experienced and
committed workforce
We have a highly-skilled, dedicated
workforce of c.4,200 personnel
around the world, together
creating unparalleled knowledge of
engineered fenestration components
and access solutions technologies
and applications. Our people are at
the heart of our ability to deliver
innovation, quality and service to our
customers.
Strategic supplier partnerships
We carefully supplement our
internal capabilities with select
specialisms through external
collaborations, allowing
us to deliver the best in
innovation, quality and service
to our customers in the most
efficient way.
Global footprint
Our global scale allows us to
sustain and further develop a
rich portfolio of products and
technologies that support our
customers’ needs, while having
the presence and agility to
respond quickly to the specifics
of local markets.
Strong balance sheet
Our portfolio attracts high
margins due to its competitive
advantages and a strong focus
on margin expansion initiatives.
Asset optimisation and disciplined
management of capital investment
drive significant cash generation.
The resulting balance sheet
strength and debt capacity creates
a virtuous circle that will allow
Tyman to make investments
that drive further organic and
acquisitive growth for years
to come.
Customers
We deliver highly-engineered components
that allow window and door manufacturers
to differentiate in their marketplace
with value-enhanced windows, doors
and other forms of access solution. In
addition, Tyman delivers industry-leading
services to these customers ranging
from design support to integrated supply
of components into window fabrication
processes. Our products are also
designed to ensure ease of installation for
contractors, and our short lead times and
technical support allow our distributors to
serve their customers in the best way.
End-users
Relative to their cost point, our products
and solutions have a disproportionate
impact on the comfort, sustainability,
security, safety and aesthetics of residential
homes and commercial buildings.
Read more about our products
on pages 10 and 11.
Employees
Tyman invests in its people through
employee training, career path
development and continual improvement
of working practices and conditions.
Partners
Our strategic suppliers benefit from long-
term, fair partnerships with development
of their business practices and capabilities.
Investors
We strive to continually deliver increased
shareholder value through a mix of
both capital appreciation and dividend
distributions, made possible through our
growth in earnings and financial strength
as we deliver on our strategy.
Society
Our products support making buildings
more sustainable by enabling weather-
resistance, sound insulation, heat loss
reduction and overall durability. Many
products have a positive societal impact,
through reducing community crime rates,
enhancing safety and fire protection and
meeting the needs of vulnerable groups.
As a Group, we are also committed to
minimising our impact on our environment
through more deeply embedding
sustainable practices in all our operations.
Read more about sustainability
on pages 46 to 77.
Design
At the core of our capabilities is our
ability to understand our customers’ and
end-users’ needs and translate these into
innovative solutions that add genuine
and relevant value to living and working
spaces. This innovation is reflected in our
extensive portfolio of standard products
addressing all aspects of engineered
fenestration components and access
solutions for the construction industry.
In addition, we collaborate with
customers on the development of new
window and door designs, leveraging our
deep product and application expertise
to create bespoke hardware and sealing
solutions that create true value for
end-users. For window and door system
designers, we offer our hardware system
design capabilities and deliver drawings
and bills of materials for both their
standard solutions and bespoke projects.
For commercial building and
infrastructure projects, we work with
architects and specifiers to help them
select and design in the right access
solutions, bringing custom sizing or
other capabilities as required.
In all cases, our leading-edge testing
facilities and accreditations are a key
component of ensuring that our products
deliver the quality and durability that
our customers expect of them, allowing
our customers to assure their users of
the same for their installed windows,
doors and access solutions.
Make/source
Our goal is always to provide our
customers with the right product,
delivered at the right time, at the
right price.
Our size affords us economies
of scale in the procurement
of base commodity materials
such as stainless steel, zinc,
aluminium, polypropylene and
also outsourced manufactured
components.
We manufacture in our world class
facilities where this aligns with
our core capabilities. Our global
footprint and network of extensive
supplier partnerships also allow us
unparalleled flexibility to deliver
locally when close-coupling with
our customers’ supply chains
is required, or from a distance
where more standardised
production is possible and
economics are more important.
Deliver
We are continually looking to
develop and optimise our routes
to market to effectively meet the
evolving demands of our industry
around the world.
For our direct relationships
with large window and door
manufacturers, we embed with their
operations, supplying just-in-time,
sequenced components to their
production lines.
We also serve specialist distributors
and merchants who supply
smaller manufacturers, system
design companies, architects and
construction contractors. We excel
at delivering to these customers on
the short lead-times they routinely
require. We also provide training
and technical support to give
them the product and application
knowledge to best serve their
customers.
For large commercial building and
infrastructure projects, we ship
direct to site and then support
with on-site technical support as
required.
Our growing smartware offer
requires new routes to market and
we have developed and trained a
network of accredited installers to
support homeowners with a leading-
edge security proposition.
Key activities Value created
Quality Service
Annual Report and Accounts 2021 Tyman plc 15
STRATEGIC REPORT
Our markets
The Group continuously assesses changes to market drivers and responds through product
innovation and evolution of the business model.
Long-term macroeconomic and megatrends continue to support our market drivers. There are a number of trends that
have emerged or been accelerated as a result of the pandemic which present significant further opportunities for Tyman.
The Group is well-positioned to capitalise on these and deliver further growth.
Megatrend Market driver
Residential/
commercial Impact
How we are
responding Value proposition
1
Urbanisation
Rapid urbanisation continues, creating larger
megacities and swelling the size of mid-sized
regional cities.
• Growth in the construction of multi-
family homes and conversion of
industrial spaces to residential near the
centre of major cities.
• Increasing range of products with light-
commercial application.
In contrast to rapid urbanisation, COVID-19 has
resulted in more time being spent at home, with the
home-working trend being amplified. This has led to
people seeking more space and necessitating more
flexible living spaces.
• Growth in new build and repair and
remodelling activity, particularly
favouring single-family construction, to
which the Group is most exposed.
• Capitalising on our strength in this
market through continued development of
differentiated products.
2
Demographics
and social
change
Global population growth continues and there
is insufficient affordable housing stock. This is
particularly acute in the US, where residential
housing starts remain significantly below previous
cycle peaks and the long-run averages required to
sustain the population.
• Creating demand for quality building
products at lower prices.
• Development of differentiated, value-
engineered products and removal of waste
from supply chains, including focus on
efficiency in fabrication and installation
processes.
Mature economies are typically experiencing
demographic shifts to ageing populations in contrast
to growing youth populations in emerging markets.
Ageing populations are placing increased emphasis
on the need for inclusive ‘lifetime homes’.
• Increased demand for disability and
connected care products and products
that are easy to use.
• Emphasis on ‘ease of use’ in the
development of products.
• Expansion of range of automated and
assisted opening products.
Growing middle-class populations, supported by good
employment levels, low mortgage interest rates, and
wage increases.
• Promoting increased demand for more
premium fenestration products.
• Customised hardware and sealing sets for
premium fenestration types, prioritising
high security and minimal design so as not
to disrupt the overall aesthetic.
Design trends and increased focus on wellbeing are
driving desire for increased natural light.
• Trends are driving demand for larger
expanses of glass and minimal frames,
which require specialist seal and
hardware products.
• Development of seals and hardware that
support heavier and higher performing
glass packages.
Labour shortages across construction markets
leading to increased construction wages.
Rising material costs and supply chain disruptions
in the wake of COVID-19 are also significantly
increasing construction costs and putting pressure on
lead times.
• Rising costs are driving a need to find
savings elsewhere within a project,
increasing demand for quality products
at lower prices and those that are
efficient to install.
• Supply chain disruptions are emphasising
the need for flexible, robust supply
solutions.
• Development of differentiated, value-
engineered products and removal of waste
from supply chains, including focus on
efficiency in installation processes.
• Enhancing manufacturing and sourcing
redundancy and further developing flexible
supply initiatives for customers.
Residential Commercial
Key
Tyman plc16 Annual Report and Accounts 2021
Group at a glance continued
Megatrend Market driver
Residential/
commercial Impact
How we are
responding Value proposition
1
Urbanisation
Rapid urbanisation continues, creating larger
megacities and swelling the size of mid-sized
regional cities.
• Growth in the construction of multi-
family homes and conversion of
industrial spaces to residential near the
centre of major cities.
• Increasing range of products with light-
commercial application.
In contrast to rapid urbanisation, COVID-19 has
resulted in more time being spent at home, with the
home-working trend being amplified. This has led to
people seeking more space and necessitating more
flexible living spaces.
• Growth in new build and repair and
remodelling activity, particularly
favouring single-family construction, to
which the Group is most exposed.
• Capitalising on our strength in this
market through continued development of
differentiated products.
2
Demographics
and social
change
Global population growth continues and there
is insufficient affordable housing stock. This is
particularly acute in the US, where residential
housing starts remain significantly below previous
cycle peaks and the long-run averages required to
sustain the population.
• Creating demand for quality building
products at lower prices.
• Development of differentiated, value-
engineered products and removal of waste
from supply chains, including focus on
efficiency in fabrication and installation
processes.
Mature economies are typically experiencing
demographic shifts to ageing populations in contrast
to growing youth populations in emerging markets.
Ageing populations are placing increased emphasis
on the need for inclusive ‘lifetime homes’.
• Increased demand for disability and
connected care products and products
that are easy to use.
• Emphasis on ‘ease of use’ in the
development of products.
• Expansion of range of automated and
assisted opening products.
Growing middle-class populations, supported by good
employment levels, low mortgage interest rates, and
wage increases.
• Promoting increased demand for more
premium fenestration products.
• Customised hardware and sealing sets for
premium fenestration types, prioritising
high security and minimal design so as not
to disrupt the overall aesthetic.
Design trends and increased focus on wellbeing are
driving desire for increased natural light.
• Trends are driving demand for larger
expanses of glass and minimal frames,
which require specialist seal and
hardware products.
• Development of seals and hardware that
support heavier and higher performing
glass packages.
Labour shortages across construction markets
leading to increased construction wages.
Rising material costs and supply chain disruptions
in the wake of COVID-19 are also significantly
increasing construction costs and putting pressure on
lead times.
• Rising costs are driving a need to find
savings elsewhere within a project,
increasing demand for quality products
at lower prices and those that are
efficient to install.
• Supply chain disruptions are emphasising
the need for flexible, robust supply
solutions.
• Development of differentiated, value-
engineered products and removal of waste
from supply chains, including focus on
efficiency in installation processes.
• Enhancing manufacturing and sourcing
redundancy and further developing flexible
supply initiatives for customers.
Comfort Sustainability Security Safety
Key
Aesthetics
Annual Report and Accounts 2021 Tyman plc 17
STRATEGIC REPORT
Our markets continued
Megatrend Market driver
Residential/
commercial Impact
How we are
responding Value proposition
3
Regulation /
certification
Building codes and product certifications are getting
stricter, including enhanced fire safety standards
within building codes.
• Increased demand for products with
certifications and accreditations,
spanning windows, doors and access
solutions.
• Growing ‘whole solution’ certification
increasing emphasis of OEM channel.
• Growing range of passive fire protection
products across hardware and seals
to support door manufacturers in fire
regulation compliance.
• Increased focus on system house
partnerships and bespoke solutions.
• Growing range of emergency smoke venting
products for commercial use as well as a
range of fire-certified products.
• Further development of safety product
range, including child locks, hurricane
solutions, and barricades.
4
Sustainability
Increasing momentum behind the sustainability
agenda driving focus on resource efficiency including
the need for energy-efficient buildings and circular
economy. This momentum is driven by increasing
consumer awareness, increasing regulation, and
certain government incentives.
• Growth in repair and remodelling activity
to improve energy efficiency of homes.
Increased demand for products that
have a positive environmental and/
or social impact, that are sustainably
manufactured and packaged.
• Continuous focus on development of
solutions that deliver positive environmental
and/or social impact.
• Promoting the enhanced energy efficiency
attributes of products e.g. Tyman foam
sealing range in contrast to lower-cost
alternatives.
• Enhancing sustainable manufacturing
processes and sourcing.
• Expanding range of products with
sustainability certifications e.g. C2C and
development of sustainable packaging.
• Development of thermally-broken
commercial access products.
COVID-19 has increased awareness of surface
hygiene.
• Increased demand for products that
improve surface hygiene.
• Development of products with anti-germ
coatings and touch-free opening.
5
Technology
and
digitalisation
Technology is creating new ways of living and
working; even traditional sectors are experiencing
changes in customer expectations driven by the
way consumers are accustomed to being serviced
elsewhere. This is driving growth in smart buildings
and connected homes.
• Increasing demand for smart home
security and electro-mechanical
fenestration products.
• Expansion of residential smart security
range that meets the internationally
recognised BSI Kitemark for IoT Devices.
• Development of electro-mechanical
products.
• Enhancing range of actuated commercial
access products.
New technologies making refined industrial design a
consumer expectation in many product categories.
• Increased demand for products that are
not only functional, but also enhance the
aesthetics of living spaces.
• Enhanced industrial design and emphasis
on creating matching ‘suites’ of products.
• Further extensions to minimalist hardware
ranges.
The adoption of e-commerce and digitalisation has
been accelerated due to the impact of COVID-19.
• Increased demand for digitalisation
throughout the supply chain and
opportunity through emerging direct-to-
consumer channel.
• Development of e-commerce capabilities,
allowing direct-to-consumer sales where
appropriate.
• Enhancement of IT systems to improve
digitalisation of the supply chain.
Residential Commercial
Key
Tyman plc18 Annual Report and Accounts 2021
Group at a glance continued
Megatrend Market driver
Residential/
commercial Impact
How we are
responding Value proposition
3
Regulation /
certification
Building codes and product certifications are getting
stricter, including enhanced fire safety standards
within building codes.
• Increased demand for products with
certifications and accreditations,
spanning windows, doors and access
solutions.
• Growing ‘whole solution’ certification
increasing emphasis of OEM channel.
• Growing range of passive fire protection
products across hardware and seals
to support door manufacturers in fire
regulation compliance.
• Increased focus on system house
partnerships and bespoke solutions.
• Growing range of emergency smoke venting
products for commercial use as well as a
range of fire-certified products.
• Further development of safety product
range, including child locks, hurricane
solutions, and barricades.
4
Sustainability
Increasing momentum behind the sustainability
agenda driving focus on resource efficiency including
the need for energy-efficient buildings and circular
economy. This momentum is driven by increasing
consumer awareness, increasing regulation, and
certain government incentives.
• Growth in repair and remodelling activity
to improve energy efficiency of homes.
Increased demand for products that
have a positive environmental and/
or social impact, that are sustainably
manufactured and packaged.
• Continuous focus on development of
solutions that deliver positive environmental
and/or social impact.
• Promoting the enhanced energy efficiency
attributes of products e.g. Tyman foam
sealing range in contrast to lower-cost
alternatives.
• Enhancing sustainable manufacturing
processes and sourcing.
• Expanding range of products with
sustainability certifications e.g. C2C and
development of sustainable packaging.
• Development of thermally-broken
commercial access products.
COVID-19 has increased awareness of surface
hygiene.
• Increased demand for products that
improve surface hygiene.
• Development of products with anti-germ
coatings and touch-free opening.
5
Technology
and
digitalisation
Technology is creating new ways of living and
working; even traditional sectors are experiencing
changes in customer expectations driven by the
way consumers are accustomed to being serviced
elsewhere. This is driving growth in smart buildings
and connected homes.
• Increasing demand for smart home
security and electro-mechanical
fenestration products.
• Expansion of residential smart security
range that meets the internationally
recognised BSI Kitemark for IoT Devices.
• Development of electro-mechanical
products.
• Enhancing range of actuated commercial
access products.
New technologies making refined industrial design a
consumer expectation in many product categories.
• Increased demand for products that are
not only functional, but also enhance the
aesthetics of living spaces.
• Enhanced industrial design and emphasis
on creating matching ‘suites’ of products.
• Further extensions to minimalist hardware
ranges.
The adoption of e-commerce and digitalisation has
been accelerated due to the impact of COVID-19.
• Increased demand for digitalisation
throughout the supply chain and
opportunity through emerging direct-to-
consumer channel.
• Development of e-commerce capabilities,
allowing direct-to-consumer sales where
appropriate.
• Enhancement of IT systems to improve
digitalisation of the supply chain.
Comfort Sustainability Security Safety
Key
Aesthetics
Annual Report and Accounts 2021 Tyman plc 19
STRATEGIC REPORT
Our strategy of Focus, Define, Grow is underpinned by our sustainability roadmap.
The Group’s Focus, Define, Grow strategy was put in place in late 2019 following a period of heavy acquisition activity and
a change in executive leadership.
The sustainability roadmap was established in 2020 and embedded at the core of the Group’s strategy, with the three pillars
of Sustainable Operations, Sustainable Culture and Sustainable Solutions aligned with and reinforcing the Focus, Define,
Grow strategy. The strategy is guided by our purpose and reflects that there is still much value to be realised in the near-
term from activities that will optimise our business, build a more cohesive culture, and create a stronger base. Combined
with the growth initiatives that leverage the Group’s inherent strengths, our strategy aims to deliver margin expansion and
consistent profitable growth, establish a high-performance culture, and make a positive impact on the environment and in
our communities. This will create meaningful long-term value for our stakeholders.
More detail on divisional strategic initiatives can be found in the operating reviews on pages 34 to 39 and in the
sustainability review on pages 46 to 77.
Impact of COVID-19 on the strategy
The Group believes this strategy continues to be the right one in the context of COVID-19, although the global supply chain
challenges and high levels of demand have driven a re-prioritisation of initiatives towards those that improve resilience and
expand capacity in the short-term. In spite of the operational intensity, the Group has made good progress with initiatives
and there are opportunities to accelerate aspects of the strategy as COVID-19 continues to abate.
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Strategic outcomes
Margin expansion
Expand operating margin through
driving efficiency in operations
Sustainable growth
Consistently deliver profitable
revenue growth
Engaged people
Provide a safe working
environment and develop
engaged, high-performing teams
Positive impact
Protect the natural world and
build more inclusive communities
Long-term
value
creation
Our strategy
Tyman plc20 Annual Report and Accounts 2021
Focus
The Focus strategic pillar reflects actions to streamline
and strengthen what we have. The Group’s M&A
heritage means there is a continued need to integrate
and harmonise the structures, products, processes
and systems from prior acquisitions to create a strong
platform for the future. This will drive margin expansion,
enhance the sustainability of our operations, and lay the
foundations for sustainable, profitable growth.
Rationalise
• Streamline footprint: Deliver maximum operational
efficiency and economies of scale as well as having the
right routes to market in each location to best serve
the customer.
• Harmonise product portfolio: Reduce portfolio
complexity and duplication while also improving
range positioning to give a stronger product offer that
is both more efficient to produce and better meets
customers’ needs.
Optimise
• Tune systems and processes: Efficiently support
business operations management and enable high
quality, agile decision support to capitalise on
opportunities and better support customers.
• Continuous Improvement (CI): Make CI a way of
life, by embedding lean practices, six sigma process
controls and value analysis / value engineering (VAVE)
activities.
Sustainable operations
• Safety: Transform health and safety performance
through ‘safety is our first language’ programme.
• Environment
: Reduce environmental impact by decreasing
energy and water usage and reducing waste to landfill.
Define
The Define strategic pillar centres on building cultural
cohesion across the Group to facilitate ongoing synergy
extraction, through establishing ‘One Tyman’, developing
the ‘Tyman Excellence System’, and building a sustainable
culture.
Establish ‘One Tyman’
• Build a cohesive, high-performing culture through a
common purpose, values and Code of Business Ethics
to facilitate synergy extraction.
Develop the ‘Tyman Excellence System’
• Establish a clearly-defined business system and
enhance groupwide capabilities through a set
of processes, playbooks and other toolkits for
development and propagation of best practice.
Sustainable culture
• Ensure our culture enables our diverse talent to
contribute to their best and our business to create
long-term value for the business, local communities
and wider society.
Grow
The Grow strategic pillar aims to deliver sustainable
organic share gain, through executing well in serving
our customers, developing and launching new products,
expanding our existing channels to market, and developing
sustainable solutions. We also seek to supplement our
organic activities with M&A to further strengthen the
portfolio.
Excellent customer service
• Deliver a superior customer experience, fostering
long-term partnerships through excellent delivery
performance, ease of doing business, technical
support and other value-adding services such as co-
development and accredited test services.
New product development
• Develop a culture and discipline of innovation that
proactively addresses changing market dynamics,
customer requirements, aesthetic trends, and latest
technologies, to create true differentiated value.
Market expansion
• Deliver share gain through optimising routes to market,
selling existing products through new channels, and
expanding into adjacent markets.
Sustainable solutions
• Offer innovative products and services that promote
circularity, help our customers reach net zero, and
create safer, more inclusive communities.
Targeted M&A
• Tyman continues to be the natural consolidator in a
fragmented market and seeks to supplement organic
growth with targeted M&A to strengthen the portfolio.
Annual Report and Accounts 2021 Tyman plc 21
STRATEGIC REPORT
Strategic
outcomes Sub-pillar Progress in 2021 Priorities for 2022
Focus
Rationalise • Further optimised North
America footprint through
inter-site line transfers
• Commenced distribution
footprint optimisation
• Completed next phase of North
America product portfolio
harmonisation
• Complete North America
footprint optimisation activities
• Complete North America
portfolio harmonisation
Optimise • Implemented automation in
Budrio facility
• Expanded seals capacity
in the UK
• Commenced Lean Excellence
capability development
• Commenced groupwide ERP
upgrade
• Enhance supply chain and
operational resilience through
expanding alternative sourcing
and increasing redundancy
• Further increase seals capacity
using latest technology in
North America and the UK
• Continue to extend automation
to develop ‘factory of the
future’ model
• Complete first phase of ERP
upgrade
Sustainable
operations
• Completed deployment of
safety leadership programme
• Deployed four new Group
safety standards
• Defined environmental targets
• Commenced work on
developing a Science Based
Target
• Enhanced TCFD disclosures
• Installed water recirculation
system at most water-intensive
facility
• Implement safety improvement
plans at four key plants
• Continue roll-out of Group
safety standards
• Set Scope 3 SBT Science Based
Target and validate with SBTi
• Further develop TCFD
disclosures including supply
chain physical risk assessment
and quantitative scenario
analysis
• Drive reductions in energy,
water and waste
• Commence deployment of solar
energy technologies
Define
Establish One
Tyman
• Deployed new purpose, values
and Code of Business Ethics in
most locations
• Defined Group brand strategy
• Complete One Tyman
deployment and continue
to embed
• Roll-out ‘Leading with Integrity’
workshop
• Develop & deploy targeted
ethics and compliance training
Develop
the ‘Tyman
Excellence
System’
• Extended the Tyman Excellence
System to Sustainability,
Lean and IT
• Prioritised initiatives to improve
productivity and supply chain
resilience
• Developed best practice
playbook to reduce energy,
water and waste
• Defined groupwide ERP
strategy
• Complete development of
safety standards
• Deploy Lean Excellence
Leadership programme
• Complete Extremely Visual
Factory system
• Establish Kaizen best practice
playbook and global calendar
of Kaizen events
• Expand Tyman Excellence
System to talent
• Develop Procurement
Excellence roadmap
We have made good progress in 2021 and have clear plans for 2022.
Tyman plc22 Annual Report and Accounts 2021
Our strategy continued
Strategic
outcomes Sub-pillar Progress in 2021 Priorities for 2022
Define
Sustainable
culture
• Commenced work to develop
metrics for employee
engagement and retention
• Launched global Employee
Assistance Programme (EAP)
• Became a UK Real Living Wage
employer
• Undertake in-depth, all
employee engagement survey
• Develop diversity and inclusion
programme including people
metrics dashboard
• Develop community investment
and engagement plans
Grow
Executing well
in serving our
customers
• Gained market share in core
International markets due to
strength of service levels
• Achieved further net business
wins in North America through
strength of value proposition
• Strengthened sales capabilities
in UK & Ireland
• Improve customer experience
via digital tools, including ERP
and website enhancements
• Further strengthen sales
capabilities and sales and
operational planning processes
Innovation for
differentiated
value
• Launched a number of new
products, including the
Pinnacle
TM
balance, further
extensions to the CHIC
minimalist hardware range,
and the Precision adjustable
riser door frame
• Developed new products,
including fire retardant and
intumescent seals and entry-
level patio door roller and
handle set
• Launch pipeline of new
products, including
fire retardant and
intumescent seals
• Further market-driven NPD to
create differentiated value
• Continue co-development
programmes with major
customers
Market
expansion
• Secured partnerships with
significant European and GCC
system houses, through launch
of Pull & Slide system
• Commenced western
US distribution footprint
optimisation
• Developed localised product
solutions for fast-growing
China market
• Further expand system house
partnerships
• Improve coverage in
western US through new
distribution point
• Increase share in Canadian
market and accelerate growth
in China market with launch of
localised product solutions and
enhanced routes to market
Sustainable
solutions
• Achieved strong growth
products that positively impact
SDGs in-use (tilt-and-turn
hardware, seals and high-
security locks)
• Introduced new materials
and technology to reduce
consumption of single-use
plastic and packaging
• Achieved Cradle-to-Cradle
product certification for the
Giesse aluminium hinges and
Brio handle
• Establish a common ‘design
for sustainability’ approach
to integrate into new product
development processes
• Continue to develop solutions
for sustainable packaging
and removal of hazardous
substances from products
• Develop roadmap to achieve
environmental product
declarations in key markets
Targeted M&A • Established M&A focus areas,
candidate characteristics and
target funnels
• Continue to review
opportunities and develop the
pipeline
Margin expansion Sustainable growth Positive impact
Key
Engaged people
Annual Report and Accounts 2021 Tyman plc 23
STRATEGIC REPORT
Tyman plc24 Annual Report and Accounts 2021
Transforming Paddington Square
Case Study
The cube is a 17-storey, multi-use, smart building in
Paddington Square, London. Designed by Renzo Piano, it
has the effect of a light, glass cube floating over the piazza.
The challenge
The ambitious “all-glass” façade needed to be achieved with
minimal aluminium elements, a significant challenge when
dealing with large expanses of glass. The glazed double
skin surface features units that open for maintenance,
requiring every component to be carefully engineered to
fit the structure. Focchi SpA, the main contractor for the
building’s façade, was looking for a hardware manufacturer
that could meet the demanding architectural specification.
The solution
Giesse used its expertise of designing, testing and
manufacturing customised solutions to develop a high
load-bearing side-hung opening window system that would
accommodate the large expanses of glass while maintaining
minimal profiles. Customised hardware was designed to fit
the slim profiles, including miniaturised hinges, limitation
arms to restrict opening for safety, and adjustable anti-
burglar locking points for enhanced security.
Value created
Giesse was chosen for its high-quality product, bespoke
design capability, testing services and after-sales support.
The customised solution enabled the large double skin
façade units to be opened for required maintenance without
any compromise to appearance, performance or security.
This enabled realisation of the architect’s design vision and
sustainability goals, creating an attractive, naturally-lit and
energy-efficient office space.
Scan the QR code to read more
Case studies on our website.
Annual Report and Accounts 2021 Tyman plc 25
STRATEGIC REPORT
Our key performance indicators
The Group continually monitors
progress in delivery of our
strategic goals using five financial
and two non-financial key
performance indicators (‘KPIs’).
The KPIs prior to 2019 exclude the
impact of IFRS 16 ‘leases’ which was
adopted in 2019.
Certain KPIs use Alternative
Performance Measures (APMs).
For definitions and reconciliations,
see pages 203 to 208.
For further information, see the
Sustainability review on pages
46 to 77 and Financial review on
pages 40 to 45.
Like-for-like (LFL)
revenue growth
Adjusted operating
margin expansion
17. 4% 14.2%
21
20
19
18
17
17.4%
-6.0%
-1.8%
2.7%
1.7%
21
20
19
18
17
17.4%
-6.0%
-1.8%
2.7%
1.7%
21
20
19
18
17
14.2%
14.0%
13.9%
14.1%
14.7%
Strategic outcomes Strategic outcomes
Purpose
This KPI is used to evaluate the
ability of the Group to grow its
business organically and excludes
the impact of currency translation
and acquisitions and divestments.
Target
To grow revenue organically year
on year.
2021 performance
LFL revenue increased by 17.4%,
driven by strong underlying demand
across our core markets, favourable
structural trends post-COVID
and the implementation of price
increases and surcharges to recover
input cost inflation. Revenue
grew by 10.6% on a LFL basis
versus 2019.
Purpose
This KPI is used to evaluate the
profitability and financial health of
the Group.
Target
To maintain and improve operating
margins through management of
the Group’s processes as well as
overheads and administrative costs.
2021 performance
Adjusted operating margin
increased by 20bps to 14.2%,
driven by strong revenue growth,
partially offset by input cost inflation
and operational inefficiencies in
North America due to labour and
material shortages. Although pricing
actions offset the majority of cost
inflation, due to the significant
and frequent increases coupled
with some of the customer pricing
mechanisms, there is an inevitable
lag in recovery. Furthermore, the
pass-through of inflation is dilutive
to margins, given the increase in
associated revenue.
Link to strategy
Margin expansion
Sustainable growth
Engaged people
Positive impact
Tyman plc26 Annual Report and Accounts 2021
Return on capital
employed
Adjusted basic EPS Operating cash
conversion
14.5% 32.1p 64.3%
21
20
19
18
17
12.3%
12.0%
13.4%
13.6%
14.5%
14%
target
21
20
19
18
17
32.1p
27.2p
27.5p
27.6p
27.0p
21
20
19
18
17
64.3%
130.9%
132.2%
92.4%
85.6%
5 year average
101.1%
Strategic outcomes
Strategic outcomes
Strategic outcomes
Purpose
This KPI is used to evaluate how
efficiently the Group’s capital
is being employed to improve
profitability.
Target
To maintain and steadily improve
ROCE, with a medium-term target
of 14.0%.
2021 performance
ROCE increased by 220bps to
14.5% (2020: 12.3%), exceeding
the Group’s medium-term target
of 14.0%. This is due to the
increase in the Group’s adjusted
operating profit, alongside a
reduction in average property,
plant and equipment due to timing
of expenditure after deferral of
projects in 2020, and a reduction
in the carrying value of intangible
assets through amortisation and
foreign exchange movements.
Purpose
This KPI is a key measure for our
shareholders. It is used to assess
the profitability of the business
and the profit generated for equity
holders.
Target
To improve adjusted EPS
performance year on year.
2021 performance
Adjusted basic earnings per
share increased by 17.9% to
32.1p as a result of the increase
in adjusted operating profit, as
well as a reduction in the Group’s
interest charge due to continued
deleveraging and a reduction in
weighted average interest rate.
Purpose
This KPI is used to evaluate the
cash flow generated by operations
in order to pay down debt, return
cash to shareholders and make
further investment in the business.
Target
To maximise conversion of the
Group’s adjusted operating profit
into cash over any twelve-month
period while continuing to make
the necessary capex and working
capital investments to support the
growth of the business.
2021 performance
Operating cash conversion reduced
to 64.3%, principally due to a
significant working capital outflow
and increased capital expenditure.
The working capital outflow was a
result of the need to rebuild stock
levels which were very low at the
end of 2020 to meet higher demand
levels and to de-risk the business
from the global supply chain
disruption and the extended New
Year period in China. The inventory
build has also been significantly
inflated by the impact of material
cost increases and debtors have
been impacted by the increases
in prices. Capital expenditure has
increased in 2021 after two years
of deferral of expenditure due to
deleveraging and COVID-19.
Annual Report and Accounts 2021 Tyman plc 27
STRATEGIC REPORT
For further information, see the
Sustainability report on pages
46 to 77.
Lost time incidents Greenhouse gas emissions
4.4 62.3
TCO
2
e per £m revenue
21
20
19
18
17
4.4
3.1
4.0
4.8
6.2
37
23
34
44
49
••
——
Lost time incident
frequency rate
21
20
19
18
17
62.3
67.1
69.5
80.0
73.5
Strategic outcomes
Strategic outcomes
Purpose
The number of lost time incidents
and the lost time incident frequency
rate are used to evaluate progress
of our safety excellence programme
and progression toward our LTIFR
targets.
Target
To reduce the LTIFR rate each year
to <1.0 by 2022.
2021 performance
The Group is disappointed with
the deterioration in its safety
performance, which is a result of
high levels of operational intensity
and the ongoing challenges of
the COVID-19 pandemic, with
the lost time incident frequency
rate increasing 42% to 4.4. This
measure includes 21 (2020: 12)
positive COVID-19 cases resulting
from exposure at work. Excluding
these COVID-19 cases, for a LFL
comparison, the number of LTIs was
16 (2020:11) and the LTIFR was 1.9
(2020: 1.5).
Purpose
Greenhouse gas emissions is a
key indicator of the progress made
in minimising the impact of our
operations on the environment in
line with the sustainable operations
pillar in our roadmap.
Target
To reduce our Scope 1 and 2 GHG
emissions by improving our energy
efficiency, with a 50% reduction in
emissions per £m revenue by 2026,
versus a 2019 baseline.
2021 performance
The Group’s Scope 1 and 2
emissions in TCO
2
e per £m revenue
decreased by 7% in 2021 to 62.3
(2020: 67.1, restated) through a
combination of improved operating
efficiencies driven by revenue
growth, a smaller footprint
following the divestments/disposals
announced in 2020, less business
travel in company-owned vehicles,
energy-saving initiatives and a
greening of the electricity grid.
Link to strategy
Margin expansion
Sustainable growth
Engaged people
Positive impact
Tyman plc28 Annual Report and Accounts 2021
Our key performance indicators continued
Delivering compliance and efficiency
at One Nine Elms
The One Nine Elms development includes construction
of two landmark towers in London. When complete, the
56-storey City Tower will be the tallest residential tower in
Europe.
The challenge
Throughout commercial and residential construction, the
installation of steel riser doors has typically required the
use of frame packers and intumescent mastic, posing
potential fire integrity risks to the final installation, as
well as increasing installation time. Requirements for
testing and certification of building products are becoming
stricter, and contractors are under continued pressure to
increase on-site efficiency, without compromising quality or
performance.
The solution
Profab Access developed the patent-protected Precision
Adjustable Frame to make the installation of steel riser
doors safer, faster and simpler. It enables the installer
to fully adjust the frame to meet the specific dimensions
of each structural opening, eliminating the requirement
for packers. It also features an integral intumescent strip
that provides fire integrity between the wall and frame,
removing the need for the installer to apply mastic bead.
This has significantly reduced the installation time on site.
The frame has been independently bi-directionally tested
and fire-certified at 120 minutes with the Profab Access
Integra 4000 Series Riser Door.
Value created
Almost 300 Profab Access steel riser doors and
accompanying Precision Adjustable Frames have been
specified and supplied to specialist joinery contractors,
Houston Cox, as part of the One Nine Elms project. The
Profab Access doorset was selected for its high level of fire
integrity and efficiency of installation, enabling the project’s
exacting specifications to be met in the most proficient
manner while ensuring project timescales are also achieved.
Case Study
Specifying a complete doorset that delivers
120-minute fire integrity performance, whilst
also eliminating the requirement for packers
and intumescent mastic, was the most viable
and efficient approach for our contractors. The
end result is an extremely robust and simple
installation process that delivers the highest
possible standards of compliance.”
Nicholas Howland
Project Director for Houston Cox Central
Scan the QR code to read more
Case sudies on our website.
Annual Report and Accounts 2021 Tyman plc 29
STRATEGIC REPORT
On behalf of the Board, I would like to extend my
thanks to all our people for their continued effort
and resilience in managing through what has been
another challenging year.”
Nicky Hartery
Non-executive Chair
Introduction
2021 has been another year of unprecedented turbulence.
While COVID-19 has continued to abate, the ongoing
effect of the pandemic, rebound in demand and well
publicised supply chain disruption has created a new level
of operational intensity to manage. On behalf of the Board,
I would like to extend my thanks to all our people for their
continued effort and resilience in managing through what
has been another challenging year.
People and culture
The Board’s first priority continues to be ensuring the
health and safety of our employees, their families and our
communities. The purpose, values and Code of Business
Ethics, which are the building blocks of the Group’s culture,
were deployed across the organisation. The Employee
Assistance Programme (EAP) was extended across the
majority of the Group, ensuring our employees have access
to a professional support package. The views of employees
were sought and considered by the Board through site
visits where movement restrictions allowed, and skip-level
meetings held by the Workforce Engagement NED, Pamela
Bingham.
Sustainability
The Group’s commitment to making a contribution to a
more sustainable world through its operations, culture,
and solutions is a key area of focus for the Board. Strong
progress was made in 2021, with work well underway to
assess our climate change risks and opportunities as part of
the TCFD work programme, and to define our science-based
targets. Further details are set out on pages 54 to 57, and
68 to 77.
Strategy
The Board oversaw the annual update to our strategy,
including consideration of the impact of COVID-19 and
supply chain challenges on our near-term priorities. The
Board continues to believe the strategy is the right one
in the current environment and supports the re-focus of
initiatives to enhance resilience and improve output. The
Board was pleased with progress made with strategic
initiatives in spite of the high level of operational intensity,
with many of the foundational activities to strengthen
the base successfully executed and the growth initiatives
yielding positive results. The Group is now well positioned to
resume M&A activity when the right opportunity presents.
Further details of our strategy are set out on pages
20 to 25.
Performance overview
The Group’s performance was robust, with strong market
demand being somewhat constrained by supply chain
challenges and US labour shortages, delivering LFL revenue
17% higher than 2020 and 11% higher than 2019. In spite
of unprecedented cost inflation and operational challenges,
LFL adjusted operating profit was 16% higher than 2020
and 11% higher than 2019. Due to the need to re-build
working capital and resume deferred capital expenditure,
cash conversion fell to 64% from an abnormally high 131%
in 2020. Leverage reduced from 1.1x adjusted EBITDA to
0.9x, slightly below the target range.
Dividends
The Board was very pleased to be able to reinstate the
progressive dividend policy during the year, reflecting the
robust performance and confidence in the outlook. The
total dividend proposed for the 2021 financial year is a
record 12.9 pence per share. The dividend will be paid on
27 May 2022 to shareholders on the register at the close of
business on 28 April 2022.
Chair’s statement
Tyman plc30 Annual Report and Accounts 2021
Board changes
David Randich joined the Board on 15 December 2021
as a Non-executive Director and member of the Audit &
Risk, Remuneration and Nomination Committees. David
brings extensive experience of the North American building
products market to the Board. On behalf of the Board, I
would like to welcome David to the Group. Further details
concerning the work of the Nominations Committee during
the year are set out on pages 102 and 103.
Governance
The Board is committed to good corporate governance
and recognises the important role it plays in supporting
our long-term success and sustainability. The Group’s
Governance report can be found on pages 94 to 101 and
provides an overview of Tyman’s governance framework, as
well as the work of the Board and its Committees.
During the year, the Board spent time supporting
management with the ongoing supply challenges,
embedding the purpose and values, enhancing the risk
management and control frameworks, and monitoring the
business ethics and compliance programme. An externally
facilitated Board evaluation was conducted during the
year, which provided valuable feedback on areas to further
enhance the effectiveness of the Board which will be
implemented in 2022.
Summary
The way the Group has continued to navigate through
the exceptionally dynamic environment demonstrates the
resilience of its business model and its people. The strong
underlying growth drivers and strategic initiatives support
significant value-creation potential through further organic
share gain as the current challenges recede, and a return to
M&A activity when the right opportunity presents.
Nicky Hartery
Non-executive Chair
3 March 2022
Annual Report and Accounts 2021 Tyman plc 31
STRATEGIC REPORT
Performance in 2021
The positive market momentum continued through 2021,
with favourable structural trends driving strong demand,
although growth was constrained through the second half
by the industry-wide global supply chain and US labour
challenges. Despite this, the Group delivered market share
gains through executing well with customers, driving
momentum with new products, and continuing expansion
of channels to market. Revenue for the year was £635.7
million (2020: £572.8 million), an increase on a LFL basis
of 17% compared to 2020 and 11% compared to 2019.
Reported revenue increased 11% compared to 2020,
being impacted by the strengthening of sterling and the
divestment of the Ventrolla business in November 2020.
The trends arising from COVID-19 have continued across
most territories, with consumers having spent more time
at home and therefore seeking more space or adapting
existing space for flexible use. Household savings have
increased, and consumers have prioritised expenditure
on the home over leisure activities. Increased mortgage
lending and low interest rates have also supported housing
market activity, particularly in the US and UK, as has fiscal
stimulus, such as the stamp duty holiday in the UK and the
‘super bonus’ incentive for home improvements in Italy.
In the US, the lack of inventory for both new and existing
homes, affordability, and the increasing rate of millennial
household formation have also continued to contribute to
strong growth in both single-family starts and RMI activity.
The high levels of demand have continued to put pressure
on service levels industry-wide in most of the Group’s
territories, exacerbated by raw material availability issues
and global logistics disruption. The US has also suffered
from a very tight labour market, resulting in operational
challenges which have impacted production and shipping
levels. Steps have been taken to increase capacity and
throughput, including expanding operating hours, increasing
wage rates and other incentives, and implementing various
productivity improvement initiatives. This also includes
a number of capital investment projects to structurally
expand capacity and improve throughput. The business is
working closely with customers to manage demand and with
suppliers to secure inventory.
The spike in demand for goods globally has also driven
significant increases in commodity costs and freight costs,
with the US also seeing significant labour cost inflation.
The Group has implemented price increases and temporary
surcharges to recover cost inflation, although due to the size
and frequency of these increases as well as some customer
pricing mechanisms, there is an inevitable lag in recovery.
The pass-through of this inflation also has a dilutive effect
on operating margins due to the higher revenue base.
Despite the operational challenges and cost inflation, the
strong revenue growth and impact of pricing combined with
the benefit of self-help initiatives, resulted in LFL adjusted
operating profit growth of 16% compared to 2020 and
11% compared to 2019. Reported adjusted operating profit
increased 12% compared to 2020, with the unfavourable
impact of exchange rates offset by a benefit from the
disposal of the loss-making Ventrolla business. Adjusted
operating margin expanded from 14.0% to 14.2% despite
the dilutive effect of pass-through pricing to recover
inflation.
Health and safety
The health and safety of our people is the Group’s top
priority, with this culture being embedded through the
‘safety is our first language’ engagement programme. The
Group’s safety performance deteriorated in 2021 as a result
of the high levels of operational intensity and the ongoing
challenges of COVID-19. The lost time incident frequency
rate including COVID-19 cases resulting from workplace
transmission increased to 4.4 incidents per million hours
worked (2020: 3.1). Excluding these COVID-19 cases,
the lost time incident frequency rate was 1.9 (2020: 1.5).
Safety improvement plans have been implemented at the
plants with the highest incident rates. It is notable that half
of the incidents in 2021 were with personnel with less than
one year of service, reflective of the high levels of workforce
turnover, especially in the US, and the high proportion of
temporary staff in our facilities in 2021. While the 2021
result is disappointing, excluding COVID cases, it still
represents strong progress from the 2019 baseline of 4.0
incidents per million hours worked, and the Group remains
committed to its target of achieving an LTIFR rate of less
than 1.0 in 2022.
I am very proud of our people as they have continued
to navigate tirelessly through an unparalleled period
of operational intensity.”
Jo Hallas
Chief Executive Officer
Tyman plc32 Annual Report and Accounts 2021
Chief Executive’s Review
Strategic progress
The Group has continued to progress its Focus, Define,
Grow strategy, which is underpinned by the three
sustainability pillars of Sustainable Operations, Sustainable
Culture, and Sustainable Solutions. The global supply chain
challenges and high levels of demand have driven some
re-prioritisation of initiatives towards those that improve
resilience and expand capacity in the short-term, but
momentum has also continued with driving our mid-term
strategic initiatives.
The Focus activities have continued to progress and the
benefits from the various initiatives to streamline operations
completed in 2020 are being realised. Further inter-site
line transfers in North America were completed and work
commenced with optimising the distribution footprint in
the western US. Continuous improvement activities were
directed towards increasing capacity and throughput, and a
multi-year upgrade of IT systems to enhance the customer
service experience, generate further synergies and improve
decision-making has commenced. Progress has also been
made with the Sustainable Operations activities. A new
water recirculation system at the most water intensive
plant was commissioned leading to a 45% reduction in the
Group’s water consumption, and initiatives to re-process
scrap were successfully implemented. Tyman’s two-
year programme to define science-based targets is well
underway, with a detailed analysis of carbon footprint across
the value chain undertaken. As part of the TCFD compliance
journey, an in-depth review of the risks and opportunities of
climate change on the Group’s operations and supply chain
has also progressed well during the year.
The Define strategic pillar, which centres on building
cultural cohesion across the Group has continued to gain
momentum, with deployment of the Group’s purpose,
values, and Code of Business Ethics now substantially
complete. Furthermore, collaboration between the
divisions continues to gain traction with more frequent and
substantive touchpoints and a series of cross-divisional
initiatives undertaken. This ‘One Tyman’ culture provides
the basis for the Group’s Sustainable Culture initiatives.
Development of the ‘Tyman Excellence System’ has also
continued, with a focus on Lean Excellence and prioritisation
of activities to enhance supply chain and manufacturing
resilience. Under IT Excellence, a groupwide ERP landscape
and vendor strategy was defined.
The activities to Grow market share have yielded positive
results, with service levels relative to competitors delivering
strong market share gains in core international markets
and further net customer wins in North America. Channel
expansion activities also continued to progress, with
increased systems house partnership activity. A series of
new products were successfully launched in the period, and
a strong pipeline of launches is scheduled for 2022. New
product development activities also included developing
Sustainable Solutions to grow the proportion of revenues
from positive impact products. Various initiatives are also
underway across the Group to improve the sustainability
of packaging and reduce the use of hazardous substances
in production. The Group has begun to sow the seeds for
a disciplined return to M&A by defining areas of focus for
acquisitions, candidate characteristics, and developing the
pipeline of potential opportunities that meet our commercial
and strategic objectives. The strengthened platform and
Tyman Excellence System should facilitate greater synergy
extraction from acquired businesses in the future.
Outlook
We expect underlying demand in 2022 to remain strong,
benefitting from favourable housing market fundamentals,
albeit set against rising macroeconomic and geopolitical
pressures, supply chain and labour constraints, and
continued COVID-19 disruption. High input costs are
expected to persist for most of the year and further pricing
actions will be implemented where necessary to recover
cost inflation.
Consequently, the Group expects top-line growth to be
driven by the mix of underlying strength in demand and
pricing to recover inflation. This revenue growth, combined
with benefits from execution of strategic initiatives, is
anticipated to benefit profitability for the full year. Operating
margins will be broadly flat due to the dilutive effect of
passing through cost inflation.
Activities to enhance supply chain and manufacturing
resilience, improve productivity and increase capacity to
meet both current and expected longer-term demand will
continue. The Group will also focus on driving organic
share gain through its strategic initiatives of executing
well in serving our customers, innovation for differentiated
value and channel expansion. In addition, the medium-
term intention is to resume M&A activity when the right
opportunity presents.
The Group is well positioned for growth in 2022 and beyond,
benefitting from long-term structural industry growth
drivers, our strategic initiatives and building on our portfolio
of differentiated products, market-leading brands and deep
customer relationships.
Jo Hallas
Chief Executive Officer
Annual Report and Accounts 2021 Tyman plc 33
STRATEGIC REPORT
Tyman North America
£m except where stated 2021 2020 2019
LFL
vs 2020
LFL
vs 2019
Revenue 397.7 372.1 386.0 +14% +11%
Adjusted operating profit 65.1 64.5 64.5 +8% +9%
Adjusted operating profit margin 16.4% 17.3% 16.7% -100bps -30bps
Markets
The US residential market remained at post-recession record
levels during the year, driven by the limited supply of homes,
demographic shifts and a continuation of pandemic-driven
trends of nesting and urban flight. US housing starts were
up 16% compared to 2020 (+24% vs 2019), with single
family starts, to which the division has proportionally higher
exposure, increasing 13% (+26% vs 2019). The industry-
wide labour and supply chain challenges, however, have
constrained activity, with completions only up 4% versus
2020, significantly lagging starts.
The repair and remodelling markets continued to experience
strong growth due to the strength of the housing market,
credit availability and people spending more time at home.
According to LIRA (Leading Indicator of Replacement
Activity), remodelling activity was up 9% in 2021.
The commercial markets are showing tentative signs of
recovery, again constrained by supply chain challenges and
input cost inflation. Non-residential building starts rose 12%
and environmental public works, to which the commercial
access business is particularly exposed, were up 21%.
The Canadian market had a robust start to the year but
weakened through the second half. Housing starts were up
25% compared to 2020, with single family starts increasing
38%. Completions lagged starts, with only 12% growth.
Business performance and developments
The positive momentum in the US and Canadian markets,
along with net business wins and significant pricing actions to
offset cost inflation, resulted in LFL revenue growth of 14%
compared to 2020 and 11% compared to 2019. This was
in spite of industry-wide raw material, logistics and labour
availability issues, which significantly impacted production
and shipping rates in the second half of the year.
Workforce availability continued to be challenging throughout
the US manufacturing sector as demand rose sharply. The
division implemented a series of actions to alleviate the
situation, including wage increases, recruitment programmes,
retention and hiring incentive schemes, and trialling flexible
working practices. These measures have delivered gradual
improvement; however, the inevitable time for training new
employees along with elevated absenteeism rates due to
COVID-related factors have impacted productivity.
To mitigate the significant input cost inflation, the division
implemented a series of price increases and surcharges.
However, due to the speed of cost increases and the nature
of some customer pricing mechanisms being based on
retrospective material cost indexes, there is a lag in recovery.
In addition, the pass-through of cost inflation has had a
dilutive effect on operating profit margins, given the higher
revenue base. The combined impact of this cost inflation,
as well as inefficiencies arising from labour and component
shortages, partially offset the strong revenue growth and
benefits from continuous improvement activities, resulted in
LFL adjusted operating profit growth of 8% compared to 2020
and 9% compared to 2019. LFL adjusted operating margin
deteriorated 100bps to 16.4% compared to 2020 and by
30bps compared to 2019.
The division has worked closely with customers and suppliers
to manage demand levels and has been successful in winning
new business through the strength of its value proposition.
The portfolio harmonisation activities are progressing to plan,
with sliding patio door rationalisation now complete and work
underway on the hinged patio door and casement product
groups.
The division continued to drive operational improvements,
with focus shifting near-term to increasing capacity and
throughput to meet heightened demand. This included
further inter-site line transfers, temporary outsourcing
of processes to increase capacity, and capital investment
directed towards addressing bottlenecks. Activities to
optimise the distribution footprint in the western US
commenced, with consolidation of two warehousing sites
completed and conversion of space in the Sioux Falls
facility to distribution in progress. Work is well underway
on implementing a new integrated ERP platform which will
enable a more streamlined ordering process for customers,
enable efficiency gains in shared services and improve our
decision support capabilities.
New product development
New product development continues to be a key enabler of
growth for the division. Products launched in 2021 include a
number of customer specific solutions and the division’s new
Pinnacle
TM
balance. After initial launch with a development
partner, the Pinnacle
TM
is gaining traction with other
customers due to the innovative design allowing customers
to use one balance configuration across multiple window
lines, enabling a significant reduction in the number of SKUs
and a reduction in window frame material content. There is a
growing pipeline of products due for launch in 2022, including
the entry price point sliding patio door roller and handle
solution, redesigned to compete more effectively in the price
sensitive sector of the growing vinyl market.
Outlook
High levels of demand are expected to be sustained,
although supply chain constraints, labour availability, cost
inflation and interest rate increases may constrain market
activity. Cost inflation is expected to remain high through
2022, although realisation of the benefits of price increases
implemented in 2021 is expected to benefit profitability. The
division will continue to monitor inflation and adjust pricing
mechanisms accordingly.
In 2022, the division will continue to focus on increasing
capacity to meet heightened demand and improving
operational efficiency. There are a number of activities
underway to enhance supply chain resilience for the division
and its customers, including increasing both supply and
manufacturing redundancy. Work will also continue with the
ERP implementation, optimising the distribution footprint
and completing the product portfolio harmonisation
initiative.
Tyman plc34 Annual Report and Accounts 2021
Operational review
Sustainable solutions in action
Case Study
Tyman North America produced enough weatherstripping
to circle the globe over eight times in 2021, with most of
this being packaged in corrugated cardboard. To support
its sustainability ambitions and those of its customers,
the business sought to reduce waste in the supply chain
through strategic customer development partnerships.
Projects with strategic customers were commenced, to
eliminate the need for corrugated packaging by leveraging
returnable solutions and re-useable crates. The division
partnered with a large customer to move away from
individual reels and is in the process of investing in
returnable reels for implementation in 2022. Initial efforts
have saved over 22,000 cardboard boxes and 1,200 timber
pallets in 2021. Tyman partnered with Endura Products
to change packing methods on corrugated containers
of urethane door seal products, reducing the packaging
needed by 50%.
In addition, the desire to contain material costs, support
circularity, and address scarcity of supply, led the business
to refine manufacturing and tooling processes to allow for
the use of scrap in lieu of virgin polypropylene. 10% of the
kerf material used in door seals was converted from re-
processed polypropylene, saving $120,000 and 24 tonnes
of material for the business annually. The target percent for
non-virgin materials will increase beyond the current level
as the business continues to refine processes through 2022.
Additional initiatives planned for 2022 include investing
in equipment to support a new circular packaging
programme with one of our strategic partners. The multi-
year programme will support new business, using 100%
reusable reels and packaging on over six million metres of
product. This programme is projected to save over 5,250
reels, 2,600 boxes and 600 timber pallets.
In 2021, we partnered with AmesburyTruth to reduce
packaging waste. We identified that moving to
standard packaging for our door seal product, would
reduce the number of boxes and pallets needed, free
up valuable real estate within our warehouse, and
reduce the number of trucks required to transfer
inventory. At Endura, we are proud to be partnered
with AmesburyTruth and appreciate their willingness
to engage with us to make a positive impact on the
environment.”
Kevin MacDonald
Vice President of Operations at Endura Products
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Annual Report and Accounts 2021 Tyman plc 35
STRATEGIC REPORT
Tyman UK & Ireland
£m except where stated 2021 2020 2019
LFL
vs 2020
LFL
vs 2019
Revenue 105.8 92.2 107.2 +18% +5%
Adjusted operating profit 14.8 8.8 13.8 +35% +1%
Adjusted operating profit margin 14.0% 9.6% 12.9% +170bps -50bps
Markets
The strong momentum in the UK residential RMI market
has continued throughout 2021, driven by the stamp duty
holiday, higher consumer savings levels, and home working
resulting in people seeking more space and increasing
spending on home improvement activity. The rate of growth
began to moderate in the second half of the year due to the
end of the stamp duty holiday, supply constraints and cost
inflation. The IHS Markit / CIPS UK Construction PMI was at
54.3 in December 2021 (December 2019: 44), signalling a
strong rate of construction output growth. The number of
housing transactions was 41% higher than in 2020 (+26%
vs 2019), and the CPA estimates that private housing RMI
was 17% higher than in 2020 (+2% vs 2019).
The commercial market has recovered at a slower rate than
the residential market, with project delays due to the impact
of social distancing measures on construction sites and the
availability of labour and materials.
Business performance and developments
The UK & Ireland division achieved LFL revenue growth of
18% compared to 2020, and 5% compared to 2019. This
reflects the buoyant residential RMI market and the effect
of pricing actions, weighed down by the impact of the
weaker performance of the commercial access business.
On a reported basis, revenue was 15% ahead of 2020 and
1% lower than 2019, reflecting the disposal of Ventrolla in
November 2020.
This performance was achieved despite constraints arising
from industry-wide supply chain pressures driven by
material shortages and global shipping disruption, which
significantly impacted service levels earlier in the year.
Actions were taken to resolve stock shortages, including the
use of expedited and alternative freight services, as well as
increasing order levels to provide additional cover, which
improved service levels in the second half.
Material and transport cost inflation was mitigated through
price increases and the favourable impact of foreign
exchange on material purchases, with LFL adjusted
operating profit 35% higher than 2020, and 1% above
2019. LFL adjusted operating margin expanded by 170bps
against 2020 and declined by 50bps against 2019, impacted
by the effect of cost inflation, as well as weaker sales and
margins in the commercial access business. On a reported
basis, adjusted operating profit was 68% higher than
2020 and 7% higher than 2019, reflecting the disposal of
Ventrolla, which was loss-making.
Hardware sales continued to be robust, driven by the
buoyant housing market and the benefit of price increases,
although were constrained by stock availability, resulting
in reported revenue 22% ahead of 2020 and 8% ahead
of 2019. Sales of the ERA Protect
TM
smartware range
remained below planned levels, as the home security
market was subdued by consumers spending more time
at home. The ERA Protect
TM
Core Kit received a Which?
Best Buy endorsement, and a new consumer-focused
microsite was launched to drive direct-to-consumer sales.
The business has also continued to progress development
of sustainable packaging solutions and elimination of
chromium 6 from products.
Access 360, the division’s commercial access portfolio, had a
challenging year. The business is largely project-based and
suffered from a dearth of larger infrastructure projects in
the year, resulting in sales 5% below 2020 and 15% below
2019. Sales were also affected by the business’s decision to
temporarily suspend sales of two core product lines due to
delays in obtaining re-certification, which led to these being
substituted with higher-cost products, further impacting
profitability. Sales improved towards the end of the year
with the sustained focus on online training further improving
engagement with architects and specifiers. Work continues
to optimise the business, with activity to harmonise systems
across the three heritage Access 360 businesses now well
progressed.
New product development
Several new products were launched in the period, in
line with the strategy to extend ranges and broaden the
certified products portfolio. This included ERA’s first range
of internal door handles, with concealed fixings and a clean
aesthetic that can be coordinated throughout the property.
The handles include secure bolt-through fixings to eliminate
the requirement for cutting to simplify the fitting process,
and the design and spring mechanism provide enhanced
ergonomics and durability.
Also launched during the year was the Access 360
adjustable riser door frame product, which addresses an
industry-wide challenge with installing riser doors. The
product removes the need for installers to use separate
packers which can impact fire integrity, and also integrates
an intumescent strip to avoid the need to apply intumescent
mastic. This solution reduces door installation time by up to
50%, delivering significant savings to customers.
Outlook
The RMI market is expected to be broadly flat in 2022,
with strong activity in the first half of the year, set against
a weaker second half as the impact of increases in the
cost of living affect consumer confidence and spending,
particularly in light of continued construction cost inflation.
The commercial market is expected to continue to recover
slowly, with CPA forecasts now indicating output will not
return to 2019 levels until beyond 2023. The infrastructure
sector is expected to benefit from some significant
government investment projects, which could benefit the
commercial access business.
High levels of cost inflation, ongoing logistics disruption, as
well as the impact of further possible lockdowns in China
will continue to create headwinds in 2022. Further pricing
actions will be taken as required to manage cost inflation.
The division’s focus in 2022 will be on enhancing supply
chain resilience, continued new product development,
including expansion of the certified solutions and cylinder
ranges, and further optimisation of the Access 360 business.
Tyman plc36 Annual Report and Accounts 2021
Operational review continued
Case Study
Homeowners are increasingly conscious of design trends,
which has made achieving a stylish look and feel more
important than ever.
The challenge
Demand has emerged for a traditional-looking entrance
door that is compatible with period properties, but also
gives the highest modern standards of performance and
durability. Manufacturing methods for this style of hardware
are traditionally very manual and do not provide the same
level of safety and efficiency as modern processes.
The solution
Working closely with one of the UK’s largest composite
door manufacturers, a new range of period-inspired door
hardware was designed under the Fab&Fix brand.
Three traditionally-styled door handles and knockers were
designed and two additional finishes added to the range,
pewter and forged black. Using the latest manufacturing
methods, the look and feel of iron-forged hardware could be
created in a safe and efficient way, while ensuring a modern
and durable low maintenance finish. Pewter and forged
black are offered across 48 different products (including
handles, letterplates, door knobs, escutcheons, vertical
window hardware), enabling door manufacturers to offer
customers the widest choice of suited hardware for their
traditional door ranges.
The hardware is finished with Fab&Fix’s proprietary plating
technology, Hardex. The Hardex range undergoes a form
of accelerated corrosion testing which goes beyond the
relevant industry standards for weather resistance and
longevity, to produce a higher performance specification
than competing brands.
Value created
The range has been taken up by many customers, including
Endurance Doors. The Fab&Fix pewter range perfectly
complements their Country door range, providing their
customers with a complete suite of durable period style
door furniture.
Traditional hardware is seeing a real resurgence
throughout the industry, as our customers look to
replicate the aesthetic of period style properties.
The Fab&Fix pewter range perfectly aligns with
this growing trend, providing our customers
with a complete suite of authentic door furniture
for our Country doors. The hardware has been
expertly designed to deliver visual appeal and
is durable enough to withstand today’s modern
environment.”
Stephen Nadin
Managing Director, Endurance Doors
Traditional aesthetics with
modern performance
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Annual Report and Accounts 2021 Tyman plc 37
STRATEGIC REPORT
Tyman International
£m except where stated 2021 2020 2019
LFL
vs 2020
LFL
vs 2019
Revenue 132.2 108.4 120.5 +27% +15%
Adjusted operating profit 19.5 12.3 14.8 +66% +37%
Adjusted operating profit margin 14.7% 11.3% 12.3% +350bps +237bps
Markets
Market demand was strong throughout the year in all
of the division’s key markets, despite the continuation
of COVID-19 restrictions. The IHS Markit Eurozone
Construction PMI rose to 52.9 in December, indicating
robust expansion of construction activity. The PMI for Italy,
the division’s largest market was 64.4 in December 2021,
after reaching an all-time high of 65.5 in November 2021.
Momentum in Continental Europe has continued to build
through the year across both the residential and commercial
sectors. This has been driven by resumption of projects
on hold due to COVID-19 and consumers continuing to
invest in their homes, boosted by government stimulus
measures, such as the Italian super-bonus and eco-bonus
schemes. Similar buoyancy has been seen in other regions,
notably Australia and LATAM. The GCC cluster has also seen
continued growth, largely coming from project activity in
the commercial sector.
We are mindful of the evolving crisis in Ukraine; we have
no local operations or colleagues based there or in Russia,
and all our revenues are derived via local distribution
partners (totalling c.1% of Group revenues in 2021). We are
monitoring developments and will adapt as appropriate; our
thoughts are with all those impacted.
Business performance and developments
The division had a very strong year, with LFL revenue
growth of 27% against 2020 and 15% against 2019, due to
buoyant market conditions, share growth in all key markets
and pricing to compensate for cost inflation.
The share growth was achieved through momentum with
channel partnerships and the new product development
pipeline coming to fruition, aided by robust supply chain and
capacity management. Revenue in all top twelve markets,
representing c. 80% of the business, grew compared to
2019; notably Italy grew 18%, reflecting both strong
underlying market growth, some impact from customer re-
stocking, as well as share gain.
Strong headwinds created by Brexit, haulier shortages,
materials scarcity, and significant commodity and freight
cost inflation have been effectively managed during the year
through robust supply chain management and agile pricing
to protect margins. Combined with the strong revenue
growth and beneficial effect on fixed cost absorption,
this resulted in LFL adjusted operating profit growth of
66% compared to 2020 and 37% compared to 2019. LFL
aAdjusted operating margin expanded 350bps to 14.7%
(+237bps vs 2019).
The business managed the high activity levels and global
supply chain disruption effectively, demonstrating the
resilience of its supply chain. Production levels were
successfully increased through use of additional shifts and
temporary labour, without loss of efficiency. Orderbook
and lead times remain high in the seals business and work
continues to expand capacity systemically, with new Q-Lon
urethane lines being installed and commissioned in the UK
in late 2021 to come up to full capacity in early 2022.
The division has continued to progress its strategic
initiatives throughout the year. Partnership activity with
system houses has continued to expand through the
development of customised solutions to create long-
term opportunities, with revenue from this channel up
19% vs 2019. Increased penetration has been driven by
the innovative Giesse Pull & Slide system, with several
agreements in place for future collaboration.
The programme to drive greater levels of automation in
the Budrio hardware manufacturing facility has progressed
well, leading to improvements in safety, efficiency and
throughput. Work has also continued on sustainability
activities, with C2C Silver accreditations achieved for flash
hinges and Brio Evo handles during the year, and a number
of other projects underway to improve the sustainability
of manufacturing operations, packaging and other
components.
New product development
The business has continued to focus its new product
development efforts on the trends of aesthetics, safety and
sustainability. The minimalist design concept was extended
to interior doors with the Reguitti Obliq launch. The Obliq
delivers elegant rosette-free aesthetics, highly functional
ergonomics, easy installation and has been recognised
for its sustainability credentials due to the use of recycled
aluminium and reduced material content. There was also
a further line extension of the successful CHIC concealed
hinge range for door applications, which addresses the
minimalist hardware trend, as well as several customised
solutions launched in partnership with system houses.
Due to customers’ high activity levels, the fire-retardant and
intumescent urethane seals, which are certified to European
standards for use in fire door applications, will now launch
in H1 2022 when customers are more ready to receive new
products.
Outlook
Forward momentum is expected to continue into 2022,
albeit at a slower rate than the strong growth seen in 2021.
The European construction sector is expected to grow at
3% across both the commercial and residential sectors. The
future impact of COVID-19 remains uncertain, as well as
the implications it will have on consumer spending choices.
The business is well prepared to manage input cost inflation
with further price increases to be implemented in Q1 2022
on hardware products and the continued application of
surcharges for the seals range.
The priorities for 2022 are to retain the 2021 share gains,
exploit further growth opportunities through new product
launches and channel expansion activities, and maintain
margins. In addition, work will continue to increase capacity
through ramping up production on the new urethane seal
lines and enhancing productivity through automation and
lean excellence initiatives.
Tyman plc38 Annual Report and Accounts 2021
Operational review continued
Giesse has been working with us for the past
three years and it did a fantastic job in creating
a cost-effective and high-performance system
for the Sobha Waves project. It is a pleasure
working with the Giesse team and we look
forward to working with them again on our future
projects.”
Mr. Rajaikepin Rajamoni
Business Head, Sobha Facades
Case Study
Located in the sought-after waterfront district of Dubai,
Hartland Waves is a modern, luxury 35-storey development
with uninterrupted 360-degree views from every apartment.
The challenge
Dubai’s weather conditions can bring high winds and
sandstorms, which creates challenges for window performance,
especially in high-rise buildings. This project therefore required
a high performing window system that is airtight and strong
enough to withstand high winds, while maintaining minimal
profiles to preserve views. Thus, Sobha, one of the largest
real estate companies in the world, approached Giesse for its
expertise in designing bespoke solutions.
The solution
Giesse worked side-by-side with Sobha to develop a Lift &
Slide balcony door solution that was customised for Sobha’s
frame profiles. This enabled Sobha to provide a minimal
frame profile to provide uninterrupted views, while also
achieving a high level of water-tightness and air-resistance
that meets the strictest European standards.
Value created
Giesse’s efficient, modular technology helped Sobha
streamline the fabrication process for their sliding windows,
greatly improving the window fabrication costs and speed.
The resulting windows system provides uninterrupted
views while achieving high levels of air, water, and wind
resistance; low thermal transmission to effectively maintain
internal temperature; and high acoustic insulation to
minimise noise. The solution is sustainable while enhancing
comfort for residents.
A high-performance solution for
uninterrupted views
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Annual Report and Accounts 2021 Tyman plc 39
STRATEGIC REPORT
Income statement
Revenue and profit
Reported revenue for the year increased by 11.0%
to £635.7 million (2020: £572.8 million), reflecting a
significant increase in volume of £68.8 million driven by
strong underlying demand and favourable structural trends
post-COVID-19, as well as price increases of £11.9 million
and tariffs and surcharges of £13.5 million to recover
input cost inflation. This was offset by adverse foreign
exchange movements of £28.5 million and the disposal of
the Ventrolla business in November 2020 of £2.8 million. On
a LFL basis, revenue increased 17.4% compared to 2020.
Compared to 2019, which provides a more normalised
comparator, LFL revenue increased 10.6%, reflecting the
favourable market conditions and pricing actions.
Adjusted selling, general and administrative expenses
increased to £121.7 million (2020: £111.8 million), as
a result of the reversal of temporary cost-management
actions taken in 2020 to mitigate the impact of COVID-19,
including the curtailment of discretionary expenditure and
cancellation of the senior management bonus scheme,
as well as the receipt of £1.7 million from government
job retention schemes outside of the UK. There was also
a favourable impact of foreign exchange of £4.5 million.
Against 2019, adjusted administrative expenses were flat
(2019: £120.2 million).
Adjusted operating profit increased by 12.1% to £90.0
million (2020: £80.3 million). This was positively impacted
by the revenue growth, productivity gains from continuous
improvement initiatives of c. £4.9 million, and the disposal
of the loss-making Ventrolla business of £2.2 million. These
benefits were partially offset by the impact of raw material
and freight inflation over and above pricing actions, labour
rate increases, the reversal of the temporary COVID-
related cost-savings, and £4.6 million of adverse foreign
exchange movements. On a LFL basis, adjusted operating
profit increased 15.6%. The Group’s adjusted operating
profit margin increased 20bps to 14.2% (2020: 14.0%).
Compared to 2019, LFL adjusted operating profit increased
by 11.1%, reflecting the strong revenue growth and
benefits from self-help initiatives.
Adjusted profit before taxation increased by 19.2% to
£81.5 million (2020: £68.4 million) and on a LFL basis
increased 21.9%, benefitting from lower finance costs due
to the reduction in net debt. Reported profit before taxation
increased by 34.5% to £64.0 million (2020: £47.6 million),
reflecting an exceptional credit of £0.6 million as opposed to
a cost of £1.8 million in the prior year, as well as a reduction
in the amortisation charge on acquired intangible assets.
Materials and input costs
£m except where stated
FY 2021
Materials
(1)
Average
(2)
Spot
(3)
Aluminium (Euro) 17.0 +43% +74%
Polypropylene (Euro) 37.8 +86% +113%
Stainless steel (US) 76.5 +16% +46%
Zinc (US) 31.4 +21% +25%
Far East components (UK)
4
44.6 +7% +6%
1
FY 2021 materials cost of sales for raw materials, components and hardware for overall category
2
Average 2021 tracker price compared with average 2020 tracker price
3
Spot tracker price as at 31 December 2021 compared with spot tracker price at 31 December 2020
4
Pricing on a representative basket of components sourced from the Far East by Tyman UK & Ireland
Both spot and average prices across all categories rose significantly in 2021. Price increases and surcharges have been
implemented to recover cost increases, albeit due to the magnitude and frequency of these increase as well as customer
pricing mechanisms, there is an inevitable timing lag in recovery.
Strong LFL adjusted operating profit growth of 11%
against 2019, despite unprecedented input cost
inflation.”
Jason Ashton
Chief Financial Officer
Financial review
Tyman plc40 Annual Report and Accounts 2021
Exceptional items
Certain items that are material and non-trading in nature have been drawn out as exceptional such that the effect of these
items on the Group’s results can be better understood and to enable a clearer analysis of trends in the Group’s underlying
performance.
£m 2021 2020
Footprint restructuring – credits 0.3 0.2
M&A and integration - costs – (0.8)
M&A and integration - credits 0.6 0.6
M&A and integration - net 0.6 (0.2)
Loss on disposal of business – (1.8)
Impairment charges (1.9) –
Impairment credits 1.6 –
Impairment - net (0.3) –
0.6 (1.8)
Footprint restructuring
The footprint restructuring credit in the current and prior
year corresponds to the release of excess provisions made
relating to the streamlining of the International footprint.
The classification as exceptional is consistent with the
original charge.
M&A and integration
The M&A credit of £0.6 million in the current year relates
to the release of provisions made as part of the business
combination accounting for previous acquisitions, which
are no longer required. M&A and integration costs in the
previous year relate to costs associated with the integration
of businesses acquired in 2018, predominantly Ashland.
Loss on disposal of business
The £1.8 million charge in the prior year relates to a loss on
the disposal of the Ventrolla business, which was divested
on 5 November 2020 for nominal consideration.
Impairment
The impairment charge of £1.9 million in the current year
relates to impairment of certain of the Group’s intangible
assets following the decision to commence a multi-year ERP
upgrade. The impairment credit of £1.6 million relates to
the release of a portion of provisions made in 2019 against
inventory and other assets associated with the new door
seals product in North America which is no longer required.
The classification as exceptional is consistent with the
original charge.
Finance costs
Net finance costs decreased to £9.1 million (2020: £12.1
million).
Interest payable on bank loans, private placement notes
and overdrafts decreased to £5.9 million (2020: £8.9
million), predominantly reflecting the reduction in net debt
and a reduction in the average interest rate. Interest on
lease liabilities of £2.5 million reduced slightly (2020: £2.8
million), reflecting the lower average lease liability balance
and lower interest rates.
The Group’s average cost of funds and margin payable
decreased by 30bps to 3.1% (2020: 3.4%) reflecting lower
base interest rates and a lower applicable margin due to the
reduction in leverage.
At 31 December 2021, 22.2% (2020: 43.0%) of the Group’s
adjusted debt excluding lease liabilities is held at fixed rates
of interest. This reflects the US$45 million of outstanding
debt under the US private placement programme. The
reduction from 2020 reflects the repayment of the first
tranche of this debt of US$55 million in November 2021.
Non-cash movements charged to net finance costs in the
period include amortisation of capitalised borrowing costs
of £0.5 million (2020: £0.5 million), pension interest cost of
£0.1 million (2020: £0.2 million) and a loss on revaluation
of fair value hedge of £0.1 million (2020: £Nil).
Forward exchange contracts
At 31 December 2021, the Group’s portfolio of forward
exchange contracts at fair value amounted to a net liability
of £0.3 million (2020: net liability of £0.2 million). The
notional value of the portfolio was £24.3 million (2020:
£23.7 million), comprising US dollar and Chinese renminbi
forward exchange contracts with notional values of US$28
million and RMB30 million respectively (2020: US$23
million and RMB60 million). These contracts have a range of
maturities up to 17 June 2022. During the year, a fair value
loss of £0.1 million (2020: fair value gain of £0.3 million)
was recognised directly in the income statement.
Taxation
The Group reported an income tax charge of £14.4 million
(2020: £10.4 million), comprising a current tax charge of
£17.3 million (2020: £14.1 million) and a deferred tax credit
of £2.9 million (2020: credit of £3.7 million), reflecting an
effective tax rate of 22.5% (2020: 21.8%). The increase in
the income tax charge reflects the increase in profit before
tax as well as the one-off release of an excess provision
in 2020.
The adjusted tax charge was £18.8 million (2020: £15.3
million) representing an adjusted effective tax rate of 23.1%
(2020: 22.4%).
During the period, the Group paid corporation tax of £17.7
million (2020: £13.8 million). This reflects a cash tax rate
on adjusted profit before tax of 21.7% (2020: 20.2%). The
increase reflects the higher charge and timing of payments
on account.
Earnings per share
Basic earnings per share increased by 33.1% to 25.4 pence
(2020: 19.1 pence). Adjusted earnings per share increased
to 32.1 pence (2020: 27.2 pence), reflecting the increase
in profit after tax. There is no material difference between
these calculations and the fully diluted earnings per share
calculations.
Annual Report and Accounts 2021 Tyman plc 41
STRATEGIC REPORT
Cash generation, funding and liquidity
Cash and cash conversion
£m 2021 2020
Net cash generated from operations 57.0 95.9
Add: Pension contributions 2.8 1.7
Add: Income tax paid 17.7 13.8
Less: Purchases of property, plant and equipment (16.1) (9.9)
Less: Purchases of intangible assets (4.5) (0.6)
Add: Proceeds on disposal of PPE 0.8 –
Operational cash flow after exceptional cash costs 57.7 100.9
Exceptional cash costs 0.2 4.2
Operational cash flow 57.9 105.1
Less: Pension contributions (2.8) (1.7)
Less: Income tax paid (17.7) (13.8)
Less: Net interest paid (8.8) (12.5)
Less: Exceptional cash costs (0.2) (4.2)
Free cash flow 28.4 72.9
Operational cash flow in the year decreased by 44.9% to £57.9 million (2020: £105.1 million), predominantly due to a
significant working capital outflow of £33.9 million compared to an inflow of £8.3 million in 2020. Capital expenditure also
increased to £20.6 million (2020: £10.5 million) after deferral of expenditure in 2020 due to COVID-19. Operating cash
conversion in 2021 declined to 64.3% (2020: 130.9%).
Free cash flow in the period was significantly lower than 2020 at £28.4 million (2020: £72.9 million), as a result of the
lower operational cash flow and higher income tax payments on account, offset by lower interest payments and lower
exceptional cash costs.
Debt facilities
Bank and US private placement facilities available to the Group, as at 31 December 2021, were as follows:
Facility Maturity Currency Committed Uncommitted
2018 Facility Feb 2024 Multi-currency £240.0m £70.0m
5.37 % USPP Nov 2024 US$ US$45.0m –
Other facilities Various € €0.1m –
The first tranche of the USPP facility of US$55 million was repaid in November 2021.
Liquidity
At 31 December 2021 the Group had gross outstanding borrowings of £204.6 million (2020: £224.1 million), cash balances
of £58.1 million (2020: £69.7 million), committed but undrawn facilities of £123.6 million (2020: £143.1 million), as well
as potential access to the uncommitted £70.0 million accordion facility. This provides immediately available liquidity of
£180.8 million (2020: £210.4 million).
Net debt at 31 December 2021 was £145.8 million (2020: £153.2 million). Adjusted net debt, which excludes lease
liabilities and unamortised finance arrangement fees was £91.7 million (2020: £100.6 million), with the reduction reflecting
operational cash generation and movements in foreign exchange.
Covenant performance
At 31 December 2021 Test Performance
(1)
Headroom
(2)
Headroom
(2)
Leverage < 3.0× 0.9x £79.8m 77.8%
Interest cover > 4.0× 17.6x £79.2m 77.2%
1
Calculated covenant performance consistent with the Group’s banking covenant test (banking covenants set on a frozen GAAP basis and
not impacted by IFRS 16).
2
The approximate amount by which adjusted EBITDA would need to decline before the relevant covenant is breached.
At 31 December 2021, the Group retained significant headroom on its banking covenants. Leverage at the year end was
0.9x (2020: 1.1x), reflecting the higher adjusted EBITDA and lower level of net debt. Interest cover at 31 December 2021
was 17.6x (2020: 10.5x), largely reflecting the lower interest expense and an increase in EBITDA.
Tyman plc42 Annual Report and Accounts 2021
Financial review continued
Balance sheet – assets and liabilities
Working capital
£m FY 2020 Mvt FX 2021
Inventories 84.0 53.9 (0.1) 137.8
Trade receivables 63.1 7.6 (0.8) 69.9
Trade payables (55.1) (23.8) 0.5 (78.4)
Trade working capital 92.0 37.7 (0.4) 129.3
Trade working capital at the year end, net of provisions, was £129.3 million (2020: £92.0 million).
Inventories increased by £53.8 million to £137.8 million
(2020: £84.0 million), in order to meet higher levels of
demand, as well as to provide a buffer in light of the
extended Chinese New Year period, energy restrictions in
China, ongoing global freight disruption and the need to
de-risk key material availability. The inventory build was
also magnified by the impact of material cost inflation. The
provision for slow moving and obsolete inventory is slightly
higher at £19.5 million (2020: £18.9 million).
Trade receivables increased by £6.8 million to £69.9 million
(2020: £63.1 million) and trade payables increased by
£23.3 million to £78.4 million (2020: £55.1 million), each
as a result of the increased trading activity in the current
year and impact of price increases, with trade payables also
reflecting the increase in inventory.
The increase in trade working capital was reduced slightly
by £0.4 million relating to foreign exchange.
Capital expenditure
Gross capital expenditure increased to £20.6 million
(2020: £10.5 million) or 1.61x depreciation (excluding
RoU asset depreciation) (2020: 0.74x), as the Group
resumed investment following the deferral of most non-
essential expenditure in 2020 in light of COVID-19. Capital
expenditure relating to intangible assets has increased
significantly to £4.5 million (2020: £0.6 million) due to the
commencement of a multi-year ERP upgrade. Net capital
expenditure was £19.8 million (2020: £10.5 million), which
included £0.8 million of proceeds from disposals.
Goodwill and intangible assets
At 31 December 2021, the carrying value of goodwill
and intangible assets was £430.1 million (2020: £446.0
million). The reduction in goodwill and intangible assets
mainly reflects amortisation of intangible assets through the
income statement of £18.8 million (2020: £20.3 million).
Provisions
Provisions at 31 December 2021 reduced to £6.2 million
(2020: £8.9 million), primarily reflecting the release
of provisions made on acquisitions that are no longer
necessary given the passage of time.
Balance sheet – equity
Shares in issue
At 31 December 2021, the total number of shares in issue
was 196.8 million (2020: 196.8 million) of which 0.5 million
shares were held in treasury (2020: 0.5 million).
Employee Benefit Trust purchases
At 31 December 2021, the EBT held 0.8 million shares
(2020: 1.1 million). During the period, the EBT purchased
0.1 million shares in Tyman plc at a total cost of
£0.3 million.
Dividends
A final dividend of 8.9 pence per share (2020: 4.0 pence),
equivalent to £17.4 million based on the shares in issue
as at 31 December 2021, will be proposed at the Annual
General Meeting (2020: £7.8 million). The total dividend
declared for the 2021 financial year is therefore 12.9 pence
per share (2020: 4.0 pence), reflecting a return to the
Group’s progressive dividend policy after a pause in 2020
due to COVID-19 uncertainty. This equates to a Dividend
Cover of 2.50x, in line with the Group’s target range of
2.00x to 2.50x adjusted EPS.
The ex-dividend date will be 28 April 2022 and the final
dividend will be paid on 27 May 2022 to shareholders on the
register at 29 April 2022.
Only dividends paid in the year have been charged against
equity in the 2021 financial statements. Dividend payments
of £15.6 million were paid to shareholders during 2021
(2020: £Nil).
Annual Report and Accounts 2021 Tyman plc 43
STRATEGIC REPORT
Other financial matters
Return on capital employed
ROCE increased by 220bps to 14.5% (2020: 12.3%) as a result of the strong adjusted operating profit, a reduction in the
average carrying value of intangible assets through amortisation and the impact of foreign exchange movements on capital
employed, partially offset by higher average working capital.
Currency
Currency in the consolidated income statement
The principal foreign currencies that impact the Group’s results are the US dollar and the euro. In 2021, sterling was
stronger against both the US dollar and Euro when compared with the average exchange rates in 2020.
Translational exposure
Currency US$ Euro Other Total
% mvt in average rate 7.2% 3.4%
£m Revenue impact (27.9) (2.9) (3.1) (33.9)
£m Profit impact
(1)
(4.4) (0.4) (0.6) (5.4)
1c decrease impact
(2)
447k 101k
1
Adjusted operating profit impact.
2
Defined as the approximate favourable translation impact of a 1c decrease in the sterling exchange rate of the respective currency on the
Group’s adjusted operating profit.
The net effect of currency translation caused revenue and adjusted operating profit from ongoing operations to decrease by
£33.9 million and £5.4 million respectively compared with 2020.
Transactional exposure
Divisions that purchase or sell products in currencies other than their functional currency will potentially incur transactional
exposures. For purchases by the UK and Ireland division from the Far East, these exposures are principally sterling/US
dollar or Chinese renminbi. For purchases by the International division’s Australian business from the US and the Far East,
these exposures are principally Australian dollar/US dollar or Chinese renminbi.
The Group’s policy is to recover adverse transactional currency movements through price increases or surcharges. Divisions
typically buy currency forward to cover expected future purchases for up to six months. The objective is to achieve
an element of certainty in the cost of landed goods and to allow sufficient time for any necessary price changes to be
implemented.
Foreign exchange hedges of sterling against the US dollar and renminbi resulted in a loss of £0.1 million in 2021 compared
to a gain of £0.3 million in 2020. The Group’s other transactional exposures generally benefit from the existence of natural
hedges and are immaterial.
Currency in the consolidated balance sheet
The Group aims to mitigate the translational impact of exchange rate movements by denominating a proportion of total
borrowings in those currencies where there is a material contribution to Adjusted Operating Profit. Tyman’s banking facility
allows for funds to be drawn in those currencies.
The Group’s gross borrowings (excluding leases) are denominated in the following currencies:
2021 2020
£m Gross % Gross %
US dollars (105.2) 70.2 (108.2) 63.5
Euros (44.6) 29.8 (62.1) 36.5
Gross borrowings (149.8) (170.3)
Tyman plc44 Annual Report and Accounts 2021
Financial review continued
2022 technical guidance
Working capital will remain high due to the impact of
inflation and to support supply chain resilience, with a
minimal net cash flow impact year on year.
Capital expenditure in the 2022 financial year is expected
to be £25–£30 million, reflecting remaining catch up of
expenditure deferred from 2020 and investment in new
product development, operational excellence, and systems
upgrades.
Operating cash conversion is expected to increase to
between 80%–90%, reflecting the elevated levels of
working capital and the increased capital expenditure. The
Group’s long-term target remains at 90% per annum.
Leverage is expected to remain below the target range of
1.0× to 1.5× adjusted EBITDA absent any M&A activity.
Interest charge is expected to be £7–£8 million, reflecting
lower debt levels and a lower average interest rate.
The adjusted effective tax rate is expected to be
c. 23.0%–25.0%.
Jason Ashton
Chief Financial Officer
Annual Report and Accounts 2021 Tyman plc 45
STRATEGIC REPORT
Our 2030 sustainability roadmap
Roadmap pillar Ambition Plans Targets
D
e
f
i
n
e
G
r
o
w
S
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t
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n
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e
o
p
e
r
a
t
i
o
n
s
F
o
c
u
s
Transform our health,
safety and environmental
performance
• Safety is our first
language
• Reduce our carbon
footprint
• Water stewardship
• Waste management
• LTIFR < 1.0 by 2022
• TRIR < 3.0 by 2026
• Carbon neutral
operations by 2030
(Scope 1 and 2
emissions)
• 40% water reduction
/£m revenue by 2022
• Zero waste to landfill
by 2026
D
e
f
i
n
e
G
r
o
w
S
u
s
t
a
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n
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b
l
e
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e
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t
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t
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s
S
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n
a
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e
o
p
e
r
a
t
i
o
n
s
F
o
c
u
s
Be recognised as an
employer that people want
to work for
• Employee engagement
• Diversity, equity &
inclusion
• Growing our talent
• Community partnerships
• Gender diversity >30%
at all levels
D
e
f
i
n
e
G
r
o
w
S
u
s
t
a
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n
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e
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t
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s
S
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n
a
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l
e
o
p
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r
a
t
i
o
n
s
F
o
c
u
s
Help our customers protect
the planet and create safer,
more inclusive communities
• Positive-impact solutions
• Circular economy
• Sustainable materials
• Responsible sourcing
• YoY increase in %
revenue from positive
impact solutions
• 100% sustainable
packaging by 2026
During 2021, the Group began work to embed the Tyman
sustainability roadmap into its strategy and positively
impact the UN SDGs through sustainable operations,
sustainable culture and sustainable solutions. Sustainability
resources were strengthened at divisional level with the
appointment of two new sustainability managers to help
drive the deployment of divisional sustainability plans.
Early priorities have included completing the roll-out of
the Group safety leadership programme, establishing
global safety standards to address areas of highest risk,
eliminating single-use plastic packaging, reducing water,
waste and operational carbon emissions and developing
more sustainable products.
External advisers were appointed to support the delivery
of two new climate related workstreams to strengthen the
long-term resilience of the Group. The first, on setting a
Science Based Target (SBT) has quantified the Group’s
value chain carbon footprint and the second, deepened the
Group’s understanding and disclosures of climate related
risks and opportunities in response to the TCFD framework.
Read more about the TCFD framework on pages 68 to 77.
Sustainability excellence is embedded in our ‘Focus, Define, Grow’ business strategy. For Tyman, this means addressing
our own operational climate impacts as well as designing products that promote climate resilience through energy
efficiency, hazard protection and product decarbonisation. TCFD provides us with a framework to systematically assess
climate impacts so we can build business resilience and ultimately drive positive environmental and societal impact
through more sustainable solutions. We are pleased to be an official TCFD supporter in October 2021.”
Jo Hallas
Chief Executive Officer
Sustainability review
Tyman plc46 Annual Report and Accounts 2021
Annual Report and Accounts 2021 Tyman plc 47
STRATEGIC REPORT
The sustainable operations strategy pillar aims to transform our health, safety and environmental performance
through operational excellence.
Goal SDG Target Our planned contribution
Find out
more
Target 8.8 Promote safe and
secure working environments
for all workers.
Achieving world-class levels of safety performance
and wellbeing programmes across the Group’s
global operations.
Safety
excellence
(page 48)
Target 6.4 By 2030,
substantially increase water-use
efficiency and address water
scarcity.
Achieving water efficiency targets and undertaking
water stress mapping to identify priority areas for
improvement in our operations.
Water
stewardship
(page 58)
Target 7.2 By 2030, increase
substantially the share of
renewable energy in the global
energy mix.
Energy efficient operations, use of renewable
electricity supplies and on-site renewables to reduce
our emissions of greenhouse gases.
Energy
and GHG
emissions
(page 54)
Target 12.5 By 2030,
substantially reduce waste
generation through prevention,
reduction, recycling and reuse.
Waste minimisation and zero waste to landfill in our
operations.
Waste
management
(page 58)
Safety excellence
Safety is our first language. It is a focus at every level
of the Group from the Board and ExCo to divisional
leadership teams, site management and functional teams.
Local management is responsible for health and safety
performance with oversight provided by dedicated Health,
Safety and Sustainability (HSS) leads in place in each
division.
All our businesses have health and safety management
systems in place to identify, control and take action on
risks in the workplace, alongside training, audits and local
management reviews. Where considered appropriate for
their particular markets, our businesses also seek external
certification to international health and safety standards.
Following the divestment of Ventrolla, two UK plants
(Henlow and Newton Aycliffe) are certified to ISO 45001.
Safety leadership training, together with the deployment
and audit of Group safety standards formed the safety
excellence priorities for 2021. Since its launch in early 2020,
nearly 500 people managers have successfully completed
the Group’s flagship two day safety leadership programme,
equipping them with the skills to engage and coach their
teams on safety. Now that the initial phase of deployment is
complete, it has been extended to new hires.
Four Group safety standards were deployed during the year
covering key areas of risk for machinery safety, working
at height, manual handling and forklift truck operations.
This brings the total implemented to date to six, with Lock
Out Tag Out (LOTO) and electrical safety deployed in the
previous year. Two new standards on confined space entry
and contractor management are planned for 2022.
Sustainable operations
For all standards, each Tyman facility completes a gap
analysis against the requirements and develops a corrective
action plan to address areas for improvement. These plans
and compliance with the requirements of the standard are
then checked with divisional audits. Over 1,100 corrective
actions were closed out in 2021 and more than 30 audits
completed using internal or external resources. A ban on
using hands-free mobile phones while driving on company
business has also been introduced following a review of the
compelling research on this topic.
Tyman plc48 Annual Report and Accounts 2021
Sustainability review continued
Tyman health and safety management system
Board of Directors
Health and safety management
systems provide feedback
to local management on
effectiveness of health and
safety arrangements
Chief Executive Officer
Overall accountability for health and
safety performance across the Group
Executive Committee
• CEO accountability discharged to
local management through the
Executive Committee
• Divisional presidents regularly
review performance and
effectiveness of arrangements
Local Management
• Responsible for health and safety
performance
• Adherence to Group and divisional
health and safety policies,
standards, reporting requirements
• Compliance with health and safety
regulations
Health and Safety Management
Systems
• Health and safety committees
• Identify, assess and take action
to control risks, including safe
working practices
• Employee training & engagement
• Audit and management review
Local management report on
health and safety performance
at least weekly to divisional
presidents
Divisional presidents report
performance monthly to Tyman
CEO at BPR meetings
Group HSS Forum
• Monthly review chaired by
Group HSS Director with
divisional HSS leads
• Health and safety performance
• Share incident learnings and
track corrective actions
• Develop and deploy best
practice
Group HSS Director
• Reports to the CEO
• Works with the ExCo, senior
leaders and divisional HSS
managers to drive health and
safety performance
• Develop group wide
programmes and strategies
Machinery safety
The deployment of Group
safety standards goes
beyond local regulatory
requirements by introducing
globally applicable best
practice safety measures
and encourages innovative
approaches to reduce risk.
Following the introduction
of the machinery safety
standard, our plant in
Brampton, Canada used
3-D printing to make new
bespoke guards for stacker
machines (left) and riveter
machines (right). £390k
was invested in new and
replacement guards across
the plant.
3-D printed machinery guarding, Brampton, Canada
Annual Report and Accounts 2021 Tyman plc 49
STRATEGIC REPORT
Safety performance – all employees (permanent and temporary)
1
The Group continues to report on a comprehensive suite of leading and lagging KPIs detailed below.
Targets 2021 2020 2019 2018 2017
Lost Time Incident Frequency Rate
(LTIFR)
2
<1.0 by
2022 4.4 3.1 4.0 4.8 6.2
Total Recordable Incident Rate
(TRIR)
3
<3.0 by
2026 9.9 7.5 7.6 n/a n/a
Number of fatalities 0 0 0 0 0
Number of serious incidents
4
zero 0 1 4 n/a n/a
Number of lost time incidents 37 23 34 44 49
Number of Hi-Potential Near Miss
Incidents
5
18 24 21 n/a n/a
Number of safety improvement
opportunities (unsafe act/condition) 7,439 7,348 10,065 9,756 7,994
Number of safety leadership tours 2,603 1,635 1,363 n/a n/a
Hours worked 8,371,887 7,377,696
6
8,598,679 9,141,132 7,962,376
1
Covers all permanent and agency staff working under the Group’s direct supervision worldwide. Injuries to visitors or contractors reported
separately.
2
Lost Time Incident Frequency Rate per 1 million hours worked (incidents resulting in one or more days away from work, excluding the day
of the incident) including 21 COVID-19 cases resulting from workplace transmission at two locations in North America and two in the UK
in 2021 (2020: 12 cases). All affected employees testing positive for COVID-19 following workplace transmission have returned to work
following completion of self-isolation. The LTIFR excluding COVID-19 cases for a like-for-like comparison to previous years is 1.9 for 2021
(2020: 1.5).
3
Total Recordable Incident Rate for all work-related injuries or illnesses to employees/agency staff that causes fatality, unconsciousness,
lost workdays, restricted work activity, job transfer or medical care beyond first aid, per 1 million hours worked. Includes 21 x COVID-19
workplace transmission cases in 2021 (2020: 12). The TRIR excluding COVID-19 cases for a like-for-like comparison to 2019 is 7.4 in
2021 (2020: 5.8).
4
Serious incidents are those deemed life threatening or life changing due to their severity.
5
HiPo incidents did not cause serious injury but could have done under different circumstances.
6
Revised definition introduced from 2020 excluding all types of absence such as holiday, furlough and other non-working time.
Scan this QR code to access the Tyman
sustainability data table with all the Group’s
safety metrics recorded.
Tyman plc50 Annual Report and Accounts 2021
Sustainability review continued
1
Workplace transmission cases due to likely exposure to COVID-19
following ‘close contact’ identified in the work environment (<2m
for 15 minutes or more).
High levels of operational intensity and the COVID
pandemic negatively impacted the Group’s core safety
metrics covering the LTIFR and TRIR during the year. The
LTIFR, including COVID workplace transmission cases,
increased by 42% to 4.4 (2020: 3.1) and the TRIR by 33%
to 9.9 (2020: 7.5). For the first time in three years, no
serious life-changing injuries were sustained.
A detailed analysis of the physical, non-COVID related,
lost time and other recordable injuries was undertaken
during the year and nearly half (48%) were sustained by
employees with less than a year’s service. Furthermore,
the plants in Atherstone, Budrio, Owatonna and Statesville
accounted for over two-thirds (69%) of all injuries. Safety
improvement plans have been deployed for these plants
including improved new hire training, supervisor leadership
development and coaching, reinvigorated safety leadership
tours and employee engagement measures, together with
the targeted application of structured problem solving
techniques through safety kaizen events. Progress against
these plans will be tracked going forward.
One lost time injury was reported during the year involving
a contractor operating a forklift truck in our Budrio
warehouse, where he bruised his back. Forklift truck
operations are outsourced at this facility, using their own
vehicles and this incident was subject to an investigation by
the local authority. This is a rare event for the Group and
the first one recorded in the three years that this metric has
been in place.
Despite the disappointing number of injuries this year, many
of the Group’s plants continue to achieve safety excellence.
13 of our 19 manufacturing plants recorded zero lost time
incidents in 2021, 10 have achieved two years since an LTI
and both the Brampton and Zanesville plants have gone
more than five years since an LTI. The Group’s performance
remains well below comparable industry benchmarks that
give an LTIFR between 5.5 – 8 and a TRIR of 17.5 - 26.
The Group is committed to building a culture of safety
excellence for the long-term and uses a number of
leading indicators to track progress towards this goal. The
number of safety leadership tours and safety improvement
opportunities are both trending upwards versus the prior
year. Lessons learned from Hi-Potential near miss and
other incidents are shared across the Group and where
appropriate Group safety alerts are issued and corrective
actions tracked to closure.
Health surveillance programmes are also in place across
the Group for routine exposures such as noise and airborne
dust/fume from painting and welding. No occupational
health exposures resulted in lost time during the year
(2020: zero).
1
Source: US Bureau of Labor Statistics 2020 for other plastics
manufacturing (NAICS 32619), window and door manufacturing
(332321), hardware manufacturing (3325) and turned product
and screw, nut and bolt manufacturing (33272)
https://www.bls.gov/web/osh/summ1_00.htm
COVID-19 precautions
During the year the pandemic remained an ongoing
operational challenge, with exposure outside of the
workplace driving cases internally. Where positive cases
are identified, contact tracing is undertaken to determine
the likely source and whether there is a reasonable
likelihood of workplace transmission of the virus. Where
such transmission is identified, investigations are carried
out to determine lessons learned and share best practices
across the Group during weekly coronavirus crisis calls. No
workplace exposure cases have resulted in hospitalisation,
with employees affected returning to work after self-
isolation.
The Group continues to apply a range of COVID-19
protocols across its operations to mitigate the ongoing risks
of exposure to the virus. In addition to the precautions
outlined in last year’s report, the Group has upgraded
its specification for face coverings (minimum surgical
masks and up to FFP2 standard), modified the operation
of ventilation systems to increase fresh air circulation,
introduced employee rapid flow testing where kits are
readily available and introduced CO monitors to measure
changes to indoor air quality. Communication campaigns
continue to encourage the right COVID behaviours outside
of work as well as inside and promote vaccination uptake
among our employees.
Lost Time Frequency Rate (LTIFR) per 1
million hours worked
Lost Time Incidents by Cause (2021 vs 2020)
2021 2020 2019 2018
7
6
5
4
3
2
1
0
4.4
3.1
4.0
4.8
6.2
2017
2021 2020
25
20
15
10
5
0
1 1
2 2
5
9
6
1
21
12
0 0
Repetitive
strain/
motion
Slip,
trip, fall
Burns &
scalds
Pinch/
cut/
contact
Manual
handling
Other COVID1
Annual Report and Accounts 2021 Tyman plc 51
STRATEGIC REPORT
Safety in numbers: 2021 leading indicators
Wellbeing
The COVID-19 pandemic has heightened societal awareness
of mental health and wellbeing. High levels of product
demand during the year placed additional pressures on the
Group’s employees worldwide, including those in customer
facing and procurement roles. A number of interactive and
highly impactful personal resilience and conflict resolution
courses were run across the Group to help employees find
the right coping strategies that worked for them. Trained
Mental Health First Aiders are in place in the UK. An
Employee Assistance Programme has been deployed across
the Group and practical research continues on wellbeing
initiatives.
Ongoing collaboration with
the University of Padua
Following a research project initiated in 2020 with
the University of Padua, 40 managers at our two
Italian plants completed three days of wellbeing
training in 2021 covering health leadership, positive
management, team working and conflict resolution.
A ½ day wellbeing awareness course will be rolled out
to all employees in Italy through a train-the-trainer
approach in collaboration with the university.
Supporting employee wellbeing
Employee Assistance Programme (EAP) services available
to employees in the US and the UK, have now been
extended to all employees globally. A range of free to use,
confidential services for emotional support and counselling
are now available 24/7 covering work-life issues such as
relationship management, coping with grief or stress,
alcohol or drug misuse and finding solutions to work-related
issues or conflict. Employees can access the service via an
App, website, telephone or through to face-to-face support.
During 2022, four facilities will be collaborating with the
University of Padua and King’s College London through two
research projects to understand how best to leverage these
EAP services to improve employee wellbeing.
2,603
safety leadership tours
conducted by managers and
supervisors (2020: 1,635)
42,278
hours of training
(2020: 23,656)
7,439
safety improvement
opportunities identified by
employees (2020: 7,348)
18
Hi-potential near miss
incidents investigated and
learnings shared (2020: 24)
6
global standards
deployed since 2020
Tyman plc52 Annual Report and Accounts 2021
Sustainability review continued
STRATEGIC REPORT
Annual Report and Accounts 2021 Tyman plc 53
Environment
Environmental management systems
Our businesses maintain policies and programmes for
managing the environment, including compliance with
local regulations. These policies and management systems
cover areas such as the use of materials, are aligned to the
principles of reduce, re-use and recycle and ongoing energy
and water efficiency programmes. These measures help
improve production efficiencies, deliver compliance with
legal obligations, reduce costs and minimise the Group’s
environmental impacts.
Where considered appropriate for their particular
markets, our businesses also seek external certification to
international environmental standards. Eight locations in
the UK and Italy have environmental management systems
in place that are externally certified to the ISO 14001
international standard, representing 28% of the Group’s
revenue (2020 22%). We believe our approach to a more
sustainable future is best served through the targets and
ambitions set out in our sustainability roadmap (see page
46) rather than extending the procedural elements of ISO
14001 to other locations.
Energy and greenhouse gas emissions
The Group measures and reports its global Greenhouse Gas
(“GHG”) emissions according to the UK Companies Act 2006
(Strategic Report and Directors’ Reports) Regulations 2013.
Scope 1 and 2 emissions are reported and in line with best
practice under the Science Based Target initiative (SBTi)
including relevant categories of Scope 3 emissions. The
Group applies the GHG Protocol as the basis for reporting
GHG emissions from its manufacturing, warehousing and
office facilities over which it has operational control.
The Group’s Scope 1 and 2 emissions in TCO
2
e per £m
revenue decreased by 7% in 2021 to 62.3 (2020: 67.1,
restated). This reduction is a combination of improved
operating efficiencies driven by revenue growth, a smaller
footprint following the divestments/disposals announced
in 2020, greening of the electricity grid and energy saving
initiatives. These initiatives include switching from propane
gas powered to electrically charged forklift trucks in Cannon
Falls and Sydney, installing a new compressed air system
for the Budrio paint plant and LED lighting upgrades at the
Monterrey, Valinhos and Trumann manufacturing plants,
and the Zoo warehouse in Carlisle.
The installation of a new 1.2MW roof-top solar array and
electric vehicle charging points at our Wolverhampton, UK
facility has also commenced and will be complete in early
2022. This is expected to generate up to 50% of the site’s
electrical power needs. Identifying and implementing more
energy efficiency projects will be a major focus in 2022,
supported by the deployment of a sustainable operations
playbook to share best practice measures to save energy,
water and waste.
Scope 1 and 2 emissions TCO
2
e / £m revenue
2019
69.5
90.00
80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
2021
62.3
2020
67.1
2018
80.0
2017
73.5
Water consumption m3/£m revenue
20172019
889
836
1000
800
600
400
200
0
1000
2021
452
2020
818
2018
889
Tyman plc54 Annual Report and Accounts 2021
Sustainability review continued
Energy and GHG emissions
2026
Target 2021 2020
2019
(baseline) 2018 2017
UK Scope 1 emissions (TCO
2
e) 549 711
Offshore (outside UK)
Scope 1 emissions (TCO
2
e) 12,010 10,959
Total global Scope 1 direct
emissions TCO
2
e 12,559 11,670 12,627 13,988 12,046
UK Scope 2 emissions (TCO
2
e) 1,077 1,057
Offshore (outside UK)
Scope 2 emissions (TCO
2
e) 25,962 25,681
Total global Scope 2 indirect
emissions TCO
2
e – location based 27,039 26,738 30,002 33,327 26,376
Total global Scope 2
3
indirect
emissions TCO
2
e – market based 27,039 26,738 30,002 33,327 26,376
Total direct and indirect emissions
(Scope 1 & 2) TCO
2
e 39,598 38,408 42,629 47,315 38,423
Intensity ratio (Scope 1 & 2)
TCO
2
e per £m revenue 34.7 62.3 67.1 69.5 80.0 73.5
Global energy consumption used to
136,235,840 127,049,716
Scope 3
5
indirect emissions
Purchased goods and services
(metals & polymers)
6
– category 1a – 274,508 337,543
Upstream transportation &
distribution (category 4) – 12,441 19,521
Use of sold products (category 11) – 39,821 28,715
Total Scope 3
5
other
indirect emissions TCO
2
e
(category 1a, 4, 11) – 326,771 385,780
1
Direct emissions through combustion of fuels and process emissions using DEFRA GHG and IEA conversion factors. Refrigerant emissions,
e.g. from process and building cooling systems were collected for the first time in 2021 – accounting for 125 TCO2e. Restated emissions in
2020 and 2019 following updated natural gas consumption data. Broken down by UK and offshore emissions required by SECR (see below).
2
Indirect emissions through consumption of electricity (location-based method) using the latest DEFRA GHG and IEA conversion factors.
2020 emissions restated to reflect latest IEA data. Broken down by UK and offshore emissions required by SECR (see below).
3
Indirect emissions through consumption of electricity (market based method).
4
Required by the UK Government’s Streamlined Energy and Carbon Reporting (SECR) using DEFRA conversion factors for natural gas and
combustion of fuels for heating and process use, electricity consumption and transport fuel (from quantities consumed) across the Group’s
global operations.
5
Updated emissions inventory following full value chain mapping exercise conducted as part of the Science Based Target setting exercise to
establish the Group’s baseline, replacing earlier estimates for 2019-2020. Selected emissions sources only, full reporting of 10 applicable
Scope 3 emissions categories is available online in the Tyman sustainability data table.
6
Calculated in 2021 using US EPA’s EEIO supply chain emissions factors based on a mix of material weight and spend data as part the
Group’s SBT work.
Annual Report and Accounts 2021 Tyman plc 55
STRATEGIC REPORT
Tyman’s Value
Chain Carbon
Emissions (TCO
2
e)
2019 baseline
Raw materials Upstream logistics Tyman operations Downstream logistics Products in use
Products end-of-life
treatment
Purchased
goods & services
(direct) 72.2%
• Aluminium 29.2%
• Steel 8%
• Zinc 8.7%
• Plastics /
polymers 17.2%
• Packaging 1.3%
• Brass / other
metals 1.2%
• Specialised
components
/ motors /
batteries 6.5%
Purchased
goods & services
(indirect) 1.0%
Upstream
transportation &
distribution 4.2%
Natural gas &
vehicle fuel 2.7%
Electricity 6.4%
Fuel & energy
related
activities 1.5%
Business
travel 0.4%
Capital goods 1.0%
Waste generated
in operations
0.3%
Employee
commuting 1.7%
Downstream
transportation &
distribution 1.3%
Products in use
(electro-mechanical
& smartware) 6.1%
End-of-life disposal/
treatment of sold
products 1.4%
Scope 1: 12,627 3%
Scope 2: 30,002 6%
Scope 3: 424,969 91%
Value Chain Carbon Footprint (2019)
13.9%73.2% 4.2%
SBT and value chain emissions
The Group formally committed to setting a Science Based
Target (SBT) in February 2021 and completed the first
step in developing this target by quantifying its Scope 3
footprint, building on its existing measurement of Scope
1 and 2 emissions. In its baseline year of 2019, 91% of
the Group’s total carbon footprint of 467,598 tonnes, was
attributable to Scope 3 emissions. Raw materials are the
biggest contributor, at 72% of the total, driven by the
Group’s purchasing of aluminium, steel, zinc and polymers.
A further 4% of the footprint is covered by upstream
logistics and 6% is estimated to come from products in use
over their design lifetime, driven by the Group’s smartware
home security products and electro-mechanical components
for windows and roof-hatches. The Group examined both
its 2019 and 2020 footprint and elected for the former in
determining is baseline, to remove the impact of COVID
lockdowns the following year. Scope 3 emissions in 2020
declined in all categories reflecting reduced product sales,
with the exception of product in-use emissions which
recorded a rise following the launch of the new ERA home
protect and security floodlight range of products.
Now that the Group has established its 2019 Scope 3
emissions baseline, work will continue in 2022 to develop
the target to reduce these emissions in line with the climate
science before submitting it to the SBTi for validation,
and develop the measurement systems to track progress
against the most important categories such as materials.
Mitigating emissions
With raw materials dominating the footprint, the Group
identified three opportunities to decarbonise its products.
These include selecting lower carbon materials where
possible (steel has a lower embodied footprint than
aluminium for example), optimising product designs to
minimise the amount of material used in the product
(dematerialisation or lightweighting) and specifying
increased levels of recycled content as part of a circular
economy approach (see page 66).
Addressing the Group’s Scope 1 and 2 footprint (principally
natural gas and electricity use) will involve a phased
approach comprising the wider adoption of best practice
energy efficiency measures, procuring 100% renewable
electricity where available, deploying renewable energy
technologies such as solar, switching to hybrid and battery
electric company vehicles and as a last resort, using carbon
removal technologies such as nature-based carbon offsets
to tackle the remaining hard-to-reduce emissions.
Tyman plc56 Annual Report and Accounts 2021
Sustainability review continued
Tyman’s Value
Chain Carbon
Emissions (TCO
2
e)
2019 baseline
Raw materials Upstream logistics Tyman operations Downstream logistics Products in use
Products end-of-life
treatment
Purchased
goods & services
(direct) 72.2%
• Aluminium 29.2%
• Steel 8%
• Zinc 8.7%
• Plastics /
polymers 17.2%
• Packaging 1.3%
• Brass / other
metals 1.2%
• Specialised
components
/ motors /
batteries 6.5%
Purchased
goods & services
(indirect) 1.0%
Upstream
transportation &
distribution 4.2%
Natural gas &
vehicle fuel 2.7%
Electricity 6.4%
Fuel & energy
related
activities 1.5%
Business
travel 0.4%
Capital goods 1.0%
Waste generated
in operations
0.3%
Employee
commuting 1.7%
Downstream
transportation &
distribution 1.3%
Products in use
(electro-mechanical
& smartware) 6.1%
End-of-life disposal/
treatment of sold
products 1.4%
Scope 1: 12,627 3%
Scope 2: 30,002 6%
Scope 3: 424,969 91%
1.3% 6.1% 1.4%
2030
Mitigating Scope 1 and 2 emissions
Mitigating Scope 3 emissions
(materials)
Energy efficiency
(no/low cost and
capital expenditure
projects)
Procuring
100% renewable
electricity and
green gas
On-site/off-site
renewables
(solar panels and
power purchase
agreements)
Hybrid/electric
vehicles
Greenhouse gas
removals for
hard-to-reduce
emissions
(including nature-
based solutions)
Scope 1 emissions
Scope 2 emissions
Scope 3 emissions
Key
Weight
optimisation
Material
selection
Recycled
content
Annual Report and Accounts 2021 Tyman plc 57
STRATEGIC REPORT
Water stewardship
The Group has achieved its 2022 water efficiency target a year early, decreasing its use by 45% in 2021 to 452 m per
£m revenue (2020: 818 m/£m). This was driven by the successful commissioning of a new closed-loop water recovery
system for cooling die-cast zinc components and the elimination of a process wash stage for the treatment of stainless steel
components in Owatonna. These actions saved 189,000m of water versus the prior year, the equivalent of 75 Olympic
sized swimming pools.
Water sources
2022
Target 2021 2020 2019 2018 2017
Municipal authorities (m) 263,683 450,956 493,369 510,973 464,570
Ground water (m)
1
23,904 17,426 19,965 14,985 0
Total Water usage (m) 287,587 468,382 513,334 525,958 464,570
Water use m per £m revenue
502
Achieved 452 818 836 889 889
1
Two plants (Mexico and Brazil)
On completion of the water stress mapping exercise being undertaken as part of TCFD response (page 68), plans for
updated site-specific targets in known areas of high water stress will be developed in 2022.
Waste management
The Group generated 7,410 tonnes of waste in 2021, of which 34% was sent to landfill (2020: 35%) and 66% was
recycled/recovered (2020: 65%). Effort was focused on improving both the quality of the Group’s data and implementing
opportunities to move towards our zero waste to landfill target for both hazardous and non-hazardous wastes. 45 tonnes
of process plastic scrap was diverted from landfill in Juarez and Statesville through re-grinding and re-using to make
new product. Hazardous waste represents a relatively small proportion of the total (8%) comprising materials such as oil
contaminated rags, cutting fluids, chemicals and fluorescent light tubes.
Waste arisings
2022
Target 2021 20201 2019
Tonnes non-hazardous waste to landfill 2,118 2,083 2,301
Tonnes hazardous waste to landfill 367 418 432
Tonnes non-hazardous diverted from landfill
(recycling, incineration, composting etc.) 4,677 4,363 4,744
Tonnes hazardous diverted from landfill
(recycling, incineration) 248 155 148
Tonnes total waste arising 7,410 7019 7,625
% total waste to landfill Zero 34 35 36
Intensity ratio: total waste (non-hazardous & hazardous)
Tonne per £m revenue 11.7 12.3 12.4
1
Restated to reflect correct classification.
Biodiversity
Biodiversity is on the Group’s radar. By executing its strategy to decarbonise its value chain emissions by conserving
resources through a circular economy approach, switching to more renewable forms of energy and using nature-based
carbon removals for hard-to-reduce emissions, the Group will reduce adverse impacts on biodiversity too. Ongoing projects
to eliminate the use of single-use plastics and switching to more responsibly sourced packaging will also minimise plastic
pollution and help conserve natural habitats. The Group will continue to track developments and best practices in this area.
Tyman plc58 Annual Report and Accounts 2021
Sustainability review continued
The sustainable culture pillars aims to build an ethically-led business which is recognised as employer that
people want to work for.
Goal SDG target Our planned contribution
Find out
more
Target 16.5 Substantially
reduce corruption and bribery in
all its forms.
Building a culture of strong ethical practices at all
levels in the Group.
Ethics and
compliance
(page 59)
Target 4.7 By 2030, ensure all
learners acquire the knowledge
and skills needed to promote
sustainable development.
Growing our talent through life-long learning;
harnessing the creativity of our people in delivering
more sustainable outcomes.
Training and
development
(page 61)
Target 10.2 By 2030,
empower and promote the
social, economic and political
inclusion of all.
Engaging all our people, promoting diversity and
developing partnerships and plans to help address
social inequalities in our local communities.
Diversity,
equity and
inclusion
(page
62) Our
communities
(page 63)
Ethics and compliance
The Group believes that high standards of business ethics
are integral to the development of its culture and future
growth. Therefore, as enshrined in the Group’s “Code of
Business Ethics: “Integrity in Action”, which was published
in early 2021, we seek to maintain a reputation for integrity
in all our business dealings, and our relationships with
authorities, regulators and our workforce.
In 2021, as part of the “One Tyman” implementation, the
Group took steps to further strengthen its cultural cohesion
by implementing a comprehensive and robust business
ethics and compliance programme that also aligned with
the Group’s purpose and values. This programme covers
activities that will educate, empower, examine and enforce
ethical behaviours throughout the Group. Its design
and implementation was overseen by the Group’s Ethics
Steering Committee – a geographically and culturally
diverse cross-functional team drawn from across the
divisions.
At the heart of the business ethics and compliance
programme is the Group’s Code of Business Ethics. To
ensure that the new Code builds on the existing cultural
strengths of the divisions, it was drafted with the support
of the Ethics Steering Committee and was shaped by input
from groupwide employee focus groups. The Code was
deployed to all employees through workshops across all
but two sites of the Group in 2021; the last two sites will
conduct these workshops in Q1, 2022.
A standardised approach to the conduct of each workshop
was developed to ensure that the Code’s material and
messages would be consistently communicated to all
employees. At each such workshop, with the support of
a video message from the Group’s Executive Committee,
the participants discussed the Group’s purpose and values
before discussing how the Code would help the Group and
each of its individual stakeholders achieve their ethics
goals. The workshop facilitator then demonstrated how
each participant could use the Code’s “Integrity Check Tool”
(see Figure 1) to help them consider and deal with ethical
dilemmas before the participants were given opportunities
to work through scenarios that they might encounter in
their roles.
Sustainable culture
Annual Report and Accounts 2021 Tyman plc 59
STRATEGIC REPORT
IS IT
LEGAL?
IS IT
CONSISTENT
WITH OUR
CODE AND OUR
POLICIES?
IS IT
CONSISTENT
WITH OUR
VALUES?
DOES IT FEEL
FAIR TO THOSE
IMPACTED?
HOW MIGHT
IT LOOK TO MY
COLLEAGUES,
FAMILY, OR IN
THE MEDIA?
Does it put you
or Tyman at risk?
If the answer to any of these is
“no” or “not sure”, stop and
re-consider your options or
ask for help. Think about how
your final decision can be best
communicated to all those
impacted.
Figure 1: The Integrity Check tool
Can you speak to your
line manager about your
question or concern?
Can you speak to
another leader in
your area?
Can you speak to a
specialist (e.g. HR, Legal)
or your Integrity
Champion?
If none of these work
then contact the Tyman
SpeakUp line.
Contact your
line manager
Contact
another leader
Contact the relevant
specialist
Use the
SpeakUp line
YES
YES
YES
YES
NO
NO
NO
Figure 2: Raising a concern
The workshop participants then walked through the process
for escalating their concerns (see Figure 2) and were
introduced to the Tyman SpeakUp line. The facilitators
highlighted that the Group does not tolerate any form of
retaliation for genuine concerns and the fact that the Group
respects the anonymity of reporters in accordance with
local law.
In addition to the deployment of the new Code, a risk-based
approach was taken when training the different sites on
various business ethics and compliance topics.
The Group’s General Counsel & Company Secretary worked
closely with each of the divisions to identify areas of such
risk before engaging appropriate external facilitators
to run workshops that resulted in recommendations for
documentary and local policy or procedure amendments.
In 2022, a network of “Integrity Champions”, who are drawn
from each site, will help to embed ethical decision making
and knowledge of business ethics and compliance topics
deep in the Group.
What the Integrity Champions will do
Localise BE&C Programme materials and initiatives
Review and adapt (if necessary) the business ethics
and compliance programme material to help with local
understanding and adoption and to meet the needs of the
local operating environment.
Point of contact
Act as a point of contact and source of advice for
employees when they have a question about the Code,
concerns about conduct or face an ethical dilemma.
Champion
Generate a meaningful awareness of the importance of
ethics and the Group’s values among their colleagues and
expand the ethics vocabulary and imagination of their
colleagues.
Deliver training
Arrange, deliver or support the design of training and
campaigns about ethics, values or compliance standards.
They will include with the development of relevant case
studies and other training materials based on their
experience and knowledge of local issues and conditions.
Record and report
Help track the implementation of the business ethics and
compliance programme, and identify relevant issues and
areas of risk.
Tyman plc60 Annual Report and Accounts 2021
Sustainability review continued
Speak Up
The General Counsel & Company Secretary advises
the Board when exercising its oversight over the
development, implementation and effectiveness of
the Code.
The Group appreciates that the freedom to raise
concerns is a core component of a high-performing,
sustainable and ethical business culture where
employees are confident that they will be supported
to ‘do the right thing’. In June 2021, the Group
consolidated its two external whistleblowing platforms
onto a single one run by NAVEX Global and relaunched
this “speak up” facility to promote the focus on
the “employee voice” and to signal the conscious
cultivation of an open culture.
Ten ‘Speak up’ reports were received in 2021
(2020: 13). Each allegation was investigated under
the oversight of the General Counsel & Company
Secretary, and the findings of each investigation and
any corrective action taken were reported to the
Board. In 2021, two reports were determined to be
warranted breaches of our Code on Working Together:
one resulted in the reallocation of duties and the other
resulted in the dismissal of an employee.
The Group does not know of it being subject to any
regulatory investigation during 2021 and confirms that
it did not have to pay any fines for material regulatory
breaches in this period.
In 2022, the Group aims to further promote general
awareness of and confidence in the Group’s Speak
Up Programme by working with the Ethics Steering
Committee and Integrity Champions network.
People
Training and development
Training and development programmes across the Group
during the year, prioritised the deployment of the Group’s
purpose, values and Code, together with safety leadership
and lean excellence as well as ongoing technical/functional/
development training. Total training hours during 2021
increased to 89,376 of which 42,278 were safety related
(2020: 47,625 of which 23,656 hours were safety-related).
Participants in the purpose, values and code of ethics
training were equipped with the skills to enhance their
personal impact to help facilitate local discussions on
how best to convert the content in meaningful action and
positive behaviour change.
Following on from the successful deployment of the safety
leadership course (page 48), the Group launched its “Lean
Excellence” training programme under the auspices of
the Shingo Institute. Thirty-three executive-level and
practitioner level leaders attended three virtual workshops
and 14 course modules respectively. This programme aims
to build long-term continuous improvement capabilities
and culture across the organisation to deliver sustained
results. It is already delivering benefits in other areas of the
Tyman Excellence System such as safety and process scrap
reduction.
The Group employs 46 apprentices in Brazil, Canada,
Germany, Italy, the UK and US covering specialist toolroom
trades and die making, production, maintenance, sales,
warehousing, IT and purchasing roles. In partnership with
Sheridan collage, the Group’s Brampton facility is hiring the
next generation of skilled screw machine operators, with six
recruited in the past year.
Remuneration
When adjusting the LTIP and STIP pay structure, webinars
were organised with HR leadership and scheme participants
to discuss the operation of these schemes, including the
behaviours that they aim to encourage. The Board Director
with responsibility for workforce engagement also provided
a good conduit for direct engagement with the workforce
about a range of issues including remuneration.
The Group strongly believes in fairly rewarding its
employees. In the UK, the Group has committed to ensuring
that all its employees are paid the Real Living Wage as from
1 January 2022.
Annual Report and Accounts 2021 Tyman plc 61
STRATEGIC REPORT
Employee engagement
The Group kicked off 2021 with two “mini virtual
conference” sessions for over 100 of its leadership
population to update them on Tyman’s strategic initiatives
and to deploy the Group’s purpose, values and Code of
Business Ethics.
All locations carry out communications programmes
to engage their employees around important topics
including expected behaviours and business updates.
Communication methods include town hall meetings, team
briefings, noticeboards (including TV boards), training
sessions, newsletters, Works Council meetings, employee
engagement focus groups, leadership tours/Gemba walks,
skip-level meetings, supervisor networks and employee
recognition events, together with an increasing emphasis on
video conferencing, webinars and video messages.
Pamela Bingham, in her role as Non-executive Director
and Board member responsible for employee engagement,
continued meeting employees at all levels in the business
to understand local challenges, identify best practices
and promote a direct link to the Board. Eight virtual and
in-person meetings were held during the year with cross
functional representatives from sites in Italy, the UK and the
US (2020: nine).
30% of our employees belong to a recognised trade union
(2020: 28%). In addition to trade union representation,
a number of Works Councils exist, where required by
legislation, together with other employee consultation
groups including safety committees. The Group continues to
have positive and constructive relationships with our trade
unions that collectively represent its employees.
Diversity, equity and inclusion
To support its growth, the Group draws on the skills,
experiences and insights of a diverse workforce. Tyman’s
employment policies and practices require that an
individual’s skills, experience and talent are the sole
determinants in recruitment and career development
rather than age, beliefs, disability, ethnic origin, gender,
marital status, religion and sexual orientation. The Group
is committed to supporting employment opportunities and
non-discrimination, and that comply with relevant local
legislation and accepted employment practices.
As of 31 December 2021, the Group employed 4,159
people (2020: 4,131), of which 1,678 workers were female
representing 40% of the total headcount (2020: 41%). 35%
of the Group’s head count is based in the US, with a third in
Mexico, a further 14% in UK and 9% in Italy. The Board had
female representation of 43% (2020: 50%) and at senior
management level this was 28% with 47 managers (2020:
30%). Temporary personnel accounted for 3.4% of the
Group’s total employees in 2021 (140), of which 97% are
based in Canada, Germany, Italy, the UK and US.
Female Male Female Male
3000
2500
2000
1500
1000
500
0
63
77
147
177
1615
2404
1536
2271
Permanent FTE
Temporary FTE
2021 2020
Permanent and Temporary Headcount
FTE by Gender (2021-2020)
2021: 4,159 FTE Headcount
Canada 3%
China 2%
Italy 9%
Mexico 32%
UK 14%
USA 35%
Latin America (Argentina
and Brazil) 1%
Other Europe (France,
Germany, Greece, Portugal,
Spain) 2%
Other International
(Australia, India, UAE) 1%
Tyman plc62 Annual Report and Accounts 2021
Sustainability review continued
Community investment 2021: £80,641
Company cash donation to charity £50,822
Employee cash donation to charity £26,760
Value of staff time volunteered in company hours £2,066
In-kind contributions to local communities £993
Our communities
The management of community programmes has
traditionally been undertaken locally, with each business
focusing on those causes and relationships important
to them. During 2021 these included donations to food
banks and educational supplies to schools, fundraising
for emergency relief/re-building programmes, medical
research, pandemic safety equipment, tree planting,
scholarships and contributions to other charitable
organisations. The Group’s total community investment
in 2021 increased to £80,641 (2020: £68,384) with 60
fund-raising activities benefitting children, the elderly,
homeless and other disadvantaged groups.
During 2021, three core themes were identified for a
more co-ordinated approach across the Group. These
are housing projects for disadvantaged people, STEM
education programmes and environmental protection/
restoration initiatives. In the coming year, each division will
further develop their plans and build partnerships where
appropriate with non-profit organisations and customers
under these themes to leverage a collective contribution to
minimising equalities in our society. These engagements will
provide an opportunity for the Group’s employees to bring
its purpose and values to life, benefitting both the business
(through retention, attraction and development) and the
communities in which we are part.
Reguitti supports reforestation in the Fiemme Valley
in the Dolomites
Annual Report and Accounts 2021 Tyman plc 63
STRATEGIC REPORT
The sustainable solutions pillar aims to help our customers protect the planet and create safer, more inclusive
communities.
According to the UK Committee on Climate Change, decarbonising and adapting the UK’s housing stock of 29
million homes is critical to meeting the country’s net zero ambitions by 2050. New and replacement windows
and doors are part of the solution to decarbonising the world’s housing stock and the Group is well placed to
benefit from this transition through its current and future product offer. Developing new products that deliver
positive environmental or social outcomes in use and in how they are formulated will contribute to both the
UN SDGs and to business growth.
SDG Target Our planned contribution
Find out
more
Target 7.3 By 2030, double
the global rate of improvement
in energy efficiency.
Products that save energy by reducing thermal
losses in buildings such as Q-Lon window seals and
thermally insulated roof hatches (climate change
mitigation).
Sustainable
products
(page 65)
Target 13.1 Strengthen
resilience to adaptive capacity
to climate-related natural
disasters.
Severe weather protection solutions such as high
strength multi-point hinged patio door locks and
roof hatches for hurricane vulnerable zones (climate
change adaptation).
Sustainable
products
(page 65)
Target 11.1 By 2030, ensure
access for all to adequate, safe
and affordable housing.
Products that reduce community crime rates (alarms
and high-security certified locks or proven in crime
reduction studies), prevent injury and/or ill-health
(fire protection products and fall prevention e.g.
Pegasus and SafeGard™ child safety devices for
windows, safety handrail systems for roof hatches,
lockdown security products and anti-bacterial
coatings for door handles), or promote inclusive
living for disadvantaged / vulnerable groups such as
extended lever hardware and hybrid balances used
in nursing homes allowing easy opening by elderly
or disabled users.
Sustainable
products
(page 65)
Target 8.4 Improve global
resource efficiency in
consumption and production to
decouple economic growth from
environmental degradation.
Incorporating recycled content and responsibly
sourced materials in our products throughout
our supply chain and new product development
processes. Driven by growth in sustainable building
certification such as BREEAM, LEED and net zero
strategies.
Sustainable
products
(page 65)
Value chain
carbon
footprint
(page 56)
Target 12.2 By 2030, achieve
the sustainable management
and efficient use of natural
resources.
Target 12.4 Achieve the sound
management of chemicals and
all wastes throughout their
lifecycle.
Meeting customer requirements for sustainable
packaging and eliminating hazardous chemicals /
substances in our supply chains and addressing the
lifecycle environmental impacts of our products,
through for example, Environmental Product
Declarations (EPDs) and C2C product certifications.
Packaging
(page 66)
Conflict
minerals and
hazardous
materials
(page 67)
Sustainable
products
(page 65)
Sustainable solutions
Tyman plc64 Annual Report and Accounts 2021
Sustainability review continued
Sustainable products in use
During 2021, improvements were made to the
measurement of product revenues that positively contribute
to the UN SDGs in use, and new sustainable products from
the Group’s product pipeline were added to these revenues.
Sustainable product revenues increased to 21% of total
revenues driven by increased sales of seals, high security
locks and tilt and turn micro-ventilation products (2020:
19% restated to correct for additional tilt and turn micro-
ventilation components). Going forward, the Group has set
itself the ambition of increasing year-on-year revenues from
products that have demonstrable sustainability benefits
vs one or more of the UN SDGs. This target contributes to
the Group’s LTIP (pages 129 and 135). £36.5 million of the
Group’s 2021 revenues including ERA multi-point locks,
Giesse hardware, Q-Lon and brush pile seals were covered
by Environmental Product Declarations (EPDs) or Cradle to
Cradle (C2C) certification.
The work on SBT this year (page 56) has confirmed how
important purchased raw materials are in the Group’s value
chain footprint. Eco-design principles when applied early in
the product development process can reduce these impacts
by selecting lower carbon materials, using less material
and incorporating higher levels of recycled content (circular
economy thinking). In 2022, the Group will develop a
common eco-design tool and supporting guidance to help
our product development teams consider sustainability
impacts in their decision making. This will build on early
experience gained using the SolidWorks eco-design module,
linked to our CAD software.
Here are some further examples of how the Group’s
products positively impact the SDGs in use, either reducing
environmental impacts or by providing socially beneficial
outcomes.
2021 Sustainable Product Revenues (£138m)
Circular economy 3%
Crime reduction 20%
Energy saving 53%
Fire protection 9%
Severe weather
protection 2%
Inclusive living 3%
Safety & health
protection 9%
Sustainable
materials 1%
Smartware alarms protect
vulnerable communities and
reduce crime rates
The Group has installed 10,000 ERA Protect
TM
integrated smart alarm systems for vulnerable elderly
residents aged 65 and over in the London Borough
of Hillingdon. Alarm technology such as this has
been proven to reduce neighbourhood crime rates,
transform lives and build safer communities.
Our alarms installed in over 5,000 properties in five of
the most deprived neighbourhoods in Mansfield in the
UK, reduced domestic burglary rates by 40-80% (source:
Safe and Secure Homes independent report, 2004).
The impact of feeling safe can be profound, as one
elderly resident in Mansfield described the impact of
the project:
I’ve been burgled three times in recent years.
I have felt like a prisoner in my own home.
Having my home made safe and secure has
given me my life back.”
Annual Report and Accounts 2021 Tyman plc 65
STRATEGIC REPORT
Circular economy
With 72% of the Group’s value chain carbon footprint
attributable to raw materials purchasing, with aluminium
accounting for 29% and polymers 17%, work continues
to address these impacts. Reusing post-consumer waste
and specifying high levels of recycled content offer good
opportunities to reduce these impacts. For example, our Cannon
Falls extrusion facility uses over 900 tonnes of post-consumer
recycled PVC in its products and our hardware business in
Italy will be trialling the use of extruded aluminium with up
to 70-80% recycled content vs the current 23%. Recycled
aluminium has the benefit of using 95% less energy than virgin
aluminium. Work will continue to explore other circular economy
opportunities as the Group develops its SBT plans (page 56).
Packaging
The Group has commenced work to develop more sustainable
packaging solutions by optimising the amount of packaging
used, moving to more sustainable/renewable/fully recyclable
materials and avoiding single-use plastic packaging where
possible. Where single-use plastic is unavoidable the Group
will look to source plastics with the highest levels of recycled
content and which can be recycled or composted via
arrangements that are widely available.
The Group prioritised the elimination of single-use plastics
in 2021. For example, foam layer pads in packaging for
Bilco roof hatch safety railing products have been replaced
with a new cardboard packaging design, and a returnable
plastic reel programme for window seals was established
in collaboration with a major US customer (see page 35).
Switching to a new thinner grade of shrink wrap and new
dispenser technology in warehousing operations in the UK and
Italy has reduced plastic consumption by an estimated six
tonnes per annum, the equivalent of 700,000 plastic bottles.
Automatic packaging machines for hardware components in
our Budrio plant now use bioplastic (made from sugar cane)
as the first step in moving away from virgin fossil fuel derived
plastics. Instruction manuals for Giesse hardware have now
been replaced with a QR code, saving money as well as 1.5
million sheets of paper per annum. Trials are now underway to
replace plastic with paper alternatives on a range of products.
‘Thermally broken’ roof hatches
reduce heat losses from
buildings
Standard roof hatches typically have 2.5 cm thick
layer of fibreglass insulation, with a U-value of 0.31.
The U value (Wm/K) is a number that illustrates the
rate at which heat is transferred through a structure,
with the lower the U value meaning lower heat loss
and better energy efficiency. Independent tests show
that our thermally broken roof hatches featuring a 7.5
cm thick layer of R-20+insulation and a frame and
cover design that minimises heat transfer between
interior and metal surfaces, achieve a U-value of
0.278. This product also meets LEED standards for
recycled content and has a high solar reflectance
index (SRI), to reduce cooling needs in summer
months.
Easy opening windows
for inclusive living
The Group’s hybrid balances provided to the US
market are American Association of Medical Assistants
(AAMA) Class 5 rated, meaning they are easier to
open, with less operating force compared to other
products available. These balances are often specified
in nursing homes or other commercial applications
where elderly or disabled consumers are prevalent.
Tyman plc66 Annual Report and Accounts 2021
Sustainability review continued
Conflict minerals and hazardous materials
As Tyman is not a US-listed company, §1502 of the US
Dodd Frank Act on conflict minerals does not apply to it
directly. However, the Group abhors the human rights
abuses that are enabled by the sale of raw materials from
dubious sources and has taken steps to help it generate the
information that its customers need to disclose under §1502
of the US Dodd Frank Act.
During 2021, a review was completed to assess
opportunities to eliminate hazardous substances found
in the Group’s products or manufacturing processes
in its supply chains. The Group is now working with
trade associations such as the UK’s Surface Engineering
Association (SEA) and the European Federation of
Associations of Locks & Builders Hardware Manufacturers
(ARGE) to find alternatives to Chromium VI in electroplated
products sourced from Asia and lead used in brass alloys for
locks and other hardware components.
Product integrity
Each division is responsible for conducting appropriate due
diligence into and negotiating the terms and conditions
of trade with its suppliers. We require all our suppliers to
adhere to our Code of Business Ethics or a comparable set
of principles of business conduct, including in respect of
their regard for human rights and working conditions, and
we reserve the right to terminate a business relationship
and take appropriate action against any supplier that
breaches any part of our Code. For more information,
please refer to our Modern Slavery Statement, which is
available on our website.
The Group values its relationships with its customers and
suppliers and seeks honesty and fairness in all its dealings
with them. The Group aims to supply and procure goods
and services efficiently, in accordance with specifications
and compliance with applicable regulations, without
compromising quality and performance. To achieve such
aims, the Group welcomes transparent dialogue with
its customers and suppliers in respect of any quality or
performance issues.
The Group’s businesses are encouraged to gain and
maintain certification to specific standards required by the
markets they serve including quality, weather resistance,
security and fire protection. 41% of the Group’s revenues
are derived from facilities with ISO 9000 certification for
quality (2020: 94%). During 2021, the decision was taken
not to renew ISO 9000 certification at four major US plants
and reinvest internal resources for peer-to-peer reviews
between sites to share best practices and build our internal
audit capability. The Group believes this will drive cross
pollination of ideas and higher levels of quality, than with
external auditors, while still maintaining the structure of
disciplines of a quality management systems approach.
Extensive product safety testing is undertaken by the
Group’s in-house test facilities in the UK, US, Italy and
Australia, and externally through accredited partners.
Tyman UK and Ireland for example, has its own UKAS
accredited test facility in Wolverhampton to put its
products and complete window/door installations through
a variety of tests including product strength, weather
tightness and other performance characteristics for both
the Group’s products and those of its customers. Many of
the Group’s products have been tested to other relevant
BS/EN standards in fire protection and acoustics and also
meet UL fire standards in the relevant markets. Steel riser
doors manufactured under the Access 360 brand, are
independently CERTIFIRE rated, making it the only access
panel manufacturer in the UK to offer independent bi-
directional fire testing accreditation from Warrington Fire.
Case Study
Plastic clam shell boxes
Going into 2022, the Group will continue to work with
its customers to find more sustainable alternatives to
current packaging options. This will include eliminating
the use of plastic clam shell boxes from our UK retail
packaging, switching to cardboard cartons instead.
A prototype is shown below. Changes like this are part
of the Group’s strategy to transition to 100% sustainable
packaging by 2026.
Annual Report and Accounts 2021 Tyman plc 67
STRATEGIC REPORT
TCFD Statement of Compliance
In accordance with the FCA Policy Statement 20/17 and listing rule LR 9.8.6R(8), Tyman has made disclosures
consistent with the 11 TCFD recommendations on pages 69 to 77. The table below shows where core disclosures can be
found within the report for each recommendation, and where additional detail is reported. The core disclosure describes
activity to date and identifies where additional detail can be found. It also includes next steps for recommendations
where the Group partially complies, or where opportunities to strengthen its response have been identified. The areas
that are not disclosed in this report are detailed below, together with plans to improve reporting going forward.
Recommended
disclosure Status Reference
Governance
a) Board oversight Disclosed Core disclosure: Page 69
b) Management’s role Disclosed Core disclosure: Page 69
Strategy
a) Climate-related
risks and
opportunities
Disclosed
Core disclosure: Page 70
Additional information: Pages 71 to 74
b) The impact of
climate-related
risks
and opportunities
Partially
disclosed
Core disclosure: Page 70
Additional information: Page 74
Transition plan: The Group reports progress against targets in the sustainability
roadmap annually, alongside measures implemented to decarbonise its operations
and increase sustainable product innovation. Following the assessment of all Scope 3
categories, the Group will submit a science-based target in 2022 and work towards a
robust action plan to transition its operations.
c) The resilience of
the organisation’s
strategy
Partially
disclosed
Core disclosure: Page 70
Additional information: Page 74
Financial planning: The Group’s focus has been on identifying and assessing
climate-related risks and opportunities over geographies, scenarios and time
horizons. In 2022, the potential financial impact for the most material risks
and opportunities will be quantified. In 2023, climate financial modelling will be
integrated into Tyman’s existing systems and processes.
Strategy resilience: Climate Scenario Analysis is underway for different potential
futures including a below 2°C scenario. During the next stage of this analysis, the
Group will assess how its strategy is affected under these scenarios to determine
business resilience and develop appropriate response options.
Risk Management
a) Identifying and
assessing climate-
related risks
Disclosed
Core disclosure: Page 75
Additional information: Pages 72 to 74
b) Managing climate-
related risks
Disclosed
Core disclosure: Page 75
Additional information: Page 91
c) Integration
into overall risk
management
Disclosed
Core disclosure: Page 75
Additional information: Page 91
Metrics & Targets
a) Climate metrics
Partially
disclosed
Core disclosure: Page 76
Additional information: Pages 54 to 57, and 64 to 65
TCFD climate metrics & targets: The Group reports metrics and targets that align
with several of the newly launched TCFD ‘cross-industry, climate-related metric
categories’. As its knowledge of climate risks and opportunities improves in 2022, the
Group expects to be in a better position to consider additional metrics and targets
such as risk exposure and capital deployment.
b) GHG emissions Disclosed
Core disclosure: Page 76
Additional information: Pages 54 to 57
c) Climate targets Disclosed
Core disclosure: Page 76
Additional information: Pages 46, 55 to 56 and 65
Sustainability review continued
Tyman plc68 Annual Report and Accounts 2021
The Board is supported by the Audit and Risk Committee
for the assessment and management of emerging and
principal risks. This includes climate- related risks and
opportunities which are reviewed as part of the Group’s
overall risk management process as well as through
climate-specific risk assessments undertaken by the
TCFD Working Group.
The Remuneration Committee also assists the Board to
align the remuneration policy with the Group’s strategy.
Since 2021, the Tyman Long-Term Incentive Plan has
given a 15% weighting to four sustainability topics, one
of which relates to reducing Scope 1 and 2 emissions
(see pages 129 and 135).
Daily operational control of climate-related risk is
delegated to the Executive Committee with guidance
provided by the Group Health, Safety and Sustainability
Director, who reports to the Chief Executive Officer
directly.
The divisional presidents, supported by the divisional
sustainability leads, are responsible for developing,
monitoring and implementing action plans linked to the
roadmap. This year, the Tyman Sustainability Forum was
established to share knowledge and develop common
solutions for climate related mitigations and other
sustainability topics.
1. Governance
Summary of disclosure
a. Board oversight
• The Chief Executive Officer has overall
accountability for the management of climate-
related risks and opportunities.
• The Board is supported by the Audit and Risk
Committee for the oversight of climate change risk
management and implementation of climate-related
financial disclosures.
b. Management’s role
• The Executive Committee is accountable for the
daily management of climate change, guided by the
Group Health, Safety and Sustainability Director.
Next steps
• Introduce climate indicators into capital expenditure
and projects approval processes.
• Deepen the integration of climate change into
existing governance structures and committee terms
of reference to specifically include climate change
responsibility.
• Continue the engagement of the Board on a range of
sustainability topics in 2022 to further develop their
climate-related expertise.
For more information see Sustainability roadmap on
page 46.
Governance of climate change and sustainability topics
Board Oversight
• CEO accountable for sustainability
• Scrutiny and oversight of
sustainability ambitions, plans,
targets and disclosures
• Review and approve sustainability roadmap and plans
• Scrutinise response to climate risks and opportunities
• Meets monthly as a minimum
Tyman Sustainability Forum
• Chaired by Group HSS Director
• Divisional sustainability leads
meet monthly
• Roadmap implementation plans
• Development & sharing of best
practices across the divisions
Group Strategy Review
• Chaired by Group CEO, meets quarterly
• Sustainability integrated into Group
strategy
• X-functional review of Tyman Excellence
System (safety, sustainability, lean,
procurement, talent)
SBT & TCFD Working Groups
• X-functional representation facilitated by
external advisers, continual engagement
throughout the year
• Understand impacts, risks & opportunities
• Develop business response to
climate change
ExCo ownership
Audit & Risk Committee
Remuneration Committee
The Chief Executive Officer has ultimate accountability for climate change and sustainability topics, with oversight provided
by the
Board. The Executive Committee is responsible for the executing of the Group’s sustainability roadmap, including
tracking progress towards its climate-related targets. The Board and Executive Committee are briefed on climate-related
risks and opportunities through regular education sessions, SBT and TCFD project reviews and other updates on progress
against the Group’s sustainability roadmap.
Annual Report and Accounts 2021 Tyman plc 69
STRATEGIC REPORT
Climate scenarios
NGFS Category Orderly transition Disorderly transition Hot House World
Approximate temperature increase This includes a Net
Zero 2050 scenario
and a Below 2°C
scenario, reflecting a
policy ambition to limit
temperature increase
to between 1.5°C and
1.7°C respectively.
This includes a
Divergent Net Zero
2050 scenario and
a Delayed Transition
scenario, reflecting a
policy ambition to limit
temperature increase
to between 1.5°C and
1.8°C respectively.
This includes a
Nationally Determined
Contributions scenario
and Current Policies
scenario, reflecting a
policy ambition to limit
temperature increase
to between ~2.5°C and
3°C+ respectively.
Summary Decisive global policy
action is taken to limit
global warming from
early 2020s.
Policy measures are
delayed until late
2020s/early 2030s
meaning increased
costs, e.g. higher
carbon prices.
No new policies are
introduced leading to
increasing physical
impacts.
2. Strategy
Summary of disclosure
a. Risks and opportunities identified
• The Group assessed the materiality and prioritised
climate-related risks and opportunities in terms
of the potential level of financial impact. The
scoring framework used considered time horizons,
geography, and forward-looking climate scenarios.
b. Impact to business
• Climate scenarios developed by the Network for
Greening the Financial System (NGFS) have been
selected to assess the potential future impact of
transition for both climate risks and climate-related
opportunities.
c. Resilience
• To assess physical climate risks, the Group uses
climate projections from RCP8.5 (a high warming
scenario) from the Intergovernmental Panel on
Climate Change (IPCC). Moody’s 427 physical
climate risk assessment tool was used to screen
physical risks for critical parts of our value chain
including manufacturing operations and important
supply chain locations.
Next steps
• Quantify financial impact: for the most material climate
risks and opportunities, calculate the potential impact
to cashflow over different forward-looking scenarios
and integrate the results into Tyman’s financial
planning process.
• Transition plan: by quantifying the financial impact, the
Group will strengthen the business case for investment
in resilience measures.
• Build resilience: continue development of eco-design
tools to reduce the environmental impact of materials
used in the Group’s products (see page 65) and
continued alignment with the market transition to a net
zero economy.
For more information see Climate related risk and
opportunities
on page 72 and Sustainable solutions
on page 64.
Climate scenario analysis
Tyman first responded to the TCFD recommendations
in 2020 by undertaking a Group level assessment of
climate-related risks and opportunities. In 2021, the
Group built on this assessment by undertaking a climate
scenario analysis across its value chain, considering
different forward-looking climate scenarios, time horizons,
asset locations and supply chain characteristics. Tyman is
undertaking the climate scenario analysis in two phases:
1. A scoring of climate risks and opportunities to prioritise
those that represent the most material potential financial
impact. This qualitative assessment was completed
in 2021.
2. The quantification of financial impacts from a selection of
material risks and opportunities which will be undertaken
in 2022. The outputs will be incorporated into Tyman’s
financial planning to help inform business strategy.
The Group’s priority risks (both transition and physical) and
opportunities were identified over the short, medium and
long term, distilled from a long-list of over 100 topics and
assessed against a set of hypothetical scenarios developed
by the Network for Greening the Financial System (NGFS).
These include three categories within which there are six
possible temperature scenarios.
Tyman plc70 Annual Report and Accounts 2021
Sustainability review continued
Key
Manufacturing site
Manufacturing HQ
North America
UK and Ireland
These climate scenarios were incorporated into a ranking of
climate risks and opportunities, to help identify priorities.
Each risk and opportunity was assessed against criteria
including vulnerability, likelihood, and magnitude (see page
75 for methodology). The results reported on pages 72 to
74 include the priority risks/opportunities identified across
timeframes, as well as further detail on drivers and business
consequences. The Group defines short-term as 0-3 years
to align with financial planning cycles, medium-term as 4-9
years to align with its sustainability roadmap ambitions to
2030, and long-term as 10+ years out to 2050 to account
for the longer-term nature of climate risks.
CO
2
emission pathways for selected scenarios
Assessing our manufacturing plants for physical risk
Selected Tyman Assets Coverage
% total revenue 89%
% total employment 91%
Physical climate changes assessed at each site
Heat stress • Temperatures increase
• Periods of prolonged
extreme heat
• Climate control not
in place
Water stress • Water demand increases
whilst supply decreases
• Increase interannual
variability
Flood • Increased frequency of
intense rainfall events
• Infrastructure not in
place to manage
Wildfire • Higher temperatures
• Drier conditions
Hurricanes &
typhoons
• Increased frequency of
severe storm events
• Infrastructure not in
place to manage
Sea level rise • Increased frequency
of swells and
extreme waves
Hot House World
~3°C
Disorderly Transition
~1.5-2°C
CO2 emissions
*indicative, not to scale
Orderly Transition
~1.5-2°C
2020 2030 2040 2050
Physical risks have been assessed using climate projections from SSP5-8.5 developed by the IPCC. This is a high warming
scenario where weather changes are unpredictable, and the frequency and severity of extreme weather events increases.
Moody’s 427 physical climate risk assessment tool was used to assess future physical risk exposure for six different climate
hazards for locations across the global value chain, including all the Group’s manufacturing plants and over 70 supplier
locations worldwide. In 2022, the Group will review, and sense check the results, accounting for adaptation and mitigation
measures that have already been implemented. Priority risks will be assessed further to quantify the potential financial
impact.
Annual Report and Accounts 2021 Tyman plc 71
STRATEGIC REPORT
Climate-related risk
The priority risks and opportunities identified are summarised in the following tables.
Orderly Transition Disorderly Transition Hot House World
Market
0-3 yrs 4-9 yrs 10+ yrs 0-3 yrs 4-9 yrs 10+ yrs 0-3 yrs 4-9 yrs 10+ yrs
Risk
• Availability of feedstock
• Manufacturing costs
• Supply chain disruption
Risk Drivers
• Scarcity of by/co-products from
petrochemicals
• Increased cost of manufacturing
process
• Raw material price increases
• Energy regulation leading to
higher energy costs
Consequence
• Delayed production
• Reduced revenue as operating
costs increase that cannot be
passed on to customers
Technology
0-3 yrs 4-9 yrs 10+ yrs 0-3 yrs 4-9 yrs 10+ yrs 0-3 yrs 4-9 yrs 10+ yrs
Risk
• Technology and equipment
Risk Drivers
• Obsolescence or impairment
of equipment due to the
introduction of new climate
change orientated technologies
• High cost of transition to lower
emissions technology
Consequence
• Increased pressure to invest in
new technologies requires large
amount of capital
Policy & legal
0-3 yrs 4-9 yrs 10+ yrs 0-3 yrs 4-9 yrs 10+ yrs 0-3 yrs 4-9 yrs 10+ yrs
Risk
• Increasing regulation on
operations, suppliers and
products
Risk Drivers
• Carbon regulation (e.g. carbon
pricing mechanisms)
• Energy regulation leading to
higher costs and / or disruption
to energy availability
• Introduction of energy efficiency
standards and use of recycled
materials made mandatory
Consequence
• Higher operating costs associated
with the higher cost of carbon
through pour operations and
value chain
• Fines for not complying with
regulations
• Increased costs to monitor and
respond to regulations
Reputation
0-3 yrs 4-9 yrs 10+ yrs 0-3 yrs 4-9 yrs 10+ yrs 0-3 yrs 4-9 yrs 10+ yrs
Risk
• Investor expectations
• Changing customer behaviour
Risk Drivers
• Investor concern over climate
credentials
• Customers seeking lower carbon,
more sustainable products
Consequence
• Investors switch to better climate
performing stocks
• Customers opt for other suppliers
with greater climate ambition
Low risk
Low-Medium risk
Medium risk
Medium-High risk
Key
High risk
Tyman plc72 Annual Report and Accounts 2021
Sustainability review continued
Physical risk
Risk Risk drivers Consequence 10+ years
Heat stress • Temperatures increase
• Periods of prolonged
extreme heat
• Climate control not in place
• Temporary shutdowns
• Decreased productivity
• Employee health and safety concerns
• Power outages
• Increased costs for climate control
Water stress • Water demand increases
whilst supply decreases
• Increased interannual
variability
• Drought, limiting electricity due to hydro reliance
• Chronic water shortages
Flood • Increased frequency of
intense rainfall events
• Infrastructure not in place
to manage
• Damage to assets
• Damage to local infrastructure causing disruption
to transport network
• Insurance premiums increase
Wildfire • Higher temperatures
• Drier conditions
• Damage to assets
• Temporary shutdowns
• Employee safety concerns
Hurricanes
and
typhoons
• Increased frequency of
severe storm events
• Infrastructure not in place
to manage
• Shipping delays as containers diverted
• Damage to assets
• Insurance premiums increase
Sea level
rise
• Increased frequency of
swells and extreme waves
• Disruptions at ports
• Increased costs to manage supply
Annual Report and Accounts 2021 Tyman plc 73
STRATEGIC REPORT
Over the next year, the Group will quantify the potential
financial impact from key material risks and opportunities.
Climate scenarios will be used to describe ranges of
transition and physical-related impacts over time. The
financial impact assessment will produce climate-adjusted
cashflows that can be incorporated into Tyman’s financial
planning and business strategy.
In 2022, the Group will also explore market demand for
the growing range of climate resilient products across
different forward-looking climate scenarios and timeframes.
There is a clear role for Tyman to support its customers to
reduce their environmental impacts through energy saving
products, provide adaptation solutions to climate hazards,
and also to decarbonise the Group’s own Scope 3 product
impacts through design changes and material selection.
Tyman’s Sustainability Roadmap (page 46) is the basis of
our ambition to transition our operations and enhance our
climate resilience over the next decade.
Climate-related opportunities
Opportunity drivers Consequence
Opportunity
rating
Resource
efficiency
• Use of recycling
• Use of more efficient production and
distribution processes
• Increased water efficiency
• Participation in renewable energy
programmes and adoption of energy-
efficiency measures
• Use of new lower carbon technologies, switch
from natural gas to electric process heating
• Shift towards low emissions sources and/or
decentralised on-site energy generation
• Increased sales as
customers value
environmentally friendly
process
• Reduced costs from
resource saving projects
Products and
market
• Develop smart windows for indoor
climate control, ventilation, security and
energy saving
• Develop products to meet higher pressure
ratings requirements on windows and doors
to account for hurricanes
• Developments in global markets promoting
energy efficiency (e.g. UK Government’s
Future Homes Standard)
• Regulation on energy performance and
thermal efficiency
• Develop flood defence products for windows
and doors
• Increased sales as
customers opt for
lower carbon and more
sustainable products
• Increased sales in
expanding customers
as the need for climate
defence infrastructure
increases
Resilience • Account for value, emissions and spec trade-
offs to deliver sustainable operations and
solutions
• Assessing product lifecycle to reuse waste
• Better management of
climate-related risks,
leads to increase in capital
available to invest in
climate and sustainability
ambitions and implement
robust adaption and
mitigation plans
Low Opportunity
Low-Medium Opportunity
Medium Opportunity
Medium-High Opportunity
Key
High Opportunity
Tyman plc74 Annual Report and Accounts 2021
Sustainability review continued
Climate Scenario: Orderly Transition, Disorderly Transition, Hot House World
Short-term
0-3 years
Long-term
10+ years
Medium-term
4-9 years
RISK & OPPORTUNITY SCORE
VULNERABILITY
MAGNITUDE
Size of impact
LIKELIHOOD
Chance of outcome occurring
EXPOSURE
Presence of systems that
could be affected
ADAPTIVE CAPACITY
Ability to adjust or respond
SENSITIVITY
Degree to which systems
could be affected
3. Risk management
Summary of disclosure
a. Identifying and assessing risks and opportunities
• Climate change risk is assessed as part of the
Group’s risk management process and this year,
climate change along with the broader sustainability
agenda, was raised as a Principal Risk.
• Risks and opportunities are identified through
internal engagement, thorough research and
analysis of transition and physical changes in
various forward-looking climate scenarios. Each
division maintains risk registers which include
climate change issues such as mitigation around
business and supply chain disruption.
b. Managing risks and opportunities
• Appropriate control measures are identified and
selected based on the perceived materiality of
climate risk and the Group’s ability to influence.
Some of these measures are outlined in Tyman’s
sustainability roadmap, including to decarbonise
operations and grow sustainable solutions. As
we continue to understand the potential impacts
of climate issues, we will seek to implement
appropriate control measures.
Next steps
• Risk process: further develop the Group’s approach
to climate change risk management building on the
Group’s growing understanding of materiality, time
horizons, and Tyman’s risk appetite.
• Risk controls: mitigation plans to be developed in
late 2022 for the most material risks, including those
related to physical risks impacting the Group’s own
operations and in its supply chains.
For more information see Managing risk on pages
84 to 91.
During 2021, the potential impact of climate change and
the growing importance of the broader sustainability
agenda was raised to a Principal Risk (page 91). As such,
climate-related issues are assessed alongside Tyman’s 10
other Principal Risks, including business interruption and
market conditions. This ensures appropriate management
controls are in place and allows the Group to consider
the significance of climate change and sustainability
against other business risks. An in-depth climate risk and
opportunity assessment was undertaken to account for
the unique characteristics of climate-related risks and
opportunities such as the uncertainty and unpredictability
of climate changes and global responses. The risks and
opportunities identified built on last year’s assessment and
leveraged insights from internal engagement as well as
findings from desk-based research on climate projections,
emerging and existing climate policy, sectoral developments
and a peer review. A cross-functional workshop was held
with participants from each division and group, covering
finance, sustainability, risk, legal, procurement and product
development to validate the analysis to date including risk
and opportunity identification and the scoring assessment.
To assess the potential impact to its business and cashflows,
the Group ranked identified climate-related risks and
opportunities against likelihood, magnitude, exposure,
sensitivity, and adaptive capacity using a 1-5 scale (see
below). Scoring thresholds were defined for each indicator
to ensure a consistent and comparable approach was
applied across all risks, climate scenarios and time horizons.
Annual Report and Accounts 2021 Tyman plc 75
STRATEGIC REPORT
4. Metrics and targets
Summary of disclosure
a. Climate metrics
• The Group reports its progress against targets for
carbon emissions, water and waste.
b. GHG emissions
• Scope 1 and 2 emissions have been reported for a
number of years and have been extended to cover
Scope 3 emissions in this year’s reporting.
c. Targets
• In place to reduce Scope 1 and 2 emissions intensity
per £ revenue by 50% by 2026 and achieve carbon
neutrality by 2030.
• The Group seeks to grow its revenues from climate-
related product solutions through energy efficiency,
hazard protection and product decarbonisation.
Next steps
• SBT: develop reduction targets in line with the SBTi to
include Scope 3 emissions
• Climate-related metrics: review and develop new
measures and goals aligned to the TCFD’s guidance on
categories for cross-industry climate-related metrics
and targets.
For more information: Energy and GHG emissions page 54,
SBT and value chain emissions pages 56 to 57,
sustainable solutions page 64 and revenues impacting the
UN SDGs page 65.
Absolute and intensity metrics and targets across a range
of environmental performance indicators keeps the Group
accountable to the ambitions and plans laid out in Tyman’s
sustainability roadmap (page 46). This year, for the first
time, the Group has reported its full Scope 3 emissions
inventory, which highlighted the significance of raw
materials purchases in its value chain footprint (see table
below for risks associated to our emissions profile). This
insight has supported the business case to invest further
effort in research and development to reduce material-
related emissions as well as applying sustainability thinking
to day-to-day design processes.
Emissions Associated Risks
Scope 1
emissions
• Increase costs related to fossil fuel
Scope 2
emissions
• Fluctuation in electricity price due to
the energy mix transition to net zero
Scope 3
emissions
• Difficulty to reduce emissions intensity
of our products
• Insufficient action from suppliers to
decarbonise
• Complexity in collecting primary data
to evidence emissions reductions from
initiatives that are implemented
Total
emissions
• Increase in cost of carbon, due to
future potential taxes on our own
emissions and pass-through from
suppliers
• Customers opt for competitors with
lower emissions intensity
New guidance from TCFD encourages organisations to
report against the six ‘cross-industry, climate-related
metric’ categories. We are already reporting against
several categories and plan to develop new measures with
associated targets as our understanding of climate-related
matters evolves.
Category Alignment
GHG
emissions
Reported: The Group reports Scope 1,2
and 3 emissions as well as its emissions
intensity per £m revenue (page 55).
Transition
risks
In development: The Group is
undertaking a comprehensive Climate
Scenario Analysis to quantify the potential
financial impact from transition and
physical risks.
Physical risks
Climate-
related
opportunities
Reported: The Group reports the revenue
of climate resilient products (see page
77). Tyman intends to explore additional
measures to ensure we are best placed to
seize opportunities.
Capital
deployment
Under consideration: In 2022 the Group
will explore investment in mitigation
measures to reduce its climate impact
and to transition its operations, including
investments in adaptation responses as
appropriate for physical risks.
Internal
carbon prices
Under consideration: The Group is
building its understanding of climate-
related risks and opportunities and will
explore the opportunity to develop an
internal carbon price.
Remuneration Reported: The Tyman Long-Term
Incentive Plan gives 15% weighting
for four sustainability topics including
growing sustainable product revenues,
and reducing Scope 1 and 2 emissions
(page 129 and 135).
Tyman plc76 Annual Report and Accounts 2021
Sustainability review continued
Growing the Group’s range of climate resilient
products
The Group aims to grow its range of climate resilient
products directly in the way they are used and also in how
they are formulated through more sustainable content.
In 2021, 15% of the Group’s total revenues help promote
climate resilience through improved energy efficiency,
reduced materials impacts and protection against physical
climate hazards such as hurricane and fire.
2021 Climate Resilient Product Revenues
£93 million
Energy saving £74.1m
Hurricane
protection £2.4m
Fire protection £12.9m
Circular
economy £3.9m
Solar panel installation underway at the i54
facility in Wolverhampton UK, see page 54
Annual Report and Accounts 2021 Tyman plc 77
STRATEGIC REPORT
Viability Statement
Assessment of prospects
In assessing the long-term prospects of the Group, the
Board considers the Group’s current position, including the
following factors:
• The Group’s performance in 2021 was strong, supported
by favourable market trends and market share gains,
despite being constrained by supply chain challenges.
• The strength of recovery through the second half of
2020 following COVID-19 demonstrates the resilience of
the Group’s core markets.
• The Group has significant headroom in borrowing
facilities and debt covenants at 31 December 2021, with
liquidity headroom of £180.8 million and leverage of
0.9x compared to a covenant of 3.0x adjusted EBITDA.
A significant deleveraging has been achieved over the
last three years.
• The Revolving Credit Facility of £240 million expires in
February 2024 and the US Private Placement debt of $45
million is due for repayment in November 2024, which
falls within the final year of the viability assessment
period.
• The temporary relaxation of covenants granted during
2020 indicates the support of the Group’s lenders.
In addition, the Group has an investment grade
rating through DBRS Morningstar, indicating strong
creditworthiness. The Board therefore has a strong
expectation that debt facilities will be successfully
refinanced.
• Operations are highly cash generative and drive a high
operating cash conversion ratio. Cash conversion over
the longer term is c.90%, although in 2021 it is lower
at 64% due to the need to build working capital in the
current trading environment and to reinstate capital
expenditure which had been deferred in 2020.
• The performance through the COVID-19 pandemic
demonstrated the ability of the Group to reduce costs
and preserve cash when necessary.
In addition, the Board considers the Group’s strategy and
business model, including the following factors:
• Favourable long-term macroeconomics and megatrends
are expected to drive further growth (see our markets
section on pages 16 to 19 for further details).
• Diversification across geographies and markets provides
resilience.
• Innovation capabilities quickly allow the Group to adapt
to changing trends, such as smartware and automation,
sustainability, fire integrity, and anti-germ.
• Our sustainability roadmap positions the Group well
to derive benefits from the transition to a low carbon
economy.
• There are high barriers to entry through our deep
customer relationships, market-leading brands, and
domain expertise.
• The extensive portfolio of highly-engineered,
differentiated products across hardware, smartware
and seals and extrusions, combined with value-added
support services.
• Co-development and customisation services create long-
term partnerships.
• Rationalisation of footprint and other self-help activities
are driving margin expansion.
• The growth strategy is focused on gaining market
share through new product introductions and channel
expansion initiatives.
• Maintaining focus on pricing discipline to protect margins
from the effects of adverse exchange rate movements,
increasing tariffs and material input price inflation.
The Group’s strategy and business model are central to
understanding the future prospects and viability of Tyman.
Both are well established and subject to regular monitoring
and development by the Board. See further details of the
Group’s strategy on pages 20 to 25 and of the Group’s
business model on pages 14 and 15.
The principal risks related to the business are also taken
into account by the Board when assessing the long-term
prospects of the Group, particularly business interruption,
market conditions, loss of competitive advantage, and raw
material costs and supply chain disruption. See further
details of the Group’s principal risks on pages 84 to 91.
Structured budgeting and strategic planning
process
Tyman’s longer-term prospects are assessed primarily
through the Group’s budgeting and strategic planning
process. The annual Group budget is compiled in the
autumn of each year and generates a detailed forecast
for the year ahead. This is reviewed and approved by the
Board. A strategic planning process is also conducted,
covering the next three years on a rolling basis. This
process includes a review of divisional strategic plans by
the Tyman Executive Committee as well as cross-divisional
initiatives. The Board participates in the process through
attendance at a strategy day, at which Group and divisional
management present strategic plans. The Board also
receives monthly strategy updates from the Chief Executive
Officer.
Tyman plc78 Annual Report and Accounts 2021
Going concern and viability
The output of the strategic plan includes a consolidated set
of financial projections for the Group covering a period of
the next three years, including a review of forecast debt
covenant compliance and debt headroom. The strategic
plan reviewed as part of the assessment of prospects in
this report therefore covers the three-year period ending 31
December 2024.
Key assumptions
The key assumptions underpinning the 2022 to 2024
strategic plan include:
• average market growth forecasts in line with local
consensus;
• no future loss of significant customers;
• conservative forecasts of market share growth,
selling price increases and the impact of new product
development;
• conservative forecasts of the benefits from self-help and
continuous improvement activities;
• the RCF which is due for repayment in 2024 is
successfully refinanced at the existing facility limit of
£240 million; and
• no future acquisitions or disposals.
Assessment of viability
In accordance with provision 31 of the Code, the Directors
have assessed the future viability of the Group. This
assessment takes account of the Group’s current trading
position and the potential impact of the principal risks and
the mitigating actions documented on pages 84 to 91 of the
Annual Report. Consistent with previous years, the Directors
have determined that three years is an appropriate
timeframe over which to provide a viability statement, as
this is the timeframe currently adopted by the Board as its
strategic planning period.
A three-year period aligns with the Group’s typical
investment time horizon. In addition, the Directors consider
that demand in the Group’s business is ultimately driven by
consumer confidence and discretionary spending patterns
which are difficult to project accurately beyond a three-year
time horizon.
The strategic plan therefore reflects the Directors’ best
estimate of the future prospects of the business over the
three-year period.
Annual Report and Accounts 2021 Tyman plc 79
STRATEGIC REPORT
In order to assess the Group’s viability over this period, the strategic plan has been flexed by overlaying the cumulative
financial impact of a number of downside scenarios to represent ‘severe but plausible’ circumstances that the Group
might experience. These scenarios are based on the potential financial outcomes of certain of the Group’s principal risks
crystallising such as business interruption through supply chain disruption and loss of productivity due to significant
absenteeism due to COVID-19, a deterioration in market conditions and loss of business to competitors.
The downside scenarios applied to the strategic plan are summarised below.
Severe but plausible downside scenario
The ‘severe but plausible’ scenario models the impact of a significant short-term contraction in revenue on the Group. The
severe but plausible scenario modelled in the current year is less severe than what was modelled in 2020, as the impact of
COVID-19 is more certain, and the Group’s performance and trading environment are much more robust than at the end of
2020. The scenario modelled in 2020 is therefore no longer considered plausible.
Strategic plan flexed
for combinations of the
following scenarios
Link to principal risks
and uncertainties
Level of
severity tested Conclusion
Supply chain disruption and
loss of productivity due to
absenteeism as a result of
ongoing effect of COVID-19
Severe downturn in market
conditions
Aggressive competitor
actions resulting in a loss of
market share
Business interruption
Market conditions
Loss of competitive
advantage
Raw material costs and
supply chain failures
10% fall in revenue in year
one against the base case,
followed by only inflationary
growth in the following
two years.
Tyman, after undertaking
reasonable mitigating
actions, should be able
comfortably to withstand
the impact of this severe
but plausible scenario.
Reverse stress test scenario
The ‘reverse stress test’ scenario models the impact of a larger short-term contraction in revenue which is sustained for a
period of time.
Strategic plan flexed
for combinations of the
following scenarios
Link to principal risks
and uncertainties
Level of
severity tested Conclusion
Significant supply chain
disruption and loss of
productivity due to
absenteeism as a result of
ongoing effect of COVID-19
Extreme downturn in
market conditions
Aggressive competitor
actions resulting in
a significant loss of
market share
Business interruption
Market conditions
Loss of competitive
advantage
Raw material costs and
supply chain failures
42% fall in revenue in year
one against the base case,
followed by no year on year
growth in the following
two years.
This sustained level of
performance deterioration
is considered highly
implausible and would
make the future viability of
the Group less certain.
The flexed models take account of the natural reduction in variable costs and availability and likely effectiveness of
mitigating actions available to the Group, including the flexing of working capital, capital expenditure and discretionary
spend. The models do not include significant structural actions, such as closing or mothballing facilities or divesting assets.
The models also do not consider changes to the Group’s capital structure that it may be able to make through refinancing
existing debt facilities and/or raising equity finance.
Viability statement
Based on their assessment of the prospects for the Group and principal risks and the viability assessment above, 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 period to 31 December 2024.
Going concern
As a consequence of the work undertaken to support the viability statement above, the Directors have continued to adopt
the going concern basis in preparing the financial statements (see note 2.2 Going concern in the notes to the financial
statements).
Tyman plc80 Annual Report and Accounts 2021
Going concern and viability continued
In accordance with the duties of Directors
under section 172 of the Companies Act 2006,
the Board considers a number of factors in its
decision-making, including:
• the likely consequences of any decision in the
long-term;
• the risks to the Group and its stakeholders;
• the interests and wellbeing of our people;
• the Group’s relationships with its customers and
suppliers;
• the importance of our reputation for high standards
of business conduct; and
• the impact of our businesses on the environment
and the communities where we are present.
Tyman engages extensively with its stakeholders at
all levels of our business because we believe that the
understanding of such stakeholders through engagement is
vital to building a sustainable and successful business.
Some examples of direct engagement by the Board include
the Workforce Engagement NED’s skip-level meetings with
employees and their representatives; and meetings or calls
with customers, suppliers or shareholders.
Engagement may also be indirect, such as through Board
reports, employee surveys and feedback from investors
through analysts.
All such engagement has provided invaluable input to the
Board’s discussions leading to decision making.
In 2021, the Board carefully considered the continuing
impact of the COVID-19 pandemic on the health and safety
of our employees, their families and our communities. It
also considered the impact of disruptions in our supply
chain on our customers.
This statement should be read in conjunction with: the
Chair’s statement on pages 30 and 31; the CEO review on
pages 32 and 33; the Financial review on pages 40 to 45;
the sustainability section on pages 46 to 77; the risk section
on pages 84 to 91; and the Governance and Directors’
reports on pages 94 to 101.
Employees
Why it is important to engage with this
stakeholder group
We recognise that an engaged workforce is also a
productive one and better able to attract and retain the
best talent. We are proud of our workforce and aim to
give them reasons to be proud of their employer. For
these reasons, the Board is committed to understanding
the various culture, issues and challenges facing the
Group’s workforce across its global network.
By fully appreciating the broad spectrum of the talents,
ambitions, needs and concerns of our workforce, we aim
to foster diverse and inclusive workplaces in which every
employee can bring their genuine selves to work, attain
their full potential and achieve job satisfaction.
How did Tyman engage in 2021?
• Training and development (e.g. Safety Leadership
Programme, One Tyman Deployment, including Code
of Business Ethics, see pages 59 to 61)
• Virtual conferences with the Group’s leaders (see
page 62)
• Skip-level meetings with the designated Workforce
Engagement Non-executive Director, Pamela Bingham
(see page 62)
• Skip-level meetings with the Group Chief Executive
and divisional senior management
• Site visits by members of the Board (conducted
physically and online)
• Communications to encourage all employees to get
vaccinated and to continue precautions at work and
outside of work (see page 51)
• All-employee communications from the Group Chief
Executive
• SpeakUp hotlines (see pages 60 and 61)
• Webinars with HR leadership and participants of the
LTIP and STIP schemes to discuss their operation,
including the behaviours that they aim to encourage
(see page 126)
Our Stakeholders
Annual Report and Accounts 2021 Tyman plc 81
STRATEGIC REPORT
Customers and End-users
Why it is important to engage with this
stakeholder group
We want to continually deliver the best relevant products
to our customers on time every time. Engaging with
our customers enables us to better evaluate our past
performances and to understand their current and
future needs. Engagement also highlights opportunities
for innovation and improvement to our products and
processes.
By doing so, we aim to build enduring relationships with
our customers and continually attract new ones.
How did Tyman engage in 2021?
• Ongoing management of customer relationships (see
our business model on pages 14 and 15)
• Participation in industry forums and events
• Meetings to discuss sustainability objectives (see
pages 66 and 67, and case study on page 35)
• Insight into the Group’s customer and end-user base
through regular Board updates, including the Group
Strategy Day
Partners
Why it is important to engage with this
stakeholder group
We engage with our suppliers to ensure that we
continually exercise our values and also to safeguard the
security of supply, value for money and speed to market
that are important to many of our other stakeholders.
For these reasons, we seek to establish long-term
relationships with carefully selected high-quality
suppliers who can ensure that our businesses continue
to deliver sustainable market-leading products that meet
or exceed our customers’ expectations and requirements
and are delivered on time in full every time.
How did Tyman engage in 2021?
• Code of Business Ethics (see page 59)
• Ongoing management of supplier relationships (see
our business model on pages 14 and 15)
• Insight into the Group’s supplier base through regular
Board updates, including the Group Strategy Day
Tyman plc82 Annual Report and Accounts 2021
Our Stakeholders continued
Investors
Why it is important to engage with this
stakeholder group
As a constituent of the FTSE 250, an issuer of private
debt placement notes in the USA and a borrower of
bank debt, we aim to help our shareholders and lenders
develop a strong understanding of how the Group’s
businesses generate sustainable returns and long-term
success.
The support of our investors, and our ability to attract
new ones, enables us to finance our growth activities and
build a stronger Group.
How did Tyman engage in 2021?
• Meetings and other communications with current and
potential shareholders (see page 99)
• Meetings and other communications with current and
potential lenders (see page 99)
• Meetings with analysts and brokers’ sales teams (see
page 99)
• Addressing enquiries from institutional and retail
investors
• The 2021 AGM and 2020 Annual report and Accounts
• Regulatory announcements (see page 99)
• Corporate website
Society
Why it is important to engage with this
stakeholder group
We want to be a good employer and responsible
neighbour in the communities in which we operate.
We aim to continually create positive outcomes in the
societies that we touch and to position our businesses to
deliver long-term success.
Moreover, we aim to be a responsible corporate citizen in
each country that we operate by seeking its success.
We constructively engage with industry bodies to share
our expertise and help shape new regulations and
standards in security and insulation.
How did Tyman engage in 2021?
• Membership of trade associations and industry bodies
Annual Report and Accounts 2021 Tyman plc 83
STRATEGIC REPORT
Managing Risk
Effective risk management is
integral to how we manage
the Group.
Risk management process
The Board is committed to protecting and enhancing the
Group’s reputation and the interests of shareholders and
our wider group of stakeholders. In doing so, the Board
promotes a strong ethical, risk aware culture within the
business which emphasises the importance of effective
risk management and risk reporting throughout the year
and forms a key element of our internal governance and
performance review processes.
Our risk management process, based on the Four Lines of
Defence model, provides clarity on roles and responsibilities
for managing risk.
The Board has ultimate responsibility for the Group’s
system of risk management and internal control with
responsibility for oversight delegated to the Audit and
Risk Committee which is responsible for maintaining and
reviewing the effectiveness of our risk management and
internal controls processes including strategic, financial,
operational and regulatory/compliance matters. The Board
has reviewed the systems of Internal and Risk Management
within the year up to the date of approval of the Annual
report and Accounts.
Group risk appetite
The Board also ensures that the Group’s risk exposure
remains appropriate and links directly to the effective
delivery of our strategic objectives. During the year we
have reviewed and updated a number of key aspects of our
risk management framework including enhancing our Group
risk appetite and our risk management processes with
further developments planned in 2022 both at divisional
and Group levels to enhance skills and capabilities on risk
management.
As an international Group, the business faces a range of
risks and uncertainties where internal and external factors
influence the Group’s risk response to managing these risks.
The Group’s key principal risks are those risks that are
considered material and could have a significant impact on
the Group’s business activities and operations. The Group
considers emerging risks regularly throughout the year,
both through the risk management process and in ongoing
and established meetings embedded in our performance
management system. We consider emerging risks as
those that may materialise or have an impact on a longer
timeframe of three years or more. Areas of emerging risk
where the value of or nature of these risks are not fully
known are considered as a part of the risk management
process and other existing management processes in place.
As we evolve our risk management process in 2022, we will
continue to enhance our approach to emerging risks.
The Group’s risks and uncertainties have been considered
in the context of the broader geo-political and economic
environment, including the impact of the ongoing COVID-19
pandemic, the dynamic nature of the changing trading
relationships between the US and China and the impact of
Brexit that took effect from 1st January 2021. In addition,
we have closely monitored and responded to industry-wide
inflationary pressures and supply chain challenges including
the availability of raw materials and labour.
These have all remained prominent themes of risk
throughout the year and we have focused on ensuring the
Group is mitigating these risks to the extent possible.
The Directors confirm they have carried out a robust
assessment of the principal and emerging risks facing the
Company, including those that would threaten its business
model, future performance, solvency or liquidity. The
table on pages 87 to 91 sets out the principal risks and
uncertainties facing the Group at the date of this report and
how they are being managed or mitigated.
In accordance with the provisions of the Code, the Board
has taken into consideration the principal risks in the
context of determining whether to adopt the going concern
basis of accounting and when assessing the prospects of
the Company for the purpose of preparing the viability
statement. The going concern and viability statement can
be found on pages 78 to 80.
Responsibilities for and structure
of risk management
The Group’s risk framework defines clear roles,
responsibilities and accountabilities for risk management
across the Group and continues to develop in line with our
strategy. Building on the progress since 2019 in safety
excellence with the appointment of the Director of Health,
Safety and Sustainability, and in 2020 the Group added
specialist resources into the Group that strengthen our risk
and assurance capabilities. These included a Group Head
of IT, a Group Head of Internal Audit and Risk Management
and a General Counsel. Good progress continues to be
made in these areas and allows the Group to continue
the evolution of our approach to managing cyber and
information security risks, evolving our risk management
and assurance processes, and strengthening our business
ethics and compliance culture. In 2021, the Group has also
appointed a Group Head of Tax and Treasury and Group
Head of Corporate Development to further strengthen
our Group level capabilities and specialisms in these two
important areas.
The Group manages risk by operating the Four Lines of
Defence model.
The first line of defence consists of operational
management implementing and maintaining effective risk
identification, risk mitigation, reporting and the development
and maintenance of internal control systems. This ensures
that risk management and internal control remain an
integral part of day-to-day operations yet facilitates the
escalation of significant risks as and when they should arise.
Each division has an established organisational structure,
senior management team and policies and procedures at a
divisional and location level, including those risks relating to
compliance with laws and regulations in the geographies in
which they operate.
The second line of defence consists of the corporate
functions who support operational management and who
are responsible for establishing Group level policies and
procedures including the Delegation of Authority, Code
of Business Ethics and Accounting Policies. Corporate
functions include Group Finance, Tax and Treasury, IT, Legal
and Secretariat, Health, Safety and Sustainability, Risk
Management and Corporate Development.
Tyman plc84 Annual Report and Accounts 2021
Principal risks and uncertainties
Risk reporting
The Board
Formulates the Group’s strategy and has overall responsibility for risk management including definition of the Group’s
risk appetite and culture. The Board delegates oversight of risk management to the Audit and Risk Committee.
Audit and Risk Committee
Regularly monitors the nature, extent and management of the Group’s
principal and emerging risks.
Monitors and reviews the effectiveness of the Group’s systems of
risk management and internal control.
Group
Internal Audit
(3rd Line of
Defence)
External
Audit
(4th Line of
Defence)
Executive Committee (2nd Line of Defence)
Comprises Executive Directors and Divisional Presidents
overseeing management of group-wide risks
Divisional Management
(1st Line of Defence)
Implementation of the
necessary systems of
risk assessment and
internal control.
Regular review of
risk registers and
implementation of
mitigation plans. Day-
to-day operational
management of risk.
Corporate Functions
(2nd Line of Defence)
Corporate functions include:
Group Finance, Tax and Treasury,
Legal and Secretariat, IT and Health,
Safety and Sustainability and
Corporate Development.
Responsible for Group-level design
and maintenance of the risk
framework and internal controls
and providing specialist support
across the Group.
Lines of Defence
Risk management is embedded in many aspects of the
Group’s leadership and performance model where key
areas of risk are inherently considered. Key governance
mechanisms for the management of risk include the
Executive Committee, the Finance Leadership Team, the
strategic planning process, budgeting and forecasting and
the Business Performance Review (BPR) process undertaken
every month for each division.
The BPR process covers key aspects of our strategic,
financial, operational and compliance risks including
proactive monitoring of key actions from month to month,
safety performance, business ethics, legal matters, financial
performance (including budget and forecasts), progress
on strategic priorities, organisational developments and
risk watchlist items. In addition, the BPR meeting process
is supplemented by deep dive reviews from time to time
throughout the year including divisional risk management
reviews.
In addition, this line of assurance also covers the operation
of the Group’s ethics ‘SpeakUp’ reporting system which
enables employees to raise concerns confidentially over
ethics and compliance matters. All ‘SpeakUp’ reports are
investigated by the General Counsel & Company Secretary,
or his nominated investigator, who tracks the actions and
reports their outcome to the Board at every Board meeting.
The Group’s ‘SpeakUp’ process has been reviewed by the
Board this year.
The third line of defence is Group Internal Audit
providing independent and objective assurance.
In 2020, the Board made the decision to appoint a Group
Head of Internal Audit and Risk Management to further
evolve the Internal Audit function bringing leadership of
this important function ‘in-house’ whilst utilising resources
from a professional services firm to support the Internal
Audit process. This continues to allow the Group to facilitate
the ongoing development of the Group’s risk management
processes. The Group Head of Internal Audit reports
directly to the Chair of the Audit and Risk Committee,
reinforcing the importance of this function maintaining its
independence and objectivity.
The fourth line of defence is the Group’s external
auditor, PwC.
Through the work of the Group Internal Audit function and
external auditors, the Audit and Risk Committee is satisfied
that any audit issues raised by either of the auditors are
managed and resolved effectively by management.
We will continue to evolve and develop our Risk Framework
as appropriate throughout 2022 recognising the dynamic
nature of risk management.
Annual Report and Accounts 2021 Tyman plc 85
STRATEGIC REPORT
Our risk management process
The Group has policies and procedures in place to ensure that risks are properly identified, evaluated and managed at
the appropriate level within the business. The identification of risks and opportunities, the development of action plans
to manage the risks and maximise the opportunities, and the continual monitoring of progress against agreed plans are
integral parts of the core activities and performance review processes throughout the Group.
The Tyman Risk Management Process
1.
Risk
identification
2.
Evaluate
inherent risks
3.
Review
existing
controls
4.
Risk
response
5.
Monitor
and review
actions
6.
Risk
reporting and
oversight
Top down and
bottom up
identification
of the Group’s
risks ensuring
emerging and
arising risks
are assessed
Considers the
gross level
of risk to
the Group in
impact and
likelihood terms
Identification
and
assessment
of existing
controls to
manage
the risk
Further
mitigation is
considered in
line with the
Group’s risk
appetite
Regular review
and monitoring
of risks at a
Group and
divisional level
Regular
reporting of
risk-related
matters in core
governance and
performance
processes and
reporting to the
Audit and Risk
Committee
Each division maintains a comprehensive risk register
which assesses all pertinent risks relevant to that division,
including strategic, financial, operational, and compliance
risks. The risk assessment process is dynamic and includes
emerging and retiring risks as each division’s risk landscape
shifts.
These risk registers are reviewed on a regular basis by
the senior leadership team of each division. Each risk is
monitored in line with the process above to assess the
likelihood and impact of the relevant risks crystallising.
Against this an assessment is made of existing controls that
are in place to mitigate the relevant risk and identify further
actions to further manage each risk to an acceptable level.
Each division’s risk register is formally reviewed four times
a year within the division, the conclusions of which are
discussed at the Executive Committee and submitted to the
Audit and Risk Committee at least twice per year.
A shorter register of Group principal risks is specifically
reserved for review by the Audit and Risk Committee. This
is mainly, but not exclusively, comprised of risks above a
certain threshold after mitigation. These principal risks and
uncertainties are reported in the Annual Report.
Main developments in risk
As a result of this process, several changes have been made
to the Group’s principal risks during the year including:
• Climate change and sustainability – Whilst previously
considered an area of emerging risk and opportunity,
given the importance of climate change and
transitioning to a net-zero economy, the Group has
enhanced its understanding of its impacts, risks and
opportunities in this area and now considers this to be
a principal risk. (Please see our Sustainability review on
pages 46 to 77.)
• We will continue to proactively monitor and respond to
industry-wide inflationary pressures and supply chain
challenges including the availability of raw materials and
labour through our existing performance / management
processes.
Risk priorities in 2022
The risk priorities for the year ahead are as follows:
• Continued focus on proactively managing the ongoing
impacts of the COVID-19 pandemic to ensure the safety
and wellbeing of our employees, continuity of our
operations and operational resilience to enable us to
meet our customer needs.
• Continued assessment and intensification of mitigation
plans relating to IT cyber security risks.
• Continued strengthening of business continuity plans
and other key areas of operational resilience given
the need for adaptability of the Group’s supply chains,
particularly in the context of COVID-19, climate change
and changing geopolitical circumstances.
• Maintaining pricing discipline to mitigate the risk of raw
material and other cost inflation.
• Project management rigour as integration,
rationalisation and new product launch activities support
the Group’s organic growth strategy.
• Continued review and response to developments in
corporate governance including climate change (SBT
and TCFD), broader ESG risks and proposed BEIS
corporate reforms.
Tyman plc86 Annual Report and Accounts 2021
Principal risks and uncertainties continued
Risk Risk description Mitigation
Changes since
last Annual Report
1
Business
interruption
(including
pandemic)
Trend after
mitigation
Link to strategy
The occurrence of an
event that may lead to
a significant business,
supply chain or market
interruption. This includes
events such as natural
disasters, pandemics
(including COVID-19),
significant IT interruption,
the loss of an operating
location or geo-political
events including
significant changes in
trading relationships
such as US/China trade
developments. This results
in an inability to operate or
meet customer demand,
a reduction in market
demand or poses a health
risk to employees.
The Group has proactively managed its
response to the COVID-19 pandemic
throughout the year including extensive
health measures at operations;
temporary cost control measures;
ongoing review of demand and
production levels, regular review of
supply chain ability to supply; reviewing
stock levels and responding; increased
contact with remote working team
members and weekly COVID-19 case
reviews. More broadly the Group reviews
business continuity management,
IT disaster recovery and IT security
as appropriate throughout the year.
The Group also ensures appropriate
insurance cover is maintained.
The global impact of the
COVID-19 pandemic has
continued. Given the
duration, uncertainty and
widespread impact of
COVID-19, this risk has
been updated to a broader
business interruption risk.
Risk assessment
High
2
Market
conditions
Trend after
mitigation
Link to strategy
Demand in the building
products sector is
dependent on levels of
activity in new construction
and RMI markets. This
demand is cyclical and can
be unpredictable and the
Group has low visibility
of future orders from its
customers.
Whilst there is a high degree of
economic uncertainty, in previous cyclical
downturns Tyman has proved effective in
responding to events through:
• monitoring of market conditions
and macroeconomic trends through
both annual strategic planning
processes and regular performance /
forecasting reviews;
• maintaining appropriate headroom
and tenor in the Group’s available
borrowing facilities;
• its geographic spread providing a
degree of market diversification;
• the ability to flex the Group’s cost
base in line with demand.
As part of its process for assessing the
ongoing viability of the Group, the Board
regularly stress tests Tyman’s financial
and cash flow forecasts over both a
short- and medium-term horizon.
Markets have continued to
be disrupted throughout
the year, predominantly
due to COVID-19. The
majority of the Group’s
core markets have
rebounded strongly
throughout the year
with leading indicators
remaining positive. There
remains uncertainty over
medium to long-term
market conditions due
to wider macroeconomic
conditions.
Risk assessment
Medium
Trend after mitigation
Up Same Down
NEW
New risk
Strategy Key
Margin expansion
Sustainable growth
Engaged people
Positive impact
Annual Report and Accounts 2021 Tyman plc 87
STRATEGIC REPORT
Risk Risk description Mitigation
Changes since
last Annual Report
3
Loss of
competitive
advantage
Trend after
mitigation
Link to strategy
Loss of competitive
advantage may adversely
affect the Group financial
performance or reputation
in the short to medium
term. The Group’s ability
to maintain its competitive
advantage is based on
a wide range of factors
including the strength
of the Group’s brands,
the breadth and depth
of our portfolio, the level
of quality and innovation
reflected in our products,
our supply chain flexibility,
excellent customer service
and technical support,
and the depth of customer
relationships we nurture,
all supported by fair and
competitive pricing. Failure
to perform on any one of
these aspects may lead
to erosion of competitive
advantage over time, and
in turn to loss of customers
to competition.
Some of the Group’s markets are
relatively concentrated with two or
three key players, while others are
highly fragmented and offer significant
opportunities for consolidation and
penetration.
Tyman continues to differentiate itself
through its wide range of products, its
focus on customer service including
technical support, its geographical
coverage, innovation capabilities and
the reputation of its brands. The Group
monitors the status of our competitive
advantage through feedback from
customers and close review of the
market positioning of our products.
The Group aims to minimise the
impact of competitve pricing pressures
by competitors through margin
expansion activities including continual
sourcing review, innovation and value
engineering, as well as building long-
term relationships with its customers
based on value creation, quality, service
and technical support.
The overall risk from
loss of competitive
advantage across Tyman’s
global portfolio remains
stable. The disruption
caused by COVID-19
has continued to put
pressure on service levels
across the industry. The
flexibility of the Group’s
manufacturing footprint
allows it to respond quickly
to closure of certain
facilities, delivering better
service levels than some
competitors and enabling
the Group to take market
share.
Risk assessment
Medium
4
Foreign
exchange risk
Trend after
mitigation
Link to strategy
The Group operates
internationally and
is therefore exposed
to transactional and
translational foreign
exchange movements
in currencies other than
sterling. In particular
the Group’s translated
adjusted operating profit
is impacted by the sterling
exchange rate of the US
dollar and the euro.
The Group denominates a proportion of
its debt in foreign currency to align its
exposure to the translational balance
sheet risks associated with overseas
subsidiaries. Ancillary bank facilities are
utilised to manage the foreign exchange
transactional risks and interest rate
exposure through the use of derivative
financial instruments. Where possible the
Group will recover the impact of adverse
exchange movements on the cost of
imported products and materials from
customers.
Sterling exchange rates
remain volatile and the
Group continues to use
hedging to mitigate some
of this risk. This risk is
regarded as stable.
Risk assessment
Medium
Trend after mitigation
Up Same Down
NEW
New risk
Strategy Key
Margin expansion
Sustainable growth
Engaged people
Positive impact
Tyman plc88 Annual Report and Accounts 2021
Principal risks and uncertainties continued
Risk Risk description Mitigation
Changes since
last Annual Report
5
Liquidity and
credit risks
Trend after
mitigation
Link to strategy
The Group must maintain
sufficient capital and
financial resources to
finance its current financial
obligations and fund the
future needs of its growth
strategy.
The Group maintains adequate cash
balances and credit facilities with
sufficient headroom and tenor to
mitigate credit availability risk. The
Group monitors forecast and actual cash
flows to match the maturity profiles of
financial assets and liabilities. In the
medium term the Group aims to operate
within its target leverage range of 1.0x
to 1.5x adjusted EBITDA.
During the year, the Group
achieved further de-
leveraging to 0.9x adjusted
EBITDA, just below the
target range of 1.0–1.5x
adjusted EBITDA.
Risk assessment
Low
6
Information
security
Trend after
mitigation
Link to strategy
Information and data
systems are fundamental
to the successful operation
of Tyman’s businesses.
The Group’s digital assets
are under increasing risk
from hacking, viruses
and ‘phishing’ threats.
Sensitive employee,
customer, banking and
other data may be stolen
and distributed or used
illegally. GDPR increases
the cost of any failure to
protect the Group’s digital
assets.
The Group continues to develop and test
disaster recovery plans for all sites. The
Group undertakes regular penetration
testing of data systems and maintains
up-to-date versions of software and
firewalls. The Group periodically reviews
and improves IT system controls.
In August 2020, a Group
Head of IT was appointed
with responsibility for
the Group’s information
security policies and
controls. Training and IT
controls improvements
have continued to be
implemented during the
year as a key element of
our IT Strategy.
Risk assessment
High
7
Raw material
costs and
supply chain
failures
Trend after
mitigation
Link to strategy
Raw materials used in
the Group’s businesses
include commodities that
experience price volatility
(such as oil derivatives,
steel, aluminium and
zinc). The Group’s
ability to meet customer
demands depends on
obtaining timely supplies
of high quality components
and raw materials on
competitive terms.
Products or raw materials
may become unavailable
from a supplier due to
events beyond the Group’s
control.
The Group continues to invest in and
improve its sourcing and procurement
capability with dedicated supply chain
resources. The Group manages supply
chain risk through developing strong
long-term relationships with its key
suppliers, regular risk assessment
and audit of suppliers including
logistics providers, review of make or
buy strategies, dual-sourcing where
appropriate and maintaining adequate
safety stocks throughout the supply
chain. Where commodity and other
material cost increases materialise, the
Group seeks to recover the incremental
cost through active price management.
The Group has recovered
the majority of input
cost inflation in the year
however there remains
an element of lag due to
timing of implementing
price increases and pricing
mechanisms with some
of our larger customers.
The Group continues to
proactively manage supply
chain risks, with current
focus in particular on
global shipping bottlenecks
and UK/EU supply chain
disruption.
Risk assessment
Medium
Annual Report and Accounts 2021 Tyman plc 89
STRATEGIC REPORT
Risk Risk description Mitigation
Changes since
last Annual Report
8
Key executives
and personnel
Trend after
mitigation
Link to strategy
The Group’s future success
is substantially dependent
on the continued services
and performance of its
senior management and
its ability to continue to
attract and retain highly
skilled and qualified
personnel at Group,
divisional and site level.
The Group mitigates the risk of losing
key personnel through robust succession
planning, strong recruitment processes,
employee engagement and retention
initiatives, and long-term management
incentives.
Significant attention
continues to be paid
to employee wellbeing
and engagement as
pandemic-related
disruption continues,
recognising the additional
strains this has put on our
workforce and in particular
on management teams in
meeting the needs of our
customers.
Risk assessment
Low
9
Compliance
with laws and
regulations
Trend after
mitigation
Link to strategy
A lack of understanding
or non-compliance with
laws and regulations in
any jurisdiction in which
the Group operates could
lead to significant financial
penalty and/or severe
damage to the Group’s
reputation. Legal and
regulatory requirements
can be complex and
are constantly evolving,
requiring ongoing
monitoring and training.
Mitigations include:
• A comprehensive and engaging Code
of Business Ethics and associated
training
• Supporting policies and standards
that set out the compliance
requirements in detail
• A group-wide ‘SpeakUp’
whistleblowing mechanism
• Risk framework to identify,
assess and monitor business and
compliance risks
• Specific legal and compliance matters
reviewed by the Group General
Counsel as required
Whilst added as a Group
principal risk, there is no
year-on-year change in the
level of unmitigated risk.
A Group General Counsel
was appointed for the first
time in 2020. The General
Counsel led a process to
deploy the Group’s new
Code of Business Ethics
which has been deployed
throughout 2021 / Q1
2022.
Risk assessment
Low
10
Execution
of major
programmes
Trend after
mitigation
Link to strategy
The Group has a range
of change management
programmes and strategic
initiatives underway to
support our ‘Focus, Define,
Grow’ Strategy. Failure
to effectively execute
these programmes could
adversely affect the
Group’s ability to deliver
on key elements of our
strategy.
Oversight mechanisms to track the
progress of all strategic programmes
take place on a monthly basis at Group
and divisional levels. In addition, each
programme has established project
governance disciplines in place including
project managers for each programme.
Whilst added as a Group
principal risk there remains
no year-on-year change
in the level of unmitigated
risk with the development
and execution of key
programmes progressing
well.
Risk assessment
Medium
Trend after mitigation
Up Same Down
NEW
New risk
Strategy Key
Margin expansion
Sustainable growth
Engaged people
Positive impact
Tyman plc90 Annual Report and Accounts 2021
Principal risks and uncertainties continued
Risk Risk description Mitigation
Changes since
last Annual Report
11
Climate
change and
sustainability
Trend after
mitigation
NEW
Link to strategy
Adverse impacts of climate
change may, over time,
affect the operations of
the Group, its supply
chains and the markets
in which it operates. This
could include physical
(weather related) risks,
as well as failing to adapt
to legal, technological and
market demands for more
sustainable operations and
product solutions. More
broadly, customer, investor
and societal expectations
have never been higher for
companies to respond with
action on ESG topics.
Should the Group not
reduce its GHG emissions
and deliver its other
sustainability commitments
in line with Tyman’s targets
and ambition, it may be
subject to increased costs,
adverse financial impacts,
reputational damage and
failure to attract/retain
future talent.
• The Group maintains a 2030
sustainability roadmap, setting
out Tyman’s ESG ambitions and
targets, which include reducing GHG
emissions and growing revenues from
more sustainable solutions.
• Dedicated sustainability leader is in
place in each division to drive the
execution of the roadmap.
• Regular reviews are held both at a
divisional level and groupwide via
a sustainability forum. Twice yearly
deep-dives are held with the ExCo to
facilitate the sharing of cross-team
learnings and identify opportunities
to synergise and/or accelerate.
Disclosures will also be enhanced against
the recommendations in the TCFD
framework, including risk mitigation
and completing a quantitative scenario
analysis.
This is a new risk in 2021.
Risk assessment
Medium
The Strategic Report has been approved by the Board and
signed on its behalf by
Peter Ho
General Counsel & Company Secretary
3 March 2022
Annual Report and Accounts 2021 Tyman plc 91
STRATEGIC REPORT
Nicky Hartery
Non-executive Chair
Jo Hallas
Chief Executive Officer
Jason Ashton
Chief Financial Officer
Pamela Bingham
Non-executive Director
Helen Clatworthy
Non-executive Director
David Randich
Non-executive Director
Paul Withers
Non-executive Director
N
R A
N
R A
N
R A
N
R A
N
R
Appointment to the Board
Nicky Hartery was
appointed to the Board
as a Non-executive
Director on 1 October
2020 and as Chair of the
Board and Chair of the
Nominations Committee on
1 December 2020.
Skills and qualifications
Nicky is a Chartered
Engineer with an electrical
engineering degree from
University College Cork and
an MBA from University of
Galway. He has extensive
operational and general
management experience
gained in international
manufacturing companies,
which he later leveraged
to set up a Lean Six Sigma
business transformation
consultancy, Prodigium. He
has strong experience of
North American markets,
both as an Executive and
Non-executive director.
Relevant past experience
From 2012 to 2019, Nicky
was the Chair of CRH plc,
the global building materials
FTSE 100 company, and has
also been a Non-executive
director of Eircom Ltd.
Nicky spent his executive
career at General Electric,
Verbatim / Eastman Kodak
and Dell Inc, including
being based in the US for
ten years.
External appointments
Nicky is currently Chair of
the Musgrave Group, a Non-
executive director of Finning
International Inc and Chair
of Horse Racing Ireland.
Appointment to the Board
Jo joined Tyman on 1 March
2019 and was appointed
Chief Executive Officer with
effect from 1 April 2019.
Skills and qualifications
Jo is a Chartered Engineer
with an engineering degree
from the University of
Cambridge and an MBA
from INSEAD. She has
extensive international
management experience
focused on business
transformation through
organic and acquisitive
growth in the global
industrial and consumer
sectors, achieved through
establishing and leading
strategic clarity and
execution.
Relevant past experience
Jo was previously Business
Group Director for
Spectris plc, where she
had responsibility for a
portfolio of global industrial
technology businesses. Prior
to this, Jo led the Invensys
heating controls business.
Jo has also held senior
commercial roles with the
Bosch Group in the UK and
Germany, and ten years
with Procter and Gamble in
Germany, the USA and Asia.
Jo is a former Non-
executive Director of
Norcros plc.
External appointments
Jo is a Non-executive
Director of Smith &
Nephew plc.
Appointment to the Board
Jason joined Tyman on
29 April 2019 and was
appointed Chief Financial
Officer on 9 May 2019.
Skills and qualifications
Jason is a Chartered
Accountant and has a
degree in Economics
from the University
of Manchester. His
career in international
manufacturing-based
businesses includes
significant experience of
commercial finance, M&A,
investor relations and tax
and treasury functions.
Relevant past experience
Jason was formerly Interim
Group Chief Financial Officer
of Nomad Foods Limited,
the UK-headquartered,
NYSE-listed frozen foods
group. Prior to this, he was
Group Finance Director for
the Iglo Group, leading the
business through its €2.6
billion acquisition by Nomad
Foods and subsequent €0.7
billion acquisition of the
Findus Group. Jason has
also held senior finance
and commercial positions
with Mondalez (Kraft), Plum
Baby and Cadbury plc,
based variously in the UK,
Belgium, Poland, Russia
and Turkey. His early career
included roles with Diageo
plc, Tetley Group and KPMG.
External appointments
None.
Appointment to the Board
Pamela Bingham was
appointed to the Board in
January 2018 as a Non-
executive Director. She is
the Non-executive Director
responsible for employee
engagement across
the Group.
Skills and qualifications
Pamela has a law degree
from the University of
Edinburgh and holds an
MBA from Warwick Business
School. She practised as
a solicitor before moving
into general management.
Pamela has a proven track
record as a commercial
leader, focusing on strategic
direction and leading
cross-cultural teams to
deliver growth and business
expansion. She has worked
in the building products,
engineering, mining,
renewable energy and oil
and gas sectors.
Relevant past experience
Pamela was most recently
Managing Director,
Infrastructure Products
Group, Europe & Australia,
at CRH and before this she
was Managing Director
of Weir Minerals Europe.
She previously held senior
management roles with
Rotork plc, David Brown
Group Ltd and CSE-Servelec
Ltd. Her early career was
spent as an in-house
counsel for English Welsh
and Scottish Railway Ltd
and for the Yorkshire
Building Society.
External appointments
Pamela is currently Chief
Executive of Glen Dimplex’s
Heating and Ventilation
Division.
Appointment to the Board
Helen Clatworthy was
appointed to the Board in
January 2017 as a Non-
executive Director. She was
appointed Chair of the Audit
and Risk Committee in
May 2017.
Skills and qualifications
Helen is a Fellow of the
Chartered Institute of
Management Accountants
and has significant
operational and corporate
experience particularly
in cost management,
acquisition integration,
information technology and
change management.
Relevant past experience
Helen is a former member
of the executive committee
of Imperial Brands plc,
where, as Business
Transformation Director,
she led integration activities
for Imperial’s enlarged US
business and a group-wide
strategic cost optimisation
programme. Helen held
a number of other senior
roles at Imperial including
Finance Director for
Western Europe and Group
Supply Chain Director.
External appointments
Helen is Chair of the
Imperial Tobacco
Pension Fund.
Appointment to the Board
David Randich was
appointed to the Board as
a Non-executive Director
on 15 December 2021
and is a member of the
Nominations, Audit and
Risk and the Remuneration
Committees.
Skills and qualifications
Dave brings extensive
experience of the North
American building products
market to the Tyman Board.
He holds a BS in Industrial
Management from Purdue
University and an MBA from
Mercer University.
Relevant past experience
At Fortune Brands, Dave
was President of the
Masterbrand Cabinets
business for seven years
and President of the
Therma-Tru Doors business
for five years. Prior to
Fortune Brands, Dave held
an international career with
Armstrong World Industries,
with roles in China, the
UK, Germany and the
US. Dave has also been a
Non-executive Director of
Springs Window Fashions.
External appointments
Dave lectures at Purdue
University’s Krannert School
of Management.
Appointment to the Board
Paul Withers was appointed
to the Board as a Non-
executive Director in
February 2020 and as
Chair of the Remuneration
Committee and Senior
Independent Director from
April 2020.
Skills and qualifications
Paul qualified as a
Mechanical Engineer, is a
Sloan Fellow of the London
Business School and holds
an MA in Mathematics from
Cambridge University and a
DPhil in Mathematics from
Oxford University. He has
extensive experience in
international manufacturing
businesses and, in
particular, strong knowledge
of US markets, both as
an Executive and Non-
executive Director.
Relevant past experience
Paul’s executive career
was spent at BPB plc,
the international building
materials business, where
he was Group Managing
Director.
Paul is a former Non-
executive Director of
Premier Farnell plc, Hyder
Consulting plc, Devro plc
and Keller Group plc. He
held the roles of Senior
Independent Director and
Chair of the Remuneration
Committee in each of these.
External appointments
None.
Board of Directors
Tyman plc92 Annual Report and Accounts 2021
Nicky Hartery
Non-executive Chair
Jo Hallas
Chief Executive Officer
Jason Ashton
Chief Financial Officer
Pamela Bingham
Non-executive Director
Helen Clatworthy
Non-executive Director
David Randich
Non-executive Director
Paul Withers
Non-executive Director
N
R A
N
R A
N
R A
N
R A
N
R
Appointment to the Board
Nicky Hartery was
appointed to the Board
as a Non-executive
Director on 1 October
2020 and as Chair of the
Board and Chair of the
Nominations Committee on
1 December 2020.
Skills and qualifications
Nicky is a Chartered
Engineer with an electrical
engineering degree from
University College Cork and
an MBA from University of
Galway. He has extensive
operational and general
management experience
gained in international
manufacturing companies,
which he later leveraged
to set up a Lean Six Sigma
business transformation
consultancy, Prodigium. He
has strong experience of
North American markets,
both as an Executive and
Non-executive director.
Relevant past experience
From 2012 to 2019, Nicky
was the Chair of CRH plc,
the global building materials
FTSE 100 company, and has
also been a Non-executive
director of Eircom Ltd.
Nicky spent his executive
career at General Electric,
Verbatim / Eastman Kodak
and Dell Inc, including
being based in the US for
ten years.
External appointments
Nicky is currently Chair of
the Musgrave Group, a Non-
executive director of Finning
International Inc and Chair
of Horse Racing Ireland.
Appointment to the Board
Jo joined Tyman on 1 March
2019 and was appointed
Chief Executive Officer with
effect from 1 April 2019.
Skills and qualifications
Jo is a Chartered Engineer
with an engineering degree
from the University of
Cambridge and an MBA
from INSEAD. She has
extensive international
management experience
focused on business
transformation through
organic and acquisitive
growth in the global
industrial and consumer
sectors, achieved through
establishing and leading
strategic clarity and
execution.
Relevant past experience
Jo was previously Business
Group Director for
Spectris plc, where she
had responsibility for a
portfolio of global industrial
technology businesses. Prior
to this, Jo led the Invensys
heating controls business.
Jo has also held senior
commercial roles with the
Bosch Group in the UK and
Germany, and ten years
with Procter and Gamble in
Germany, the USA and Asia.
Jo is a former Non-
executive Director of
Norcros plc.
External appointments
Jo is a Non-executive
Director of Smith &
Nephew plc.
Appointment to the Board
Jason joined Tyman on
29 April 2019 and was
appointed Chief Financial
Officer on 9 May 2019.
Skills and qualifications
Jason is a Chartered
Accountant and has a
degree in Economics
from the University
of Manchester. His
career in international
manufacturing-based
businesses includes
significant experience of
commercial finance, M&A,
investor relations and tax
and treasury functions.
Relevant past experience
Jason was formerly Interim
Group Chief Financial Officer
of Nomad Foods Limited,
the UK-headquartered,
NYSE-listed frozen foods
group. Prior to this, he was
Group Finance Director for
the Iglo Group, leading the
business through its €2.6
billion acquisition by Nomad
Foods and subsequent €0.7
billion acquisition of the
Findus Group. Jason has
also held senior finance
and commercial positions
with Mondalez (Kraft), Plum
Baby and Cadbury plc,
based variously in the UK,
Belgium, Poland, Russia
and Turkey. His early career
included roles with Diageo
plc, Tetley Group and KPMG.
External appointments
None.
Appointment to the Board
Pamela Bingham was
appointed to the Board in
January 2018 as a Non-
executive Director. She is
the Non-executive Director
responsible for employee
engagement across
the Group.
Skills and qualifications
Pamela has a law degree
from the University of
Edinburgh and holds an
MBA from Warwick Business
School. She practised as
a solicitor before moving
into general management.
Pamela has a proven track
record as a commercial
leader, focusing on strategic
direction and leading
cross-cultural teams to
deliver growth and business
expansion. She has worked
in the building products,
engineering, mining,
renewable energy and oil
and gas sectors.
Relevant past experience
Pamela was most recently
Managing Director,
Infrastructure Products
Group, Europe & Australia,
at CRH and before this she
was Managing Director
of Weir Minerals Europe.
She previously held senior
management roles with
Rotork plc, David Brown
Group Ltd and CSE-Servelec
Ltd. Her early career was
spent as an in-house
counsel for English Welsh
and Scottish Railway Ltd
and for the Yorkshire
Building Society.
External appointments
Pamela is currently Chief
Executive of Glen Dimplex’s
Heating and Ventilation
Division.
Appointment to the Board
Helen Clatworthy was
appointed to the Board in
January 2017 as a Non-
executive Director. She was
appointed Chair of the Audit
and Risk Committee in
May 2017.
Skills and qualifications
Helen is a Fellow of the
Chartered Institute of
Management Accountants
and has significant
operational and corporate
experience particularly
in cost management,
acquisition integration,
information technology and
change management.
Relevant past experience
Helen is a former member
of the executive committee
of Imperial Brands plc,
where, as Business
Transformation Director,
she led integration activities
for Imperial’s enlarged US
business and a group-wide
strategic cost optimisation
programme. Helen held
a number of other senior
roles at Imperial including
Finance Director for
Western Europe and Group
Supply Chain Director.
External appointments
Helen is Chair of the
Imperial Tobacco
Pension Fund.
Appointment to the Board
David Randich was
appointed to the Board as
a Non-executive Director
on 15 December 2021
and is a member of the
Nominations, Audit and
Risk and the Remuneration
Committees.
Skills and qualifications
Dave brings extensive
experience of the North
American building products
market to the Tyman Board.
He holds a BS in Industrial
Management from Purdue
University and an MBA from
Mercer University.
Relevant past experience
At Fortune Brands, Dave
was President of the
Masterbrand Cabinets
business for seven years
and President of the
Therma-Tru Doors business
for five years. Prior to
Fortune Brands, Dave held
an international career with
Armstrong World Industries,
with roles in China, the
UK, Germany and the
US. Dave has also been a
Non-executive Director of
Springs Window Fashions.
External appointments
Dave lectures at Purdue
University’s Krannert School
of Management.
Appointment to the Board
Paul Withers was appointed
to the Board as a Non-
executive Director in
February 2020 and as
Chair of the Remuneration
Committee and Senior
Independent Director from
April 2020.
Skills and qualifications
Paul qualified as a
Mechanical Engineer, is a
Sloan Fellow of the London
Business School and holds
an MA in Mathematics from
Cambridge University and a
DPhil in Mathematics from
Oxford University. He has
extensive experience in
international manufacturing
businesses and, in
particular, strong knowledge
of US markets, both as
an Executive and Non-
executive Director.
Relevant past experience
Paul’s executive career
was spent at BPB plc,
the international building
materials business, where
he was Group Managing
Director.
Paul is a former Non-
executive Director of
Premier Farnell plc, Hyder
Consulting plc, Devro plc
and Keller Group plc. He
held the roles of Senior
Independent Director and
Chair of the Remuneration
Committee in each of these.
External appointments
None.
Committee membership key
A
Audit and Risk Committee
N
Nominations Committee
R
Remuneration Committee
Committee chair
Annual Report and Accounts 2021 Tyman plc 93
GOVERNANCE
The Board maintained its focus on safeguarding our
colleagues and communities whilst also servicing our
customers.”
Nicky Hartery
Non-executive Chair
Dear Shareholder
On behalf of the Board, I am pleased to present the Group’s
Corporate governance report for the financial year ended 31
December 2021.
The aim of this report is to explain Tyman’s governance
framework and how this is aligned with the 2018 UK Corporate
Governance Code (the “Code
”
). to support our long-term
sustainable success.
More details on the membership of the Board’s Committees
and the work they carried out during the year may be
found in the Audit and Risk Committee report, Nominations
Committee report and Remuneration Committee report.
Areas of focus for the Board
In 2021, we experienced strong demand for our products
while having to manage industry-wide supply chain
disruption and US labour challenges, which contributed
to high levels of fatigue amongst our colleagues. The
Board maintained its focus on safeguarding our colleagues
and communities whilst also servicing our customers. In
addition to encouraging the take-up of vaccinations and safe
practices, the Group has extended an Employee Assistance
Programme (“EAP
”
) to all its employees globally to promote
mental wellbeing. We were also pleased to complete the
deployment of the Group’s flagship Safety Leadership
Programme, with all line managers in the Group attending
workshops in either in-person or virtual formats.
The Board has also overseen the continued strengthening
of the Group and the progression of its strategic growth
initiatives including sustainability roadmap. During the
period, this was primarily focused on fostering a cohesive
‘One Tyman’ culture underpinned by the formalisation
of the Tyman Excellence System and the deployment of
the Group’s purpose, values and Code of Business Ethics
(“CoBE
”
). Our sustainability roadmap has been another area
of key focus for the Board, with both education and review
deep-dives to ensure appropriate oversight of our work in
developing our Science Based Targets and expanding our
TCFD reporting. We take very seriously our role in ensuring
clear and appropriate disclosure of our progress against
our sustainability priorities and accordingly were delighted
to have been runner-up in the industrials category of ESG
Investing’s “Best Sustainability Reporting Awards”.
Engagement with stakeholders
The Group’s strong corporate culture enabled senior
management to navigate the many twists and turns of doing
business in 2021. The Board was kept abreast of developments
through regular reports by the CEO as well as through
discussions with other members of the Executive Committee
and their reports.
Despite the challenges of continued travel restrictions in 2021,
I am pleased that the Board were able to visit our Aycliffe site
together, meet in person with our leadership teams for both
the UK & Ireland and International divisions, and meet the
Executive team for a strategy day. Our Workforce Engagement
Non-executive Director was also able to hold both in-person
and virtual skip level meetings during the year.
In 2021, we organised a ‘hybrid’ AGM under our new
articles of association to enable us to better engage with
our shareholders. Under this format, all shareholders were
able to vote and submit questions electronically in advance
and join the AGM online via an audio webcast to hear from
the directors, ask questions of the Board and vote on our
resolutions; we intend to do the same this year. Information
on how to participate digitally, both in advance and on the day,
can be found in the Notice of the Company’s AGM. We look
forward to your participation at the AGM.
Thank you for your support.
Nicky Hartery
Non-executive Chair
3 March 2022
Statement of Governance
Tyman plc94 Annual Report and Accounts 2021
UK Corporate Governance Code
As a company that is premium-listed on the London Stock
Exchange, Tyman is required to explain how it has applied
the main principles of the Code, which is available at
www.frc.org.uk, and the Code’s provisions throughout the
financial year.
The Strategic report and this Governance report, including
the Directors’ Remuneration report, describe how the
Company has applied the principles contained in the Code,
and the statements required by sections 7.1 and 7.2 of
the Disclosure Guidance and Transparency Rules. For the
year ended 31 December 2021, and up to the date of this
report, the Board is pleased to report that the Company
has complied with all aspects of the Code throughout the
period under review, except in respect of the misalignment
of the Chief Executive’s pension payments with the wider
workforce. This was addressed in 2021 and the CEO’s
pension payment was aligned with the wider workforce’s
from 1 January 2022.
Role of the Board
The Board is responsible for the overall leadership, strategy,
culture, development and control of the Group in order to achieve
its strategic objectives. The Board also ensures that there is an
effective system of controls to safeguard the Group’s assets and
to enable risks to be properly assessed and managed.
The Board is the body responsible for making decisions on
all significant matters, as detailed in the schedule of matters
reserved for the Board, and is accountable to shareholders
for creating the sustainable long-term success of the
business.
The areas specifically considered by the Board include:
assessing and monitoring the Group’s culture; approval
of the Group’s strategic plan; ensuring maintenance of a
sound system of internal control and risk management,
including approval of the Group’s risk appetite statements;
responsibility for the review of the Group’s corporate
governance arrangements; and ensuring the Group has the
necessary financial and human resources, processes and
controls to deliver the long-term strategy of the Group.
Matters not specifically reserved for the Board, including the
day-to-day management of the Group, are delegated to the
Executive Directors.
Stakeholder engagement
The Board is responsible for engaging with and
understanding the views of the Group’s key stakeholders.
This includes the need to foster the Group’s business
relationships with its employees, customers, investors and
communities in the countries that the Group operates. The
Board keeps engagement mechanisms under review so that
they remain effective.
The Directors take their duties under section 172 of the
Companies Act 2006 very seriously and consider that they
have acted in the way they consider, in good faith, would
promote the success of the Company for the benefit of its
members as a whole, having regard to the stakeholders
and matters set out in section 172 (1) (a-f) in the decisions
taken during the year ended 31 December 2021. The full
statement, together with how Tyman engages with key
stakeholders can be found on pages 81 to 83.
Governance framework
A schedule of Board meeting dates is set a year in advance,
to ensure the Board meets at regular intervals throughout
the year, at times that align with the operations of the
different business divisions and the financial and reporting
requirements of the Group as a whole.
To ensure relevant topics are given appropriate
consideration, the Board has delegated certain roles to
three principal Committees: Audit and Risk, Remuneration
and Nominations. Membership of these Committees is made
up of the Non-executive Directors. The Board Chair is also a
member of the Nominations and Remuneration Committees.
The work of these Committees in 2021 is explained in
more detail on pages 102 to 115, and page 126. Each of
the Committees’ terms of reference may be found on the
Group’s website.
All Directors have access to the services of the General
Counsel & Company Secretary who is responsible for
ensuring the Group’s governance framework is observed
and the Board and Committees receive the necessary
support in fulfilling their responsibilities.
If thought appropriate, Directors may obtain independent
professional advice in respect of their responsibilities, at the
Company’s expense. No such advice was sought in the year.
Board
The Board’s role is to promote the Group’s long-term sustainable success for the benefit of all the Company’s
stakeholders, generating value for the Company’s shareholders and contributing to wider society. The Board sets
the Group’s long-term business strategy and establishes its purpose and values, which underpin its culture.
Audit and Risk
Committee
Monitors the integrity of the Group’s
external reporting and provides
oversight and governance of its
internal controls, risk management
and relationships with the external
auditors and co-sourced internal
auditors.
Nominations
Committee
Responsible for appointments to
the Board, succession planning
and also the review of the Board’s
structure, size and composition
to ensure that it has a balance of
skills, knowledge, experience and
diversity.
Remuneration
Committee
Responsible for setting the
remuneration policy and individual
compensation for the Board Chair,
Executive Directors and senior
management to ensure that the
Group’s long-term interests are
achieved.
Annual Report and Accounts 2021 Tyman plc 95
GOVERNANCE
Board composition
The names and biographical details of all the current
Directors, as at the date of this report, are set out on pages
80 to 81 and at the Group’s website.
The following Directors served during the year ended
31 December 2021:
Board member Appointed to the Board
Nicky Hartery October 2020
Jo Hallas April 2019
Jason Ashton May 2019
Paul Withers February 2020
Pamela Bingham January 2018
Helen Clatworthy January 2017
Dave Randich December 2021
Independence of Non-executive Directors
Through the work of the Nominations Committee, the Board
ensures that its members have an appropriate mix of skills,
diversity of backgrounds, and relevant industry experiences
such that they can challenge and support the work of
the Executive Directors. Each Non-executive Director has
sufficient knowledge of the Company, which has enabled
them to discharge their duties and responsibilities during
the year.
Key responsibilities
Chair Responsible for the leadership and effective running of the Board and its decision-making processes.
Sponsors and promotes the highest standards of corporate governance.
Sets the Board agenda in consultation with the Chief Executive Officer and the General Counsel
and Company Secretary, ensuring that they are aligned to the Group’s strategic objectives.
Sets the style and tone of Board discussions, facilitating contribution from all Directors.
Leads the Board in determining the strategy and the overall objectives of the Group, including
its approach to environmental, social and governance matters, while ensuring that the Board
determines the nature and extent of the principal risks associated with implementing its strategy.
Leads the effectiveness evaluation of the Board and ensures its effectiveness in all aspects of its
role.
Ensures effective communication with the Company’s shareholders and other stakeholders.
Chief Executive
Officer
Responsible for the day-to-day management of the Group.
Promotes the Group’s culture and values.
Leads the Executive team and develops and implements the Group’s strategic objectives, with
assistance from the Executive Committee.
Responsible for sustainability.
Brings matters of particular significance or risk to the Chair for discussion and consideration by
the Board where appropriate.
Chief Financial
Officer
Responsible for the financial reporting and management of the Group, in addition to the finance,
audit, tax and treasury functions.
Responsible for the day-to-day management of all investor relations matters and for contact with
shareholders, as well as with financial analysts.
Responsible for providing the Board with details of feedback received from institutional
shareholders and any key issues raised.
Senior Independent
Director
Is available for shareholders to voice any concerns which may not be appropriate for discussion
through the normal channels of Chair, CEO or CFO.
Provides a sounding board for the Chair and supports him in his leadership of the Board.
Leads the Chair’s performance appraisal by the other Non-executive Directors and serves as an
intermediary for the other Directors with the Chair as necessary.
Non-executive
Directors
Bring complementary skills and experience to the Board.
Constructively challenge the Executive Directors on matters affecting the Group.
As part of the externally facilitated Board and committees’
effectiveness evaluation in 2021, the Board reviewed
the independence of the Directors. Having reviewed
the other positions held by the Non-executive Directors
and the possibility of any potential conflicts of interest,
the Board continues to consider that each of the Non-
executive Directors is independent, as defined against the
independence criteria as set out in the Code, believing each
to be independent of character and judgement.
Director induction
Upon appointment, all new Directors receive a
comprehensive and tailored induction programme, providing
them with the opportunity to learn about the operations,
making specific site visits and meeting divisional and local
management. Recent Director inductions were successfully
facilitated under pandemic-related movement restrictions
using a combination of in-person and remote meetings,
briefing notes and both in-person as well as video tours of
facilities.
Tyman plc96 Annual Report and Accounts 2021
Statement of Governance continued
Board and Committee attendance
The following table shows the attendance record of the Directors at the scheduled Board and relevant Committee meetings
held during the year.
Board member Board Audit Remuneration Nominations AGM
Nicky Hartery 8/8 n/a 4/4 3/3 1/1
Jo Hallas 8/8 n/a n/a n/a 1/1
Jason Ashton 8/8 n/a n/a n/a 1/1
Paul Withers 8/8 4/4 4/4 3/3 1/1
Pamela Bingham 7/8 4/4 3/4 2/3 1/1
Helen Clatworthy 8/8 4/4 4/4 3/3 1/1
Dave Randich
1
1/1 n/a 1/1 1/1 n/a
1
Dave Randich was appointed as a Non-executive Director of the Board and a member of the Audit and Risk, Remuneration and
Nominations Committees on 15 December 2021.
Attendance at Board meetings
Eight scheduled Board meetings were held during the year. The Board also met on an ad hoc basis on two further occasions
to consider the Group’s responses to certain corporate matters. Where expedient, the Board also delegated a number of
administrative and completion matters to a duly-appointed sub-committee of the Board.
Work of the Board during 2021
The Board’s principal matters during 2021 are summarised below:
Principal matter
Health and safety • Reviewed and debated the ongoing health and safety impact of COVID-19 on business
operations, and the measures necessary to manage and mitigate the impact on employees,
their families and communities (see pages 51 and 52)
• Received details of every health and safety lost time incident, including remedial actions
taken, lessons learned and future preventative measures (see pages 50 and 51)
• Oversaw the deployment of the Group’s Safety Leadership Programme (see page 48)
• Oversaw the implementation of the Employee Assistance Programme in Mexico, Canada and
the International Division (see page 52)
Strategy and
sustainability
• Reviewed and approved the updated Group strategy (see pages 20 to 25)
• Received progress reports on the implementation of the Group’s ‘Sustainability Roadmap’
(see page 46)
• Reviewed and discussed updates on trading performance, markets and strategic initiatives,
including presentations from the Group’s senior management
• Received reports on new product development and launches
Governance • Recruited and initiated the induction of a new Non-executive Director (see page 31 and 96)
• Participated in an externally-facilitated Board evaluation (see pages 98 to 99)
• Received reports from the Chairs of the Nominations, Audit and Remuneration Committees
Purpose, values and
Group culture
• Received reports from the General Counsel & Company Secretary on general governance
updates, material legal matters and speak up reports (see page 61)
• Received progress reports from the General Counsel & Company Secretary on the Group’s
Business Ethics and Compliance Programme
• Reviewed and approved the Group’s Modern Slavery Act statement
• Oversaw the plans to pay all UK employees the Real Living Wage rate
Financial • Actively monitored trading performance conditions, ongoing scenario modelling, monthly CFO
reports and supported management’s actions in responding to ongoing challenges
• Considered and approved plans to repay the USPP notes
• Approved the budget for 2022 and set KPIs (see pages 26 to 28)
• Reviewed and approved the half-year 2021 and full-year 2020 annual results, viability and
going concern statements and the 2021 AGM notice
• Reviewed the Group’s risk register, risk appetite statement and the effectiveness of the
systems of internal control and risk management (see pages 84 to 91)
Annual Report and Accounts 2021 Tyman plc 97
GOVERNANCE
Principal matter
Investor
relations and
communications
• Received presentations from the Company’s brokers and financial advisers on the Company’s
shareholder profile and market perception
• Received feedback from proxy advisers in respect of the 2021 AGM resolutions
• Received reports and feedback from analysts and shareholders following meetings with them
(see page 99)
Employee
engagement
• Visits to sites and discussions with management, conducted in person or remotely (see
page 98)
• Received and discussed reports from the Workforce Engagement NED, Pamela Bingham,
following her skip-level meetings with employees across the divisions (see page 62)
Board visits to the operations
As part of the Board’s work, the Directors visit operating units each year to meet with divisional management and to
see these businesses first-hand. In 2021, the Board was able to visit the Newton Aycliffe site in person but subsequent
movement restrictions prevented travel to other sites. The Group adapted by providing virtual tours of the i54 site for the
new Non-executive Director’s induction.
Both the Chief Executive and the Workforce Engagement NED held skip-level employee meetings in 2021. The Chief
Executive met with over 50 managers and supervisors from North America sites where they expressed their passion for
the business, their appreciation for the intense focus on safety and their desire to strengthen company culture, including
greater collaboration across sites.
The Workforce Engagement NED had separate in-person and online meetings with diverse employees and employee
representatives across the Group’s UK, Italy and US businesses. The meetings provided her with opportunities to better
understand local challenges and practices, opportunities for improvement and to promote a direct link into the Board.
Board performance evaluation
The Board undertakes a formal evaluation of its performance, and that of each Director, on an annual basis. Such
evaluations are conducted in accordance with the principles set out in the Code and include consideration of the skills,
composition and performance of the Board, its Committees and individual Directors.
The following sets out the progress on key recommendations concluded in the 2020 Board evaluation, which was conducted
internally:
Recommendation Actions planned in 2021 Progress made
Strengthen
engagement with
stakeholders
• Meet with local management at site visits
• Meet with other stakeholders
• The Board was able to meet with local
managers and employees at visits to
Newton Aycliffe and Wolverhampton, and
the Executive Directors were also able to
visit sites in the USA and Italy
• The Workforce Engagement NED met
with employees at skip-level engagement
meetings
Strengthening of
the Group’s risk
framework
• Deployment of the Code of Business Ethics
• Deployment of Group Minimum Standards
of Financial Control framework
• Implementation of a programme of risk
management activities
• Deployment of the Code of Business Ethics
• Deployment of Group Minimum Standards
of Financial Control framework
• Implementation of a programme of risk
management activities
Develop deeper
insights into key
subjects
• Organise deep dives into subjects such
as sustainability, cybersecurity and
e-commerce
• The Board has had deep-dive sessions
with the Group Head of Health, Safety
and Sustainability as well as the Group
Head of IT
This year, the Board participated in an externally facilitated review. Dr Tracy Long of Boardroom Review, who has no
connection to Tyman or its individual Directors, led our external evaluation. Please refer to page 103 for further details of
Dr Long’s appointment. Following briefings by the Board Chair, the Chief Executive and the General Counsel & Company
Secretary, the evaluation consisted of a review of the Board and committee packs, presentations and her observations
of a virtual site tour, management presentations, Board, Nominations and Remuneration Committee meetings, as well
as individual interviews with Directors and key stakeholders of the Board and its committees. The Board subsequently
considered a discussion document that analysed the Board’s strengths against specific recommendations designed to
support the Board in preparing for the Group’s future challenges. Findings in respect of individual performance were
discussed with the Board Chair and individual Directors. Subsequently, the Board Chair led the Board discussion on the
findings and, following a constructive debate, the Board agreed the priorities and actions to be implemented.
Tyman plc98 Annual Report and Accounts 2021
Statement of Governance continued
The evaluation concluded that the Board has many strengths, which include:
• a strong collegiate style and team spirit, which was evident in the good open dialogue at the meetings of the Board
and its committees, and a strengthened and complementary blend of different voices and contributions that have been
refreshed over the last three years;
• the leadership of the Chair and the CEO and the good use of time, including an adept adaptation to the recent necessity
of virtual working; and
• the Board’s significant attention to risk and control, including safety, ethics and customer service.
Additionally, the evaluation also made the following principal recommendations:
Recommendation
Recommendation 1 The Board should continually monitor Board composition and succession planning alongside the
development of its skills matrix and a formal appraisal process.
Recommendation 2 The Board should develop a forward agenda that combines both formal and informal time,
including increased use of private meetings between the CEO and the Non-executive Directors
during the year.
Recommendation 3 The Board ought to continually review and ensure alignment of its appetite for risk against the
changing business landscape and its strategic imperatives as the Group evolves.
Thus, the Board will continue to review its procedures, effectiveness and development and composition during 2022. The
Board Chair will use the Board evaluation’s output and the performance reviews of individual Directors to further develop
the Board’s performance in the year ahead.
The Board review also concluded that the Non-executive Directors have sufficient time to meet their Board responsibilities.
Separately, the Senior Independent Director led the Non-executive Directors to carry out a review of the Chair’s
performance. It was found that the Chair continues to effectively discharge his duties and demonstrates full commitment to
the role as evidenced by the progress made in all areas of the Board’s work.
The reviews in 2022 and 2023 will be facilitated internally and led by the Board Chair and the General Counsel & Company
Secretary. The 2024 review will be facilitated externally.
Investor relations programme
The Board is fully committed to maintaining good communications with the Company’s shareholders through its investor
relations programme.
Tyman operates a planned schedule of communications and investor relations activities throughout the year. The CEO and
CFO have day-to-day responsibility for all investor relations matters and for contact with shareholders, as well as with
financial analysts.
The Group CEO provides the Board with details of feedback received from institutional shareholders and any key issues
raised. Regular dialogue with institutional shareholders and financial analysts is principally maintained through:
• meetings and calls involving the Chief Executive Officer and the Chief Financial Officer;
• four scheduled releases to the market of updates on the financial performance of the Group;
• the Chair regularly engaging with larger institutional shareholders to discuss matters including the Board, strategy,
corporate governance and succession planning; and
• a total of 109 separate meetings were held by members of the Board in 2021 with shareholders and prospective
shareholders, analysts and equity salesforces.
In addition, the Company actively engages with individual shareholders who periodically contact the Company.
Copies of all announcements and presentations made at investor events are published on the Group’s website in order to
ensure that all shareholders, whether private or institutional, have equal access to information.
It is currently envisaged that a similar shareholder engagement programme will be run during the 2022 financial year.
A table setting out the Company’s major shareholders can be found on page 139.
2021 AGM
The Company’s AGM is a key date for the Board, as it provides the Directors with the opportunity to meet with shareholders
and both private and institutional investors.
In 2021, in line with the Financial Reporting Council’s guidance, which was published in “Corporate Governance AGMs:
An Opportunity for Change”, the Company organised a hybrid AGM that allowed for shareholders to attend in person
or electronically via a live audio webcast. This AGM format allowed for shareholders to be counted in the quorum, ask
questions of the Directors and cast live votes via the Lumi platform whilst complying with the UK Government’s measures
to restrict travel and public gatherings that were then in force and also safeguard the health and safety of our shareholders,
colleagues and communities.
Annual Report and Accounts 2021 Tyman plc 99
GOVERNANCE
Access to the Chair and Non-executive Directors
The Chair and Non-executive Directors make themselves
available to attend meetings with major shareholders
at their request. The Chair attended a number of such
meetings during the year to cover areas such as the Board,
strategy, corporate governance and succession planning. As
face-to-face meetings were neither practical nor possible
at various parts of the year, most of the meetings were
conducted online or over telephone calls.
Internal control and risk management
The Directors acknowledge that they are responsible for
the Group’s internal control and risk management systems
and for reviewing their effectiveness. Details of this review
process are set out in the Audit and Risk Committee report
on pages 104 to 113.
Directors’ insurance cover
The Company maintains, at its expense, a Directors’ and
Officers’ liability insurance policy to afford an indemnity in
certain circumstances for the benefit of Group personnel
including, as recommended by the Code, the Directors. This
insurance policy does not provide cover where the Director
or Officer has acted fraudulently or dishonestly.
Directors’ responsibilities statement
The Directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulation.
English company law requires the Directors to prepare
financial statements for each financial year. Accordingly, the
Directors have prepared the Group’s 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 English 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 the Company and of the profit or loss of the Group and
the Company 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
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 the Company will continue in business.
The Directors are also responsible for safeguarding the
assets of the Group and the Company and hence for taking
reasonable steps for the prevention and detection of fraud
and other irregularities.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Group and Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the
Group and the Company and enable them to ensure that the
financial statements and the Directors’ Remuneration report
comply with the Companies Act 2006 and, as regards the
Group financial statements, Article 4 of the IAS Regulation.
The Directors are responsible for the maintenance and
integrity of the Group’s website. Legislation in the UK
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
The Directors consider that the Annual Report and Accounts,
taken as a whole, is fair, balanced and understandable
and provides the information necessary for shareholders
to assess the Group’s and the Company’s position and
performance, business model and strategy.
Each of the Directors, whose names and functions are listed
in the Annual Report and Accounts, confirms that, to the
best of their knowledge:
• 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, financial position and profit of
the Company;
• the Group financial statements, which have been
prepared in accordance with UK-adopted international
accounting standards and applicable law, give a true and
fair view of the assets, liabilities, financial position and
profit of the Group; and
• the Directors’ report includes a fair review of the
development and performance of the business and the
position of the Group and the Company, together with a
description of the principal risks and uncertainties that
the Group 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 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.
By order of the Board
Nicky Hartery
Non-executive Chair
3 March 2022
Tyman plc100 Annual Report and Accounts 2021
Statement of Governance continued
GOVERNANCE
101Tyman plcAnnual Report and Accounts 2021
Dear Shareholder
I am pleased to present the Nominations Committee’s
report for the year ended 31 December 2021.
Role and responsibilities of the Committee
The Committee’s role is to support the Board within the
Group’s governance framework by providing oversight
of the business’s leadership needs, both Executive and
Non-executive, with a view to ensuring that the Group is
able to implement its strategy, achieve its objectives and
compete effectively. It does this by reviewing and making
recommendations to the Board on the size, structure and
composition of the Board and Committees. In compliance
with the Code, it also ensures that plans are in place for the
orderly succession to both Board and senior management
positions, including overseeing the development of a diverse
pipeline for succession.
The Committee ensures all Board appointments are made
in line with the Group’s Diversity and Inclusion Policy.
This states that all decisions involving people, including
recruitment, are based on objective assessment that reflects
talent, engagement and achievement and are not subject to
any form of bias.
Committee meetings
The Committee met three times in 2021. In addition to
the members of the Nominations Committee, who are all
independent Non-executive Directors, and the General
Counsel & Company Secretary, the Chief Executive was
invited to attend whenever the Committee felt that it was
necessary to enable a full discussion of its agenda items.
New Non-executive Director
We welcomed Dave Randich onto the Board and the
Committee on 15 December 2021 following a rigorous
process to recruit a North American Non-executive
Director to bring North American building products market
experience to the Board and strengthen the Board’s
geographic diversity.
New Director appointment process
Prior to initiating the recruitment of the new Non-executive
Director, the Chair of the Board and the Nominations
Committee in discussion with members of the Committee
and the Chief Executive agreed the required skills,
knowledge, experience and personal attributes relevant
to the Group’s strategy. Among the criteria were a deep
understanding of the North American building products
market and strong international experience.
The Committee engaged Russell Reynolds, a signatory to
the Voluntary Code of Conduct for Executive Search firms,
with whom the Group has previously worked but otherwise
has no connection, to undertake the search. The Committee
emphasised that diversity of the Board should be a key
consideration in the search and that diversity should be
considered in its widest sense.
The Chair and the Chief Executive created a shortlist of
candidates after reviewing a longlist. They subsequently
met with the shortlist of candidates. Owing to travel
restrictions in force, most of these meetings were conducted
online. Two preferred candidates were identified following
these meetings.
The preferred candidates met with the other members of
the Committee, the Group Chief Financial Officer and the
President of Tyman North America.
Following careful consideration of feedback from interviews
and references that had been taken, the Committee
recommended Dave’s appointment to the Board.
Committee evaluation
The Committee was evaluated as part of the external
effectiveness review of the Board and its committees
(details of which can be found on pages 98 and 99).
Committee members were interviewed by the external
reviewer, Dr Tracy Long, who also observed the Committee
meeting in December 2021. The evaluation concluded that
the Committee should continue to strengthen its focus on
Executive and Non-executive succession planning, having
regard to diversity and inclusion and key competencies that
are important to the Group’s present and future.
Review of Board effectiveness
The Committee assists the Board in the operation of
its three-year cycle of evaluations. The first year of the
cycle comprises of an externally facilitated evaluation
that is carried out by an independent consultant. In the
following two years, the Board builds on the outcomes
of the first year using internally devised questionnaires
and the process is led by the Chair of the Board and the
Nominations Committee, but facilitated by the General
Counsel & Company Secretary. In every year, the evaluation
separately assesses the effectiveness of: (a) the Board;
(b) each committee; and (c) the Board Chair. The results
of the Board Chair are reviewed by the Senior Independent
Director.
The 2020 review identified a number of priorities. A
progress report on those priorities can be found on page 98.
The Committee supports the Board within the Group’s
governance framework by providing oversight of the
business’s leadership needs.”
Nicky Hartery
Chair, Nominations Committee
Nominations Committee report
Tyman plc102 Annual Report and Accounts 2021
A tender process was carried out to appoint an appropriate
consultant to conduct the externally facilitated review in
2021. After a rigorous review of potential consultants,
the Chair and the General Counsel & Company Secretary
interviewed a shortlist of two preferred candidates and
ultimately appointed Boardroom Review to carry out the
evaluation. Boardroom Review and its reviewer, Dr Tracy
Long, have no other connection with Tyman. Details of the
evaluation process and its findings and recommendations
can be found on pages 98 and 99.
Committee membership
The members of the Nominations Committee during the
year ended 31 December 2021 were as follows:
Nominations Committee
member
Appointed to
the Committee
Nicky Hartery (Chair) October 2020
Paul Withers February 2020
Pamela Bingham January 2018
Helen Clatworthy January 2017
Dave Randich December 2021
The Nominations Committee membership includes all of the
Non-executive Directors. All its members are independent
Non-executive Directors. The Chair was considered
independent on appointment. Meetings of the Committee
are attended by the Chief Executive Officer by invitation,
when appropriate.
Key activities of the Committee in the last
twelve months
The Committee held three formal meetings during the year
to consider the following:
• The search and selection process for a North American
Non-executive Director.
• A review of the work being undertaken to ensure that
the Group has the appropriate organisation capability in
place to deliver on its strategic objectives.
• A review of the Committee’s terms of reference.
• The review of the Nominations Committee report for
inclusion in the 2020 Annual Report and Accounts.
• Whether share ownership guidelines would be
appropriate for the Non-executive Directors.
• The consideration of the Committee’s priorities for 2022.
Organisation Capability Review (“OCR”)
The Group performed a structured OCR for the third year in
2021. The OCR’s objectives are to:
• identify where there are capability gaps that need to be
addressed to be able to successfully execute the Group’s
strategic plans;
• identify what organisation structure changes may be
required to support this;
• assess the Group’s leadership talent and how this
supports succession plans across the Group; and
• understand areas of key talent risk and any mitigation
actions that may be required; and
• identify the health and shape of the Group’s diversity
and actions required to strengthen this.
The OCR is undertaken annually as a key element of the
Group’s talent management programme and will be used to
strengthen the development of a diverse executive pipeline.
A key element of the OCR process is the conversation that
is stimulated to cross-confirm views on individual talent
and develop precision on what competencies are required
to deliver the Group’s strategy. The review meetings are
first conducted amongst the divisional leadership teams to
consider the organisation below them. This output is then
used by the Division President and Division HR Director to
develop the overall division OCR, which is then reviewed
with the Chief Executive and Group CFO.
The Committee reviewed the findings and the
recommendations of the OCR undertaken in 2021. The
Committee also engaged directly with Senior Management
at the Board strategy meeting on 13 October 2021. At that
meeting, the Committee received strategy updates and
updates on progress against divisional strategic initiatives
from the divisional Presidents. The Committee also met
with members of the UK & Ireland division in December
2021. Such direct engagement is extremely valuable to the
Committee in identifying and developing the talent pipeline
for senior leadership positions.
Diversity of the Board
The aim of the Committee is to ensure that the Board
is well-balanced and appropriate for the needs of the
business and the achievement of its strategy, comprising
of Directors who possess appropriate experiences and
are independent in character and judgement. Therefore,
before recommending new candidates to the Board, the
Nominations Committee takes account of the balance of
skills, knowledge, experience, diversity of background and
cultural fit.
As a member of the FTSE 350, the Committee is mindful
of the Hampton-Alexander Review targets in respect of
gender diversity. It keeps such targets under review when
considering appointments to the Board and is pleased to
confirm continued adherence to these recommendations.
At 31 December 2021, the Board had 42.9% female
representation.
The Committee is also aware of the Parker Review’s
recommendation that each board should have at least one
Director from an ethnic minority background by 2024. In
accordance with our policy on diversity and inclusion, the
Committee will continue to ensure ethnic and all other
aspects of diversity are considered for each appointment.
Committee priorities for 2022
The priorities of the Committee for 2022 are set out below:
• Oversight of the establishment of the Group’s talent
excellence programme
• Continued review of Directors’ skills matrix
• Oversee the implementation of the action plan arising
from the 2021 Board evaluation
• Continue to ensure the right organisation capability is in
place for the Group to deliver on its strategic priorities,
including reviewing senior management succession
planning and the strengthening of talent pipelines
On behalf of the Nominations Committee
Nicky Hartery
Chair, Nominations Committee
3 March 2022
Annual Report and Accounts 2021 Tyman plc 103
GOVERNANCE
The Committee has focussed on providing effective
governance over the Group’s financial reporting, risk
management, internal controls and oversight of the
external audit tender.”
Helen Clatworthy
Chair, Audit and Risk Committee
Dear Shareholder
On behalf of the Board, I am pleased to present an update
on the work of the Audit and Risk Committee during the
year. The Committee has continued to support the Board in
development of the Group’s risk management and internal
control framework, as well as ensuring the integrity and
quality of external financial reporting. This report sets
out the activities of the Committee during 2021 and the
Committee’s priorities for the year ahead.
In 2021, the Committee continued to focus on the core
aspects of governance within the Group. This included the
enhancement of the Group’s risk management and internal
controls frameworks, progress with establishing the new
approach to internal audit, and completing the tender of the
external audit.
The Committee was pleased with progress made in
enhancing the risk management and internal controls
frameworks, which included deployment of the new Code
of Business Ethics and a Group Minimum Standards of
Financial Control framework and the implementation of a
programme of risk management activities developed by
the Group Head of Internal Audit and Risk Management to
further enhance the Group’s approach to enterprise risk
management.
The updated structure and approach to internal audit
has developed well in the year and forms a basis for an
increasingly risk-based approach to internal audit. The 2021
internal audit plan is complete, and I am pleased to report
that all but one audit was completed on-site as COVID-19
restrictions eased. The Committee considered the co-
sourcing relationship with BDO and concluded there was no
need to perform a tender for this arrangement at this time.
BDO will continue to report to the Group Head of Internal
Audit and Risk Management on a co-source basis.
The Committee oversaw a formal and robust external audit
tender process in 2021. Following the recommendation of
the Audit and Risk Committee, the Board has appointed
Deloitte to succeed PwC for the financial year ending 31
December 2022 onwards.
The Committee has also spent time understanding the
requirements of the Taskforce on Climate-Related Financial
Disclosures (“TCFD”) and environmental, social and
governance (“ESG”) reporting, including the impacts on the
risk framework. The Committee is satisfied with progress
made to date.
David Randich was appointed as a Non-executive Director
and a member of the Audit and Risk Committee on 15
December 2021. I would like to welcome David to the
Committee and look forward to his contributions going
forward.
Role of the Committee
The Board has delegated responsibility to the Committee
for the oversight of the Company’s financial reporting,
monitoring the integrity of the financial statements and
other financial communications of the Company. It is
responsible for ensuring that effective governance and
appropriate frameworks are in place for the oversight of the
Company, major subsidiary undertakings and the Group as
a whole, and for considering whether accounting policies
are appropriate.
The Committee operates under terms of reference approved
by the Board. These terms of reference have been reviewed
and updated by the Committee and may be found on the
Group website.
In 2021, the Committee met four times, with meetings
timed to coincide with key dates in the financial reporting
and audit cycles of the Group. To provide the appropriate
focus on key priorities, an annual schedule of Committee
activity is set out a year in advance.
In addition to the Committee members, the Board
Chair, Chief Executive Officer and Chief Financial Officer
regularly attend Committee meetings at the invitation of
the Committee Chair. Other attendees include the Group
Financial Controller and members of the finance team,
senior representatives from the external auditors, PwC, as
well as BDO and the Group Head of Internal Audit and Risk
Management.
In advance of meetings, the Committee is provided with
reports from the Chief Financial Officer, the Group finance
function, PwC and internal audit. These reports provide the
Committee with detailed information on accounting and
audit matters, and the progress the Group is making in
respect of risk management activities and internal control
related matters.
The Committee meets separately with the external auditors
and the Group Head of Internal Audit and Risk Management
during the course of the year, without Executive
management being present. The Chair of the Committee
has also met with PwC outside of Committee meetings to
keep appraised of the year end audit process and audit
matters in general.
Audit and Risk Committee report
Tyman plc104 Annual Report and Accounts 2021
The Committee is authorised to seek independent advice
should it wish to do so; however, this was not required
during the year.
Committee membership
The members of the Committee during the year ended
31 December 2021 were as follows:
Committee member Appointed to the Committee
Helen Clatworthy (Chair) January 2017
Paul Withers February 2020
Pamela Bingham January 2018
David Randich
1
December 2021
1
David Randich joined the Board and Committee on 15
December 2021.
All members are independent Non-executive Directors.
Under provisions of the UK’s Corporate Governance Code,
the Committee should have at least one member with
recent and relevant financial experience and competence
in accounting and/or auditing, and the Committee as a
whole should have competence relevant to the sector in
which the Company operates. The Board considers that
Helen Clatworthy has such recent and relevant financial
experience.
Each member of the Committee has the requisite
competence including significant international, commercial
and operational skills and experience which are relevant to
an international manufacturer and distributor of engineered
components to the building industry.
Annual Report and Accounts 2021 Tyman plc 105
GOVERNANCE
Significant judgements and estimates
The Committee is responsible for monitoring the integrity of the financial statements including significant judgements
and estimates. In undertaking this review, the below significant issues and judgements were discussed with management
and the external auditors. As part of these discussions, the Committee provided challenge to management on the
appropriateness of assumptions and the areas of particular consideration outlined below and sought clarification as
necessary:
Area of focus Audit and Risk Committee review Conclusions
Carrying value
of goodwill and
intangibles
See note 10 to the
Group financial
statements
The Group has goodwill and intangible assets of £430.1 million.
The assessment of the carrying value of intangible assets
involves significant estimates related to drivers of future cash
flows, long-term growth rates and discount rates.
The Committee received a detailed report from management
outlining the valuation methodology, key assumptions used, the
level of headroom, comparison to external market information
and sensitivity analysis.
The Committee discussed the report with management and PwC
and considered whether the key assumptions were appropriate
and the extent to which the valuation was sensitive to changes
in these assumptions. Particular consideration was given to the
level of uncertainty arising from the ongoing effect of COVID-19,
supply chain disruption and the potential impact of climate
change on longer-term cash flows and the terminal growth rate.
The Committee was
satisfied that the
methodology and
assumptions used in the
impairment testing were
appropriate and that no
impairment charge was
required.
Going concern and
viability assessment
See note 2.2 to
the Group financial
statements and pages
78 to 80
The Board is required to satisfy itself that the Company will
continue as a going concern for a period of at least twelve
months from the date of the financial statements. It is also
required to consider the longer-term viability of the Group.
The Committee received a detailed report from management
outlining key assumptions used in the going concern and
viability assessments, along with analysis of liquidity headroom
and covenant compliance under a base case scenario, severe but
plausible downside scenario, and a reverse stress test scenario.
The Committee considered whether the key assumptions used
were appropriate, including the assumed mitigating actions in
the downside scenario. Consideration was given to the current
level of macro-economic uncertainty as well as the impact
of climate change. Particular consideration was given to the
impact of the Group’s RCF facility and $45 million of USPP debt
becoming due in the final year of the viability period and the
strong prospects of successful refinancing.
The Committee was
satisfied that assumptions
used were reasonable and it
was appropriate to prepare
the financial statements
on a going concern basis.
It was also satisfied that
the viability statement was
appropriate (see pages 78
to 80).
Carrying value of
provisions
See note 20 to the
Group financial
statements
The Group holds provisions related to restructuring, properties,
warranty claims and tax exposures of £6.2 million. There is
inherent judgement involved in assessing the level of provision
required.
The Committee discussed the key assumptions used in
determining these provisions with management and with PwC to
assure themselves as to the adequacy and appropriateness of
the provisions.
The Committee was
satisfied that the
judgements exercised were
appropriate and that the
provisions were fairly stated
in the annual accounts.
Financial reporting
Key activities of the Committee in the last twelve months
• Reviewed the financial results for the half-year ended 30 June 2021 and recommendation of results announcement.
• Reviewed the financial results for the full-year ended 31 December 2021, results announcement, and the Annual
Report and Accounts.
• Reviewed the significant judgements and estimates that impact the financial statements.
• Considered the appropriateness of accounting policies.
Tyman plc106 Annual Report and Accounts 2021
Audit and Risk Committee report continued
Area of focus Audit and Risk Committee review Conclusions
Alternative
performance
measures (“APMs”)
and exceptional
items
Further information on
APMs can be found on
pages 203 to 208 and
on exceptional items
in note 6 to the Group
financial statements
The Group uses a number of alternative performance measures
and draws out certain significant, non-recurring items as
exceptional. The selection of APMs and classification of items as
exceptional is judgemental.
The Committee considered the use of these measures as part
of its assessment of whether the Annual Report is fair, balanced
and understandable. This included considering whether the
APMs are useful to users and present a faithful representation
of underlying trading, the consistency of APMs used and their
calculation, and the disclosure of reconciliations to GAAP
numbers.
The Committee was
satisfied that APMs are
appropriate and provide
useful information to users,
changes made to the
definitions were appropriate
and transparent, and these
are clearly reconciled to
the nearest GAAP number
where appropriate.
The Committee considered
that the items drawn
out as exceptional were
in accordance with the
Group’s accounting policy
and disclosures in the
financial statements were
appropriate.
Carrying value of
accounts receivable
See note 14 to the
Group financial
statements
IFRS 9 requires the Group to estimate the expected credit
loss on receivables, taking into account past experience and
expectations about future losses. The expected credit loss rates
are a significant estimate made by management.
The Committee reviewed the assumptions used by management
in determining the expected credit loss rates. This included
reviewing the ageing of accounts receivable and historical
write-offs, and considering the current and forecast market
environment in each of the key markets the Group operates
in. Particular consideration was given to the ongoing impact of
COVID-19 on expected credit loss risks.
The Committee was
satisfied that the expected
credit loss rates used
were appropriate and the
resultant carrying value
of trade receivables was
reasonable.
Carrying value of
inventory
See note 13 to the
Group financial
statements
Inventories are stated at the lower of cost and net realisable value,
with due allowance for excess, obsolete or slow-moving items.
Management exercises judgement in assessing net realisable value
and provisions required for slow-moving and obsolete inventory. In
addition, the Group uses standard costing to value inventory, with
a proportion of purchase price and manufacturing variances being
capitalised in order to revalue inventory to actual cost. In 2021, as
a result of significant cost inflation in the second half of the year,
the variances between standard and actual cost are more significant
than normal. The allocation of variances to inventory on hand
requires some estimation, including the calculation of stock turn.
The Committee considered the basis for the provisions made by
management for obsolete and slow-moving inventory, which included
consideration of the ageing of inventory, assessments of future
demand, market conditions and new product development initiatives.
The Committee also considered the basis on which the purchase
price and manufacturing variances were capitalised into inventory.
The Committee was
satisfied that the inventory
valuation was consistent
with the Group’s accounting
policy and previous practice
and that the resultant
valuation was reasonable.
Taxation
See note 8 to the
Group financial
statements
Taxation represents a significant cost to Tyman in both cash and
accounting terms. The Group is exposed to differing tax regimes
and risks which affect both the carrying values of tax balances
(including deferred tax) and the resultant income statement
charges. There is an element of judgement in the assessment
of uncertain tax positions and in the calculation of deferred tax
balances together with the associated probability of crystallisation.
The Committee reviewed the tax charge for the half-year
and the full-year, including the underlying tax effect, the
appropriateness of and movement in provisions for uncertain tax
positions recognised and the risks associated with them.
The Committee was
satisfied that the taxation
accounting and disclosures,
including provisions for
uncertain tax positions are
appropriate.
Following discussions with the auditors and considerations set out above, the Committee was satisfied that the financial
statements dealt appropriately with each of the areas of significant judgement. PwC also reported to the Committee on
any misstatements that they had found in the course of their work and confirmed that no material amounts remained
unadjusted.
Annual Report and Accounts 2021 Tyman plc 107
GOVERNANCE
Internal control
The Committee receives regular reports throughout the year
to assure itself that the Group’s internal control systems are
robust, including reports from the Chief Financial Officer,
Group Financial Controller and the Group Head of Internal
Audit and Risk Management. The Committee reviewed the
bi-annual representations of compliance with the Group’s
Accounting Policies and Procedures and considered the
impact of exceptions noted on the effectiveness of the
Group’s internal controls.
The Committee has also monitored updates in corporate
governance and financial reporting requirements including
those recommendations made by BEIS on corporate reform
and concluded that appropriate steps have taken place to
position the Group for these changes. During the year, a
Group Minimum Standards of Internal Control framework
was established, and groupwide training sessions were
conducted. These sessions included emphasising the
importance of a strong control environment as well as fraud
awareness. A more comprehensive controls self-assessment
process has been developed in line with this framework and
this will be adopted in 2022.
As outlined in the risk management section of this report
on pages 84 to 91, risk management is embedded in
many aspects of the Group’s leadership model where key
areas of risk are inherently considered. Key governance
mechanisms for the management of risk include the
Executive Committee, the Finance Leadership Team, the
strategic planning process, budgeting and forecasting and
the Business Performance Review (“BPR”) process.
The BPR process, which is undertaken every month for each
division is chaired by the Group Chief Executive Officer and
covers key aspects of strategic, financial, operational and
compliance risks. This includes proactive monitoring of key
actions from month to month, safety performance, business
ethics, legal matters, financial performance, progress on
strategic priorities, organisational developments and risk
watchlist items. The BPR meetings include a review of
organisational capabilities and twice a year include a deep
dive into divisional risk management. The key points arising
from this process are then reviewed by the Board.
The Committee confirms it has carried out its annual review
of the effectiveness of the system of internal control as
operated throughout the year ended 31 December 2021
and up to the date of approval of the Annual Report and
Accounts. The Committee also confirms that no significant
failings or weaknesses were identified from that review.
Internal audit and internal audit effectiveness
Having appointed the Group Head of Internal Audit and
Risk Management in 2020, I am pleased to report that good
progress has been made in enhancing the Group internal
audit and risk management function.
The internal audit function, led by the Group Head of
Internal Audit and Risk Management is now well established
and has a clear plan in place to further develop an
increasingly risk-based internal audit programme.
Risk and control
Key activities of the Committee in the last
twelve months
Risk
• Reviewed the risk management framework, the
Group’s risk philosophy, risk appetite and the
principal risks and uncertainties facing the Group,
including how those risks evolved during the year.
• Participated in risk management discussions
and received presentations on the Group’s risk
management process and key developments
underway or planned for the year ahead.
Going concern and viability
• Reviewed the going concern and viability
assessments prepared by management, including key
assumptions.
• Reviewed the viability statement and
recommendation of approval to the Board.
Internal control and internal audit
• Assessed the effectiveness of Group’s systems of
internal control and risk management.
• Reviewed the divisional internal control
representations.
• Approved the Group Internal Audit Charter.
• Reviewed the key developments in Internal Audit
including the IIA Code of Practice.
• Approved the internal audit plan for the year.
• Reviewed the internal audit reports,
recommendations and mitigating plans.
• Assessed the effectiveness of internal audit.
The Group’s assessment of its principal risks and
uncertainties is set out on pages 84 to 91. The key
elements of risk management and internal controls are
detailed on page 86 of the risk management section of
this Annual Report.
Fair, balanced, and understandable assessment
In accordance with the Corporate Governance Code, the
Committee reviewed the Annual Report and was able to
confirm to the Board that the Committee considered the
Annual Report and Accounts, taken as a whole, was fair,
balanced and understandable and provided the information
necessary for shareholders to assess the Group’s
performance, business model and strategy.
Risk
During the year, the Committee promoted continuous
improvement in the Group’s risk management system,
which included reviewing the risk management structure
and approach, the Group’s risk appetite and principal risks
and uncertainties facing the Group.
In line with the priorities set out in the 2020 Annual Report,
the Committee has considered the Group’s cyber and
emerging risks.
The Committee confirmed to the Board it had carried out a
robust assessment of the principal risks, including emerging
risks and developments throughout the year.
Tyman plc108 Annual Report and Accounts 2021
Audit and Risk Committee report continued
Throughout the year, the Committee has reviewed progress
in relation to the further development of the Group’s risk
framework including its risk philosophy and appetite, an
assessment of risk management maturity and proposals
for further enhancing and embedding enterprise risk
management. The Committee has also reviewed and
approved the ongoing enhancements to the internal audit
function and its key activities including the Internal Audit
Charter and the status of actions relating to the IIA Code of
Practice.
In the context of appointing the Group Head of Internal
Audit and Risk Management, the Committee has reviewed
the resourcing of the internal audit function more broadly.
The Committee has considered the current co-sourcing
relationship with BDO, led by the Group Head of Internal
Audit and Risk Management. The relationship with BDO has
operated well throughout 2021 and a decision not to tender
this co-sourcing arrangement was made.
The Group Head of Internal Audit and Risk Management has
attended every meeting of the Audit and Risk Committee.
He has had ongoing contact with the Audit and Risk
Committee throughout the year, including meetings without
management being present. The Group Head of Internal
Audit and Risk has monthly meetings with the Chair of the
Committee and has had access to the Chair of the Board as
required.
The 2021 internal audit plan was completed, and the
number of audits has increased considerably from 2020 as
the impact of COVID-19 and government restrictions eased
across the Group. In 2021, there were a number of reviews
in the UK, US, Mexico and China and all but one internal
audit was completed on-site.
The Committee reviewed the activity of internal audit
throughout the year, including progress in delivering
the 2021 audit plan, audit reports, completion of audit
recommendations and approved the 2022 internal audit
plan. The focus of internal audit in the year has been on
a range of risk areas and included reviews of key Group
policies, financial and IT controls, payroll, and business
continuity plans. Regular review and tracking of internal
audit recommendations takes place throughout the year,
complemented by follow-up audits as appropriate based
on risk.
The Audit and Risk Committee reviewed the effectiveness
of internal audit for the financial year with input from
management and concluded the function had performed
well and had been effective in discharging its duties and
resources appropriately.
Moving into 2022, the Committee looks forward to
supporting the Group Head of Internal Audit and Risk
Management in further establishing the Group internal audit
function and moving the risk and assurance agenda to the
next stage in its development.
External audit
Key activities of the Committee in the last
twelve months
• Reviewed and approved PwC’s terms of engagement
and audit plan, including audit fees, scope, risk
assessment and the threshold levels of materiality for
the Group financial statements.
• Considered the independence and objectivity of PwC.
• Reviewed PwC’s report following completion of the
audit and the management representation letter.
• Reviewed the effectiveness and independence of PwC.
• Reviewed and approved the policy on the provision of
non-audit services by the external auditors.
• Oversaw the audit tender process, including
discussions with management, meetings with
tendering firms, review of proposal documents and
presentations.
• Recommended to the Board that Deloitte be
appointed to succeed PwC as auditors at the
2022 AGM.
The Committee is responsible for managing the
relationship with and the performance of the external
auditors, which includes making recommendations
in respect of the appointment, reappointment and, if
necessary, removal of the external auditors.
Appointment of the external auditors
PwC were appointed the Group’s auditors in December 2011
and have therefore served as the Group’s auditors since the
conclusion of the 2012 AGM. Richard Porter has been the
Group audit partner since 2017.
In line with the provisions of the CMA Order, during 2021,
the Audit and Risk Committee oversaw a formal tender
process for external audit services for the financial year
ending 31 December 2022 onwards. Following a robust
process, the Board appointed Deloitte to succeed PwC
and a resolution will be put forward to appoint Deloitte
as external auditor at the forthcoming 2022 AGM. The
process undertaken to reach this decision has been outlined
below. The Committee would like to thank each of the
participating firms.
Annual Report and Accounts 2021 Tyman plc 109
GOVERNANCE
A selection panel was appointed to evaluate the
performance of firms and prepare a report and
recommendation to the Audit and Risk Committee.
The panel was led by the Audit and Risk Committee
Chair and members included the Chief Financial
Officer and Group Financial Controller.
Based on the assessment of the performance of the
firms through the process against the evaluation
criteria, the selection panel recommended two firms
to the Audit and Risk Committee, with a preference
for Deloitte. The Committee unanimously agreed
and put this forward to the Board, who endorsed this
recommendation.
Introductory discussions were held by management
with a selection of top 10 audit firms, including the
incumbent auditor, to understand their appetite for
involvement in the tender process. Management
considered various factors including independence,
audit quality, geographic coverage, industry
experience, FTSE 250 experience and capacity
to deliver when determining which firms to invite
to tender. Consideration was given to ensuring
firms outside the big four had equal opportunity to
participate.
At least two references were requested for the
Group Partner of each participating firm, and one
reference for other senior team members.
The two shortlisted firms were invited to give an
oral presentation and participate in a Q&A session.
Each presentation was attended by the selection
panel as well as a further member of the Audit
and Risk Committee to provide an unbiased view
because they had no previous involvement in the
process. The presentations for each of the firms
were assessed against the evaluation criteria
and a feedback session was held to discuss the
performance of each firm.
An external audit proposal document was received
from each of the three participating firms. This
was reviewed by the selection panel against the
evaluation criteria and requirements set out in the
Request For Proposal. A selection panel meeting was
held to discuss feedback on the proposal documents
and management meetings, with two firms being
selected to progress to the oral presentation stage.
External audit tender process
Appointment of selection panel
Expressions of interest
Recommendation and Board decision
References
Presentation and Q&A Proposal documents
Tyman plc110 Annual Report and Accounts 2021
Audit and Risk Committee report continued
The main objectives of the tender process, as well
as transparent evaluation criteria with importance
weighting against which each firm was to be
assessed, were agreed by the selection panel at
the planning stage. A scorecard with more detailed
questions aligned to the evaluation criteria was also
prepared.
The criteria used to evaluate firms throughout the
process was as follows:
• Audit quality;
• Audit approach and service;
• Behaviour throughout the proposal process and
cultural fit;
• Capability and experience of lead partner and
team; and
• Value for money.
A formal Request for Proposal was issued to each of
the three firms that were formally invited to tender,
being two big-four firms and one mid-tier firm.
The Request for Proposal included an overview of
Tyman plc, details of the planned tender process,
the evaluation criteria, a detailed timetable and
guidelines for expected content and length of the
proposal documents and oral presentations.
Results of the audit tender process were announced
following the Board’s decision. Detailed feedback was
captured and provided to each of the participating
firms to explain the decision reached.
Deloitte has shadowed PwC during the 2021 year
end audit. They attended key meetings through the
audit process and reviewed management papers
on key judgements. Deloitte, during their transition
period, will also have full access to both Group and
divisional management to assist with any queries
they have to facilitate a smooth transition. A review
of Deloitte’s independence has been completed
in advance of the transition and the Committee
is satisfied with Deloitte’s independence. The
Committee will monitor the transition to ensure it is
effective.
All participating firms were given access to the
data room, which included a substantial amount of
information to assist firms with the production of
their tender proposal. Participating firms were able
to request further information, and any additional
information requested was provided to all firms to
ensure equality in the process.
Firms were given the opportunity to meet with
key members of the head office and divisional
management and Committee members to allow
them to ask questions to ensure they had a deep
understanding of the business, risks, controls
and processes and priorities, to assist them in
preparing their proposal documents. Each member
of management was provided with a copy of the
scorecard and was asked to provide feedback on the
firms following each of the meetings.
Request for Proposal
Transition
Objectives and evaluation criteria
Announcement and feedback
Data room
Management meetings
Annual Report and Accounts 2021 Tyman plc 111
GOVERNANCE
Governance and Committee
effectiveness
Key activities of the Committee in the last
twelve months
• Reviewed the Committee’s terms of reference and
agreement of its objectives.
• Reviewed and evaluated the Committee’s
effectiveness.
• Reviewed and considered the Group’s compliance
with the UK Corporate Governance Code as well as
considering potential developments being considered
by BEIS in relation to the recommendations made in
the Brydon Report.
• Reviewed compliance with non-financial reporting
practices and procedures.
• Reviewed the Group’s consolidated Annual Report
and Accounts for the financial year ended 2021 and
reported to the Board that they were fair, balanced
and understandable.
• Recommended that the Board approve the half-year
and full-year results announcements.
Governance
The Committee assessed the Group’s compliance with the
revised UK Corporate Governance Code, which included
receiving a report from management outlining how each of
the requirements of the Code had been addressed.
The Committee also reviewed the Group’s non-financial
reporting practices and disclosures and assessed compliance
with the s172 requirements. This included review of the
sustainability report, stakeholder engagement disclosures and
s172(1) statement.
The Committee is satisfied that the Group has complied
with the UK Corporate Governance Code 2018 and non-
financial reporting regulations.
Committee effectiveness
The Committee effectiveness was included as part of the
overall externally-facilitated effectiveness evaluation of the
Board and its committees and the Committee was found
to be effective. The report on the Board and Committees
evaluation can be found on pages 98 and 99.
External audit effectiveness
A key responsibility of the Committee is ensuring the
continued effectiveness of the external audit.
The Committee discussed feedback on the audit process
with Group management and with PwC during private
sessions as well as feedback from the audit tender process
and was satisfied there were sound working relationships
between the Group’s finance teams and the audit team.
Having considered feedback, the robustness and quality
of the work performed and the contents of the reports on
audit findings the Committee was satisfied that PwC has
continued to provide an effective audit.
Auditors’ independence and objectivity
The Committee recognises the importance of auditors’
independence and receives reports from PwC during the
year in respect of their compliance with the fundamental
principles of objectivity, integrity and professional
behaviour, including independence. PwC has provided
their annual independence letter to the Audit ad Risk
Committee in March 2022. The Committee reviews the
policy on auditors’ independence and non-audit services
annually and takes into consideration the nature, scope
and appropriateness of non-audit services supplied by
the external auditors, while taking into account that
the provision of certain non-audit services can be most
effectively provided by the Group’s external auditors.
The policy on auditors’ independence and non-audit
services was reviewed and approved during the year, with
no significant changes made. A copy of this policy may be
found at the Group’s website.
The Committee was satisfied with the external auditors’
independence and objectivity.
Audit and non-audit fees
The Committee regularly reviews the audit fees to ensure
these are appropriate to enable an effective and high-
quality audit to be conducted. The fee for the 2021 Group
audit is £1.0 million (2020: £0.9 million). The increase in
the fee is primarily driven by an increase in audit market
rates and the impact of additional work required to satisfy
new auditing standards. Further information in respect of
the audit fee can be found in note 4 to the Group financial
statements.
During 2021, non-audit fees paid to PwC were 5.1%
(2020: 6.3%) of the annual Group audit fee. This work
related entirely to the provision of compliance or regulatory
services customarily performed by external auditors,
including the interim review which is classed as a non-
audit service. Approval of the Audit and Risk Committee is
required for all non-audit services.
The Committee is satisfied that the provision of such
services does not in any way prejudice the objectivity and
independence of the external auditors.
Tyman plc112 Annual Report and Accounts 2021
Audit and Risk Committee report continued
Audit and Risk Committee priorities
for 2022
The priorities for the Committee for 2022 are set out below:
− Planning for and responding to forthcoming changes in
corporate governance, financial reporting requirements
and audit reform, including consideration of
recommendations made by BEIS on corporate reform.
− Review of the groupwide risk management processes,
including the principal and emerging risks facing the
Group. This will include tracking progress in cyber
security risk management.
− Review of the Group’s climate change and sustainability
related disclosures.
− Provide oversight and support to ensure the successful
transition of the external audit from PwC to Deloitte.
The results of the work on these priorities will be reported
in the 2022 Annual Report.
On behalf of the Audit and Risk Committee
Helen Clatworthy
Chair, Audit and Risk Committee
3 March 2022
Annual Report and Accounts 2021 Tyman plc 113
GOVERNANCE
The Committee is mindful of the Group’s commitment
to creating value for our wider stakeholder groups.”
Paul Withers
Chair, Remuneration Committee
Dear Shareholder
On behalf of the Board, I am delighted to present the report
of the Company’s Remuneration Committee for the year
ended 31 December 2021.
As in previous years, this report is set out in three sections:
• this Annual statement, which summarises the key
decisions made by the Remuneration Committee during
the year and how they were arrived at;
• our 2021 Remuneration policy, which was approved
by shareholders at the 2021 Annual General Meeting
(“AGM”); and
• the Annual report on Directors’ remuneration, which
describes the implementation of our Remuneration
Policy in 2021, and how we intend to implement our
Policy this year. This section of the report will be put to
shareholders, for an advisory vote, at the 2022 AGM
(pages 125 to 137).
Changes to the Board and Remuneration
Committee composition
David Randich, who is based in the US, joined the Board
as a Non-executive Director and became a member of the
Remuneration, Nomination and Audit and Risk Committees
with effect from 15 December 2021. David’s fee is in line
with the Policy for Non-executive Directors and includes
the payment of an annual travel supplement to reflect the
additional time commitment of the intercontinental travel
required to fulfil this role.
Performance and reward in 2021
As outlined in the Chair’s Statement and Chief Executive
Officer’s Review on pages 30 to 33, the Group’s performance
in 2021 was strong against both 2020 and 2019, with good
market momentum and share gains delivering growth in
spite of well-publicised supply chain challenges, labour
constraints and input cost inflation. Highlights included:
• LFL revenue growth of 17% against 2020 and 11%
against 2019;
• LFL adjusted operating profit up 16% against 2020 and
11% against 2019;
• Adjusted EPS growth of 18% against 2020 and 17%
against 2019;
• ROCE improvement to 14.5% from 12.3% in 2020 and
12.0% in 2019;
• strong market share gains in core International markets
and further net customer wins in North America; and
• good progress on our sustainability roadmap, with
strong growth in revenue from products that positively
impact SDGs in-use, and a reduction in water usage and
operational carbon emissions.
The Committee is mindful of the Group’s commitment
to creating value for our wider stakeholder groups. This
commitment has been very evident throughout the
COVID-19 pandemic, with efforts to ensure the health and
safety of our employees, their families and communities,
cancellation of the 2020 management bonus scheme, and
voluntary Executive Director salary reductions during 2020.
In 2021, good progress has been made with embedding
the Group’s culture through the deployment of the purpose,
values and Code of Business Ethics. The Group became a
UK Real Living Wage employer from 1 January 2022 and
continues to enhance its stakeholder engagement activities.
The Group’s Chief Financial Officer received a 1.5% salary
increase for 2021 which was in line with the average
increase for the Group’s UK, USA and Europe-based
employees. The Chief Executive was awarded a 4.5%
increase in line with other high performers across the
Group, and which represented the first of a planned two-
stage increase to reflect her strong performance in role and
to start to align her total remuneration more closely with
comparable levels for other CEOs of companies of similar
scale and complexity to Tyman.
Having cancelled the management bonus scheme in
2020, the Committee reinstated this in 2021. The strong
performance in the year delivered adjusted profit before
tax in excess of the target performance level. Due to higher
than planned working capital as a result of significant cost
inflation and the need to protect supply chain resilience
in light of current industry-wide challenges, both cash
conversion and cash generation were below target, with
cash generation slightly above threshold. This resulted in
a bonus outturn of 73.3% of maximum and the Executive
Directors will consequently receive bonuses of 110.0% of
Remuneration report
Tyman plc114 Annual Report and Accounts 2021
salary for the CEO and 91.7% of salary for the CFO. Further
details, including bonus targets and outcomes, are included
on page 128.
The vesting period for the LTIP awarded in 2019 ended
in 2021. This award was subject to a single performance
condition of cumulative three-year adjusted EPS of between
95.0p (25% vesting) and 112.0p (100% vesting) and, for
the Executive Directors, included additional discretionary
underpins based on three-year relative TSR and 2021 ROCE.
While three-year TSR was 53.6%, outperforming the FTSE
All-Share and FTSE SmallCap indices over that period, and
the Group’s target ROCE was achieved for the first time in
2021, actual cumulative underlying EPS for the three years,
2019 to 2021, was 86.76 pence. This was below threshold
and consequently the 2019 LTIP will lapse in full. Further
details are included on page 128.
Overall, the Committee is satisfied that pay outcomes
in respect of the year ended 31 December 2021 are
appropriate and accordingly we have not applied any
discretion to this year’s incentive outcomes.
Implementation of Policy for 2022
Following a consultation with our largest shareholders,
we submitted our Remuneration Policy for approval at
the 2021 AGM, receiving 90.31% of votes in favour. The
Committee was pleased to gain strong support for the
changes proposed, which included the commitment to align
the CEO’s pension contribution to the level available to the
wider UK workforce from 1 January 2022, an increase to
both the maximum annual bonus and LTIP opportunity for
the CEO from 125% to 150% of salary, and the removal of
the 200% of salary exceptional award limit under the LTIP.
The Committee also set out its intention to align the total
remuneration of the CEO more closely with comparable
levels for CEOs of companies of similar scale and complexity
to Tyman through a phased increase to her salary over the
course of two years: a 4.5% increase to £477,500 which
took effect from 1 January 2021, and a further increase to
£550,000 from 1 January 2022, subject to continued good
performance.
The Committee reviewed the appropriateness of the second
salary increase in the context of the Group’s performance
in 2021 and outcomes for our wider stakeholders. Having
reflected on the Group’s robust performance in the year
and the strong leadership Jo has continued to exhibit in
delivering the strategy and fostering positive outcomes for
the Group’s stakeholders, the Committee has unanimously
approved implementation of the second planned salary
increase with effect from 1 January 2022. The CFO’s salary
was increased by 4.1%, in line with the UK workforce
average.
The CEO will receive cash in lieu of pension of 7% of
salary from 1 January 2022, reduced from 15% in line
with our Policy. The CFO will continue to receive cash in
lieu amounting to 7% of salary. This contribution level is
aligned with that available to the wider UK workforce. The
maximum bonus opportunity and LTIP award levels will
remain at 150% of salary for the CEO and 125% for the
CFO. Further details on each element of remuneration,
including details of performance measures and targets, are
included on page 135.
Closing remarks
The Committee remains committed to keeping under review
the appropriateness of the remuneration arrangements for
Tyman in the context of its strategy and culture, as well as
wider market developments. The Committee looks forward
to your continued support at the 2022 AGM, where I will
be happy to answer questions or receive feedback on any
aspect of the Group’s remuneration.
Paul Withers
Chair, Remuneration Committee
3 March 2022
Annual Report and Accounts 2021 Tyman plc 115
GOVERNANCE
Remuneration policy report
This section sets out the Remuneration policy for Executive and Non-executive Directors that was approved by shareholders
at the 2021 AGM, and which shall be effective for a period of up to three years from that date (i.e. until the Group’s 2024
AGM). Minor amendments have been made to the drafting of the Remuneration policy report from the version approved
by shareholders in 2021 (which can be found in the 2020 Annual Report) including: (i) the data used in the pay-for-
performance scenarios; (ii) page references; and (iii) the section on Non-executive Director letters of appointment, to
reflect changes in Board composition during 2021.
The 2018 UK Corporate Governance Code sets out principles against which the Committee should determine the Policy for
executives. A summary of these principles, and how the proposed Policy reflects these, is set out below:
Principle Our approach
Clarity We remain committed to transparent Director pay decisions, with the rationale for decisions,
awards and in particular, incentive targets and outcomes, published in detail.
Simplicity Our Policy consists of fixed remuneration, annual and long-term incentive components only.
The share incentive and bonus schemes were designed with simplicity and shareholder
preference in mind.
Risk The combination of reward for short-term business performance (50% deferred into shares
for three years) and long-term, sustainable earnings performance and returns ensures
the incentives drive the right behaviours for the Group, its shareholders, employees and
customers.
Formulaic outcomes produced by the performance conditions can be overridden where,
in the Committee’s opinion, they do not reflect the true performance of the business or
individual Directors’ contributions.
Furthermore, all variable pay awards are subject to malus and clawback provisions.
Predictability There are defined threshold and maximum pay scenarios, which we have disclosed on page
124.
Proportionality There is a clear and direct link between Group performance and individual rewards under the
annual bonus and LTIP. No variable remuneration is payable for performance below a defined
threshold level.
Alignment to culture The Remuneration Committee has worked hard to formulate a Policy and incentive plans
that support a performance culture, driving sustainable growth while also rewarding
appropriate short-term business performance, without encouraging excessive risk taking or
unsustainable Company performance.
Financial and non-financial incentive measures reflect and support business strategy. Our
assessment of annual performance considers both what is delivered and how the Executive
Directors have delivered it.
Tyman plc116 Annual Report and Accounts 2021
Remuneration report continued
Link to strategy Operation Maximum opportunity Metrics
Base salary
To pay Executive Directors
at a level commensurate
with their contribution
to the Company and
appropriately based on
skill, experience and
performance achieved.
The level of salary paid
is considered appropriate
for motivation and
retention of the calibre
of executive required to
ensure the successful
formation and delivery of
the Group’s strategy and
the management of its
business in the international
environment in which it
operates.
Base salary is paid monthly
in cash.
The Executive Directors’
salaries are set having
regard to typical pay levels
at companies of a similar
size, internationality and
complexity.
Salaries are normally
reviewed annually and are
typically effective from 1
January each year. When
reviewing salaries, the
Committee considers all
relevant factors including:
• prevailing market and
economic conditions;
• scope and
responsibilities of
the role;
• the level of increase for
other roles within the
business; and
• Company and individual
performance.
There is no prescribed
maximum salary.
Salary increases will
normally be broadly in line
with the general annual
salary increase received
by Group employees in the
relevant Director’s country
of residence.
The Committee retains the
discretion to award larger
increases, for example,
to reflect a change in
role, development and
performance of a Director
or reflect an increase in
complexity of the Group.
While there are no
performance targets
attached to the payment
of salary, Company and
individual performance are
factors considered in the
salary review process.
Benefits
To provide a range of
market competitive benefits
to facilitate the recruitment
of high calibre individuals
and encourage their
retention.
Executive Directors are
eligible for a range of
benefits that may include:
• life assurance cover;
• critical illness cover;
• private medical and
dental cover;
• car allowance; and
• professional tax and
financial advice.
Additional benefits may
also be provided in certain
circumstances which may
include relocation and
associated expenses.
Other benefits may be
offered if considered
appropriate, reasonable
and necessary by the
Committee and any
reasonable business
related expenses can be
reimbursed (including tax
thereon if determined to be
a taxable benefit).
Executive Directors are
eligible for other benefits
introduced for the wider
workforce on broadly
similar terms.
No overall maximum
level has been set since
some costs may change
in accordance with market
conditions.
Benefits are reviewed
by the Committee on an
annual basis and set at an
appropriate market rate.
No performance metrics
apply.
Annual Report and Accounts 2021 Tyman plc 117
GOVERNANCE
Link to strategy Operation Maximum opportunity Metrics
Pension
To provide a market-
competitive benefit for
retirement, to facilitate the
recruitment of high calibre
individuals and encourage
their retention.
Executive Directors are
eligible to participate
in the relevant pension
arrangements offered by
the Group or to receive a
cash salary supplement in
lieu of pension entitlement.
The Committee may
amend the form of any
Executive Director’s
pension arrangements
in response to changes
in legislation or similar
developments, provided
that the amendment does
not materially increase the
cost to the Company of the
pension provision.
The maximum pension
allowance for the current
Chief Executive is 15% of
base salary. This will be
aligned with the majority
of the wider workforce with
effect from 1 January 2022.
For all other and any
new Executive Directors,
the maximum pension
contribution/allowance will
be in line with the majority
of the wider workforce.
Currently, this is 7% of
base salary.
No performance metrics
apply.
Annual bonus
To incentivise and reward
achievement of annual
goals consistent with the
strategic direction of the
business.
To create further alignment
with shareholders’ interests
via the delivery and
retention of deferred equity.
Rewards annual
performance against targets
set and assessed by the
Committee.
Any bonus payable under
the annual bonus scheme is
paid 50% in cash and 50%
in shares deferred for three
years under the DSBP and
is not pensionable.
Dividend equivalents
may accrue on deferred
bonus during the deferral
period, at the Committee’s
discretion on vested
deferred bonus shares at
the time of vesting.
Three-year recovery and
withholding provisions
apply.
The Committee has
discretion to override
formulaic outcomes (under
both financial and non-
financial metrics) if deemed
appropriate.
The maximum annual
bonus opportunity for the
Executive Directors is 150%
of salary.
Performance metrics are
selected annually based
on the objectives of the
business at the time,
with the majority of the
bonus linked to financial
metrics. Annual financial
performance targets have
historically been focused on
profit and cash generation
metrics.
Performance below
threshold results in zero
payment. Payments
normally rise from 0% to
100% of the maximum
opportunity for performance
between the threshold and
maximum targets.
Tyman plc118 Annual Report and Accounts 2021
Remuneration report continued
Link to strategy Operation Maximum opportunity Metrics
Long Term Incentive Plan
To align the interests
of senior executives to
those of shareholders in
developing the long-term
growth of the business and
execution and delivery of
the Group’s strategy.
To facilitate share
ownership.
Consists of awards of
shares that vest subject
to the achievement of
performance conditions.
Participation and individual
award levels will be
determined at the discretion
of the Committee and
within the approved limits
of the policy.
The Committee reviews the
LTIP performance measures
in advance of each grant
to ensure their ongoing
appropriateness and,
where material changes to
performance measures are
proposed, it consults with
shareholders.
Awards made under the
LTIP are non-pensionable
and will normally require
Executive Directors to
retain any awards that vest,
net of tax, (whether held
as shares or options) for
a minimum of two further
years from the date of
vesting.
Three-year recovery and
withholding provisions
apply.
Dividend equivalents
may accrue during the
performance period to the
extent that awards vest.
The Committee has
discretion to override
formulaic outcomes (under
both financial and non-
financial metrics) if deemed
appropriate.
150% of salary. Awards are subject to the
achievement of defined
targets measured over
three financial years,
starting at the beginning of
the financial year in which
the award is made.
In respect of each
performance measure,
performance below
threshold results in zero
vesting. The starting point
for the vesting of each
performance element will
be no higher than 25% of
the maximum opportunity
and will rise in a straight-
line basis to 100% of
maximum opportunity
for attainment of levels
of performance between
threshold and maximum.
Awards will be granted
subject to performance
conditions that measure the
long-term success of the
Company. The Committee
may introduce or reweight
performance measures
so that they are directly
aligned with the Company’s
strategic objectives for each
performance period.
Annual Report and Accounts 2021 Tyman plc 119
GOVERNANCE
Link to strategy Operation Maximum opportunity Metrics
Shareholding requirements
To motivate and reward
the creation of long-term
shareholder value. To
ensure alignment with
shareholders’ interests.
Executive Directors are
required to retain a
minimum shareholding
equivalent to 200% of
basic salary, normally to be
achieved within five years
of appointment.
Executive Directors are
required to retain at least
50% of shares vesting
(after any disposals
necessary to pay associated
tax charges) or such
higher percentage (as
the Committee may
determine in light of the
extent to which the holding
requirement has been met)
under both the Deferred
Share Bonus Plan and the
LTIP until the minimum
shareholding is reached.
No performance metrics
apply.
Post-employment shareholding requirement
To further strengthen
alignment with
shareholders’ interests in
the long term.
Executive Directors
are required to retain
a minimum number of
shares for two years post-
employment equivalent
to the lower of 100% of
basic salary or the actual
shareholding at the time of
departure. This is enforced
by having such shares
deposited in accounts that
require the Company’s
approval for their release.
Shares purchased by
Executive Directors and
shares under any buy-out
awards are not included
for the purpose of post-
employment shareholding.
No performance metrics
apply.
Tyman plc120 Annual Report and Accounts 2021
Remuneration report continued
Link to strategy Operation Maximum opportunity Metrics
Chair and Non-executive Director fees
To attract and retain high
calibre Non-executive
Directors.
Non-executive Director fees
are set by the Board.
Fees are normally
reviewed annually, but
not necessarily increased.
Reviews take into account
the time commitment,
responsibilities and fees
paid by companies of a
similar size and complexity.
Fee increases, if applicable,
for Non-executive Directors,
take effect from 1 January.
Additional fees may be
paid to Chairs of Board
Committees, to the Senior
Independent Director and to
the Non-executive Director
designated as being
responsible for employee
engagement.
If there is a temporary
yet material increase in
the time commitments for
Non-executive Directors,
the Board may pay extra
fees on a pro rata basis to
recognise the additional
workload.
No eligibility to receive
bonuses or retirement
benefits or to participate
in the Group’s long-term
incentive plans or employee
share plans.
Any reasonable business
related expenses can be
reimbursed (including tax
thereon if determined to be
a taxable benefit).
This may include a travel
allowance to reflect the
additional time commitment
of intercontinental travel
required of the Non-
executive Directors, based
on their home location and
the location of the Board
meeting.
Aggregate annual fees
to Directors are limited
to £500,000 under the
Company’s Articles of
Association.
No performance metrics
apply.
Annual Report and Accounts 2021 Tyman plc 121
GOVERNANCE
Notes to the Remuneration policy table
1. Recovery and withholding provisions may be applied
to LTIP and DSBP awards in the circumstances of a
material misstatement, gross misconduct, or a material
misjudgement of the performance of the Company.
2. For the avoidance of doubt, by approval of the policy,
authority has been given to the Company to honour
any commitments entered into with current or former
Directors that have been disclosed to shareholders in
previous Directors’ remuneration reports. Details of
any payments to former Directors, where required by
relevant regulations, will be set out in the Annual report
on remuneration as they arise.
3. The Remuneration Committee retains discretion over
the operation of certain elements of pay, particularly
variable pay. This includes the overriding discretion to
adjust either the annual bonus or LTIP if the formulaic
outcome is not considered to be reflective of Company
performance. In addition, the Committee may adjust
elements of the plan including, but not limited to:
• participation;
• the timing of the grant and/or payment;
• the size of an award (up to plan limits) and/or
payment;
• discretion relating to the measurement of
performance in the event of a change of control;
• determination of a good leaver for incentive plan
purposes;
• adjustments required in certain circumstances (e.g.
rights issues, corporate restructuring and special
dividends);
• in certain circumstances to grant and/or settle bonus
or LTIP awards in cash. In practice, this will only
be used in exceptional circumstances for Executive
Directors;
• revise any formulaic outcomes of bonus and LTIP
awards downwards or upwards in the event that an
exceptional negative or positive event occurs during
the bonus year in question. However, in practice, the
Committee would not normally expect to revise any
formulaic outcomes upwards; and
• the ability to recognise exceptional events within the
existing performance conditions.
4. Annual bonus performance metrics are determined
at the start of each year based on the key business
priorities for the year. The majority will be based on clear
financial targets that may include, but are not limited to,
profit and cash generation as, when combined, these are
often strong indicators of sustainable growth.
5. LTIP performance metrics are determined at the time
of grant. Performance measures may include measures
of profitability (such as EPS), measures of capital
allocation discipline (such as ROCE), measures linked
to other strategic priorities (such as ESG) and other
measures of long-term success (such as relative TSR).
These measures align with the Company’s goal of value
creation for shareholders through financial growth and
above market returns. Performance against targets may
also be subject to appropriate discretionary underpins.
Executive Directors’ service agreements and
exit payment policy
The service agreements of the Executive Directors provide
for a notice period of no more than twelve months from
either party. On termination of their contract by Tyman, and
during the period of notice, Executive Directors would be
eligible to be paid their salary, pension contributions and
other employment benefits (but not annual bonus or grants
under long-term incentive plans) until the earlier of the
end of the notice period or the Director obtaining full-time
employment, with an obligation on the part of the Director
to mitigate.
Payments will normally be made monthly, although the
Committee retains discretion to agree settlement terms.
These may include a pro rata bonus in respect of the period
worked by the Executive Director up until the date of
termination. Bonuses in the final year of employment may
also be settled in cash. The Committee may pay reasonable
outplacement and legal fees where considered appropriate.
The Committee may pay any statutory entitlements or settle
or compromise claims in connection with a termination of
employment, where considered in the best interests of the
Company.
Executive Directors who are categorised as ‘good leavers’
by the Committee will generally be eligible to receive
outstanding awards under the Executive Share Plans as they
vest in future years. Awards that vest under the LTIP post-
employment will normally be prorated to reflect the fact
that the Executive Director was not employed for the entire
period under measurement. For LTIP awards made after the
2014 AGM, the Committee retains discretion to waive the
post-vesting holding period requirement for good leavers
depending on circumstances. Similar provisions apply in the
event of a change of control.
In the event that an Executive Director is dismissed for
reasons constituting gross misconduct, all unvested awards
under Executive Share Plans lapse and the Committee
retains no discretion in this regard.
Non-executive Directors’ letters of appointment
and shareholding guidelines
The Chair and Non-executive Directors do not have service
agreements but the terms of their appointment, including
the time commitment expected, are recorded in letters of
appointment. Non-executive Directors are employed for
terms of three years’ duration, terminable on a month’s
notice by the Company or the Director. All Non-executive
Directors are required to undertake that they will submit
themselves for re-election at each Annual General Meeting
occurring during their term of office and no Non-executive
Director will serve more than three terms of three years
without prior shareholder approval.
Non-executive Directors do not have a minimum
shareholding requirement; however, they are expected
to acquire and retain a shareholding in the Group for the
duration of their appointment.
Tyman plc122 Annual Report and Accounts 2021
Remuneration report continued
Other policies
Recruitment of Executive Directors
The Committee’s general policy on recruitment is that the
structure of remuneration for new Executive Directors
should be in line with the Policy in force at that time, with
base salary set taking into account a range of factors,
including the salary for the incumbent and the candidate’s
relative experience in role. The Committee may agree
that the Company will meet certain relocation and
associated expenses of a new Executive Director, subject to
circumstances.
For a new Executive Director their annual bonus framework
and LTIP awards will be in line with the limits set out in
the Remuneration policy table. Depending on the timing of
the appointment, the Committee may deem it appropriate
to set different annual bonus performance conditions
to the current Executive Directors for the first year of
appointment. An LTIP award can be made shortly following
an appointment (assuming the Company is not in a Closed
Period).
Where individuals are promoted to the Board from within
the Group, their existing share grants or awards will be
allowed to pay out on their original terms.
In certain circumstances, and in order to secure the services
of an outstanding candidate, it may be necessary to make
an award to a new Executive Director to buy out unvested
performance plan share or cash awards forfeited on leaving
their previous employment. Any such awards would be
subject to independent confirmation of the existence,
forfeiture on departure and probability of these historical
awards vesting had the new Executive Director remained
in post. In doing so, the Committee will seek to do no
more than match the fair value of the awards forfeited,
taking account of performance conditions attached to these
awards, the likelihood of those conditions being met and
the proportion of the vesting period remaining. Such awards
may be made using existing arrangements or using the
flexibility provided by the Listing Rules to make awards
without prior shareholder approval.
Any such awards would be made in cash or in shares in
Tyman plc, and may be subject to performance conditions
attached to Tyman.
Appointment of Non-executive Directors
New Non-executive Directors appointed to the Board will
be paid in line with the fee rates applicable at that time.
The Committee will review the fee for a new Chairman
on appointment, taking into account a range of factors,
including the fee for the incumbent and the candidate’s
relative experience in role. All Non-executive Director
appointments will be subject to the same provisions
concerning annual re-election and shareholdings as the then
current Non-executive Directors.
Policy on external appointments
Executive Directors are allowed to accept external
appointments as Non-executive Directors. In respect of
quoted companies, this is limited to one other quoted
company, subject to Board approval, provided that these
are not with competing companies and are not likely to lead
to conflicts of interest. Executive Directors would normally
be allowed to retain the fees paid from these appointments.
Executive Directors may not serve as the Non-executive
Chair of another quoted company.
Other share plans
The Executive Directors may participate in any all-employee
share plans on the same basis as other employees in their
country of residence. The maximum level of participation is
subject to the limits imposed by HMRC (or a lower cap set
by the Company).
Employment conditions elsewhere in the Group
The Remuneration policy for Executive Directors is
consistent with that for other employees save lower levels
of incentive opportunity based on seniority and market
norms. All senior management employees of the Group
participate in bonus arrangements, with all permanent UK,
US and other international employees eligible to participate
in one or more share schemes. Employees in certain other
jurisdictions are also eligible to participate in all-employee
share plans. Although the Committee does not consult
directly with employees on the Directors’ remuneration
policy, the Committee considers any feedback gathered by
management or the designated NED as well as the general
basic salary increase, remuneration arrangements and
employment conditions for the broader employee population
when determining remuneration policy for the Executive
Directors.
Consultation with shareholders and
shareholder bodies
The Committee is committed to regular engagement
with shareholders and governance bodies. In advance of
implementing any material future changes to the Executive
Directors’ remuneration, the Committee would normally
engage in consultation with shareholders.
All Committee members attend the Annual General
Meeting and may also be contacted through the Group’s
registered office or via email to the Group’s Secretariat
(cosec@tymanplc.com) to answer any questions
shareholders or shareholder bodies may have in relation to
the Group’s remuneration policy.
Annual Report and Accounts 2021 Tyman plc 123
GOVERNANCE
Illustrative performance scenarios
The table below sets out performance scenarios for each Executive Director, for the financial year 2022, showing an
indication of the level of remuneration that would be received at minimum, on-target and maximum performance.
Chief Executive Officer
Maximum + 50%
share price growth
Maximum
Target
Minimum
£’000
0 500 1,000 1,500 2,000 2,500
£2,671
£2,259
£1,434
£609
22.8% 30.9% 46.3%
26.9% 36.5% 36.5%
28.8%28.8%42.4%
100%
3,000
Fixed
Annual bonus LTIP
Chief Financial Officer
Maximum + 50%
share price growth
Maximum
Target
Minimum
£’000
0 300 600 900 1,200
1,500
£1,464
£1,249
£818
£388
26.5% 29.4% 44.1%
31.0% 34.5% 34.5%
26.3%26.3%47.4%
100%
Fixed
Annual bonus LTIP
The above charts provide an illustration of the proportion of total remuneration made up of each component of the
remuneration and the value of each component. These assumptions are shown for illustration purposes only.
Four scenarios have been illustrated for each Executive Director:
Minimum performance Fixed remuneration
No annual bonus
No vesting of LTIP awards
On-target performance Fixed remuneration
50% annual bonus payout (CEO: 75.0% of salary, CFO: 62.5% of salary)
50% of LTIP awards vest (CEO: 75.0% of salary, CFO: 62.5% of salary)
Maximum performance Fixed remuneration
100% annual bonus payout (CEO: 150% of salary, CFO: 125% of salary)
100% of LTIP awards vest (CEO: 150% of salary, CFO: 125% of salary)
Maximum + 50% share price growth Fixed remuneration
100% annual bonus payout (CEO: 150% of salary, CFO: 125% of salary)
100% of LTIP awards vest (CEO: 150% of salary, CFO: 125% of salary) and
50% share price growth applied to the LTIP award
The fixed pay element is based on the following elements:
• Base salary is the base salary effective for Jo Hallas and Jason Ashton for the year ending 31 December 2022, as set out
on page 135.
• Benefits are the annualised value of benefits paid in the year ended 31 December 2021, as set out in the table of
Directors’ remuneration on page 127.
• Cash contribution in lieu of pension of 7% of base salary.
Tyman plc124 Annual Report and Accounts 2021
Remuneration report continued
Annual report on Directors’ remuneration
The Annual report on Directors’ remuneration set out below (together with the Remuneration Committee Chair’s annual
statement) will be put to a single advisory shareholder vote at the 2022 AGM. This report sets out the pay outcomes in
respect of the 2021 financial year and explains how the Committee intends to operate in 2022 the Remuneration policy that
was approved by shareholders at the 2021 AGM. The information from the single figures of total remuneration for Directors
on page 127 to the end of the section on payments to past Directors on page 131 has been audited. The remainder of the
Annual report on Directors’ remuneration is unaudited.
Role of the Remuneration Committee
The Remuneration Committee is responsible for setting and implementing the Remuneration policy for the Executive
Directors and the Company’s Chair.
In addition, the Committee considers the remuneration arrangements for all senior executives in the Group and other
relevant senior managers. This ensures a consistent application of Remuneration policy across the Group and aligns all
senior managers’ remuneration to the Group’s strategic objectives. Remuneration received reflects the contribution made
by senior executives to the business, the performance of the Group, the size and complexity of the Group’s operations and
the need to attract, retain and incentivise executives of the highest quality.
Committee membership
The members of the Committee during the year ended 31 December 2021 were as follows:
Remuneration Committee member Appointed to the Committee
Paul Withers (Chair) February 2020 (Chair since end of March 2020)
Nicky Hartery October 2020
Pamela Bingham January 2018
Helen Clatworthy January 2017
David Randich
1
December 2021
1
David Randich was appointed to the Committee when he joined the Board as a Non-executive Director on 15 December 2021.
All members of the Committee are Independent Non-executive Directors. The Chief Executive attends meetings at the
invitation of the Committee Chair. Other individuals such as external advisers may be invited to attend all or part of any
meeting, as and when appropriate and necessary. None of these individuals were present or participated in any discussion
in respect of their own remuneration.
The Committee held four meetings during the year to coincide with the Company’s reporting cycle, including the approval
of the Annual report, and the management of the Executive Directors’ remuneration and incentive plans. The meetings
(members’ attendance at which is summarised on page 97) were conducted using secure online meeting technology when it
was not possible to meet in person due to the ongoing pandemic.
The Committee operates under terms of reference approved by the Board. The terms of reference were reviewed by
the Committee during the year to ensure they: remained relevant for the aims of the Committee; continued to meet
the requirements of the business, the Group’s shareholders and other stakeholders; and reflected changes in corporate
governance best practice. The terms of reference may be found on the Group website.
Annual Report and Accounts 2021 Tyman plc 125
GOVERNANCE
Committee activities during the year
The Committee considered the following matters during the past twelve months:
Salaries and fees • Reviewed and approved the base salaries to be paid to the Executive Directors and
senior managers from 1 January 2022, taking account of pay award trends across the
Group. This included a detailed assessment of the performance context for the second
stage of the phased increase in the CEO’s base salary proposed to shareholders last year
Bonus • Approved the structure of the 2021 bonus for the Executive Directors and senior
managers.
• Following the end of the year, reviewed and approved payouts under the 2021 bonus.
Share plans • Approved the proposed participant list, award opportunities and targets for the
2021 LTIP.
• Following the end of the year, reviewed and approved the vesting outcome of the
2019 LTIP.
• Approved the terms of the UK, US and International Employee Sharesave plans.
Remuneration Policy • Finalised the proposed Remuneration Policy that was submitted to shareholders, and
received 90.31% support, at the 2021 AGM.
Governance • Ensured the Group complied with gender pay gap and CEO pay ratio reporting
requirements.
• Reviewed changes to the Committee’s terms of reference, in line with the Code.
• Assessed the Committee’s performance and monitored progress against its set
objectives.
• Following the end of the year, reviewed and approved this 2021 Remuneration report.
Stakeholder engagement
Ahead of the 2021 AGM (and as reported in last year’s Remuneration report), the Committee consulted with Tyman’s largest
shareholders on the proposed revisions to the Policy and the two-stage implementation of this (in 2021 and 2022). The
Committee welcomed the broad indications of support for its proposals and the >90% level of support for the resolution
at the AGM. The Committee noted the feedback from some shareholders about disclosing fully the Committee’s decision-
making process in the event that it considered it appropriate to approve the second stage of the salary increase for the
CEO; and we hope that we have addressed this expectation appropriately on page 115.
At the time of implementing the revised LTIP and annual bonus structures for 2021, webinars were organised with our HR
leadership teams and scheme participants, to discuss the changes and intended operation of these schemes, including the
behaviours that they sought to incentivise. Through this two-way dialogue, we also received positive feedback on the LTIP
structure and the excitement and empowerment to drive outcomes that participation in the Plan creates. Further, the Board
Director with responsibility for workforce engagement also remained available to the workforce throughout the year, and
in the Board’s opinion continues to provide an effective conduit for direct engagement with the workforce about a range of
issues, including remuneration.
External advisers
During 2021, the Committee was advised by Ellason LLP. As described in last year’s report, Ellason was appointed as the
independent remuneration adviser to the Committee, effective 1 January 2021.
Total fees for Ellason’s advice provided to the Committee during the year were £35,801, excluding VAT (and charged on a
time and materials basis). Ellason provided advice to the Committee on all aspects of its agenda during the year, including
incentive design, target setting, benchmarking and aspects of remuneration governance. Ellason reports to the Chair of the
Committee and provides no other service to the Group during the year. As such, Ellason is considered by the Committee
to remain independent. Ellason is a signatory of the Remuneration Consultants Group Code of Conduct and any advice
received is governed by that Code which sets out guidelines to ensure that advice provided is independent and free of
undue influence.
Tyman plc126 Annual Report and Accounts 2021
Remuneration report continued
Remuneration outcomes for 2021
Single figure of total remuneration (audited)
The following table sets out the single figure of total remuneration for Directors for the financial years ended 31 December
2020 and 2021:
Year
ended
31
December
Salary/
fees
1
£
’
000
Benefits
4
£
’
000
Annual
bonus:
cash
2
£
’
000
Annual
bonus:
deferred
2
£
’
000
Vested
LTIP
awards
£
’
000
Cash
Payments
in lieu of
pension
3
£
’
000
Other
£’000
Total
remun-
eration
£’000
Total
fixed
£’000
Total
variable
£
’
000
Executive Directors
Jo Hallas 2021 478 20 262 262 – 72 – 1,094 570 524
2020 419 20 – – – 63 – 502 502 –
Jason Ashton 2021 331 19 152 152 – 23 – 677 373 304
2020 299 19 – – – 21 – 339 339 –
Non-executive Directors
Nicky Hartery
5
2021 193 – – – – – 193 193 –
2020 24 – – – – – 24 24 –
Paul Withers
6
2021 68 – – – – – 68 68 –
2020 52 – – – – – 52 52 –
Pamela
Bingham
2021 56 – – – – – 56 56 –
2020 49 – – – – – 49 49 –
Helen
Clatworthy
7
2021 57 – – – – – 57 57 –
2020 56 – – – – – 56 56 –
David Randich
8
2021 3 – – – – – 3 3 –
2020 – – – – – – – – –
1
Executive and Non-executive Directors who were in a role from April 2020 to July 2020 volunteered a salary/fees reduction of 25% for that
period as a response to COVID-19. The 2020 figures in the table show the reduced basic annual salaries and fees received in that year.
2
All bonuses for 2020 were cancelled as agreed by the Board as a response to COVID-19. Deferred bonuses are not subject to further
performance or service conditions.
3
Jo Hallas and Jason Ashton received cash in lieu of pension amounting to 15% and 7% of earned base salary, respectively. The Executive
Directors are not members of any of the Group pension schemes.
4
The benefits provided to the Executive Directors included car allowance, private medical insurance, permanent health insurance and life
assurance. There were no changes to the benefit policies or levels during the year.
5
Nicky Hartery was appointed to the Board on 1 October 2020.
6
Paul Withers was appointed to the Board on 1 February 2020.
7
Due to an administrative error, Helen Clatworthy received an overpayment of fees in 2020. Her fee for 2021 reflects the deduction made to
correct this in early 2021.
8
David Randich was appointed to the Board on 15 December 2021. His fee in 2021 includes a travel supplement (of £15,000 per annum,
pro-rated for 2021).
Annual Report and Accounts 2021 Tyman plc 127
GOVERNANCE
Determination of the 2021 Group Bonus Plan
The maximum bonus opportunities for Executive Directors in respect of the 2021 financial year were 150% of base salary
for the Chief Executive Officer, and 125% of base salary for the Chief Financial Officer. Of any amounts payable, 50% is paid
in cash and 50% is deferred in shares, which vest after three years. For 2021, the Executive Directors’ bonus was based
100% on financial metrics. The outcome of the 2021 bonus, alongside the performance targets set, is shown below:
Measure
Threshold
0% Target 50%
Exceeds
100%
Performance
achieved
Payout as
% of maximum2
Profit1 growth over
prior year
(25% weighting) £68.4m £71.8m £75.2m £81.5m 25.0
Profit performance
versus target
(45% weighting)3 £65.4m £70.2m £77.2m £81.5m 45.0
Cash conversion
of operating profit
(15% weighting) 75% 85% 95% 64% 0.0
Cash generation
versus target
(15% weighting)4 £63.4m £70.5m £77.5m £66.6m 3.3
Total bonus
achieved 73.3
1
Profit is defined as Adjusted Profit before Tax
2
Calculation is performed on the basis of targets and performance in £’000 rounded to one decimal percentage place.
3
Profit performance versus target is measured on a constant currency basis.
4
Cash generation targets for the Group exclude the investment impact of major projects. The Group recorded an Operational Cash Flow in
the year of £57.9 million and the investment impact of major projects in the year was £8.6 million.
DSBP awards granted during the year
As a result of the cancellation of the management bonus scheme in 2020, no DSBP awards were granted during 2021.
LTIP awards vesting in March 2022
LTIP awards were made to the Chief Executive Officer and Chief Financial Officer on 18 March 2019 and 14 May 2019
respectively, subject to performance measured over three years ended 31 December 2021. Awards were measured against
targets outlined below dependent upon the Company’s three-year cumulative adjusted EPS, and subject to a discretionary
underpin based on, inter alia, relative TSR over the period 2019–2021, and reported ROCE performance in 2021 of not less
than 15% (calculated on a 2018 GAAP basis).
EPS targets (100% weighting)
Cumulative EPS target over
the three years ending December 2021
1
Threshold – 25% of award 95.0p
Maximum – 100% of award 112.0p
1
Straight-line vesting between these points. No award is made if performance is below threshold.
Performance year Earnings per share
2019 27.46p
2020 27.20p
2021 32.10p
Adjusted cumulative EPS 86.76p
Tyman plc128 Annual Report and Accounts 2021
Remuneration report continued
As the adjusted cumulative EPS of 86.76p was less than the threshold of 95.0p, the LTIP awards lapsed in full.
Details of the Directors’ awards which lapsed are shown below:
Director Date of award
Normal
vesting date 1
Number of
shares under
award
Number of
shares vested
Number of
shares lapsed
Estimated
award value
on vesting
Jo Hallas 18 March 2019 March 2022 225,038 – 225,038 £nil
Jason Ashton 14 May 2019 May 2022 155,912 – 155,912 £nil
1
The awards are subject to a two-year holding period after vesting.
LTIP awards granted during the financial year
LTIP awards were granted to both Executive Directors on 21 May 2021, with face values of 150% of salary for the Chief
Executive Officer and 125% of salary for the Chief Financial Officer.
Director
Award
scheme
Date of
award
Normal
vesting
date 1
Number of
shares
awarded
Face value
of award
£’000 Share price2
Share award
receivable
at lower
threshold
Jo Hallas
LTIP – nil cost
options 21 May 2021 May 2024 205,111 716 £3.4920 51,277
Jason Ashton
LTIP – nil cost
options 21 May 2021 May 2024 118,445 414 £3.4920 29,611
1
The awards are subject to a two-year holding period after vesting.
2
Calculated by reference to the 5-day average closing price prior to the date that shares were awarded to all other eligible employees (five
trading days ended 11 March 2021) of £3.4920 (as stated on page 119 of the 2020 Annual Report, to support alignment of interests across
the LTIP population).
Vesting of the 2021 awards is based on four measures over a three-year period commencing 1 January 2021. Any awards
vesting for performance will be subject to an additional two-year holding period, during which time clawback provisions
will apply.
Performance will be measured against the targets as set out below:
Measure Weighting Basis of measurement
Threshold
(25% vesting)
Stretch
(100% vesting)
Adjusted EPS 40% 3-year CAGR to 2023 4.5% p.a. 12.0% p.a.
ROCE 25% 2023 outturn 13.0% 14.2%
Relative TSR 20%
Ranking vs
constituents of the
FTSE250 Index (xIT) Median Upper quartile
ESG 15%
− Safety Four categories
weighted equally
2023 TRIR1 5.5 4.0
− Environment 2023 TCO
2
e per
£m revenue2
64.0 48.0
− Impact 2023 sustainable
product revenues3
17% 20%
− Culture Employee engagement Based on a qualitative assessment of
improvement by the Workforce Engagement
NED, taking into account factors such as eNPS
4
,
ethics training and incidents, diversity and
inclusion, and talent development.
1
Total Recordable Incident Rate. Aligns with Tyman’s stated ambition to achieve a TRIR of <3.0 by 2026.
2
Tonnes of carbon dioxide equivalents per £m revenue is a measure of operation carbon emissions. Aligns with Tyman’s stated ambition to
achieve a 50% reduction by 2026 (relative to a 2019 baseline).
3
Reflects the % of total revenues that meet the UN Sustainable Development Goals (SDGs) in use.
4
Employee Net Promoter Score.
For performance between Threshold and Stretch, the % vesting increases on a straight-line sliding scale.
Annual Report and Accounts 2021 Tyman plc 129
GOVERNANCE
Directors’ interests in shares
The interests of each person who was a Director of the Company as at 31 December 2021 (together with interests held by
his or her connected persons) were:
Director Shares
Options
% of
salary
required
(2021)2
% of
salary
achieved 3
2020
guidelines
met?
Owned outright or vested Unvested
and not
subject to
performance
conditions
Unvested
and
subject to
performance
conditions
Vested
but not
exercised
Unvested
and not
subject to
performance
conditions
31
December
2021 1
31
December
2020
Nicky Hartery 100,000 100,000 – – – – – – –
Jo Hallas 249,597 161,454 29,740 634,502 – 10,793 200% 209% Yes
Jason Ashton 27,351 27,351 17,155 420,389 – 10,793 200% 33% Building
Paul Withers 50,000 50,000 – – – – – – –
Pamela
Bingham 3,928 3,928 – – – – – – –
Helen
Clatworthy 15,000 15,000
David Randich – n/a – – – – – – –
1
From 31 December 2021 to 3 March 2022 there were no changes to the above stated interests.
2
Annualised base salary as at 31 December 2021.
3
Based on the closing price of Tyman plc ordinary shares of £3.995 on 31 December 2021, and Executive Directors’ beneficial shareholdings
at that date (i.e. shares owned outright or vested).
Directors’ interests in shares under all share plans (LTIP, share awards issued under Listing Rule
9.4.4(2), DSBP and SAYE) (audited)
Shares over which awards
Award
scheme
Award
date
held at
1 Jan 2021
granted
during the
year
vested
during the
year1
lapsed/
cancelled
during the
year
held at
31 Dec
2021
Exercise
price
Earliest
vesting
date2
Jo Hallas
LTIP 18/03/19 225,038 – – – 225,038 Mar 2022
LR 9.4.2(2)
awards3 01/04/19 156,814 – 156,814 – – Apr 2021
LTIP
4
25/03/20 204,353 – – – 204,353 Mar 2023
LTIP
4
21/05/21 – 205,111 – – 205,111 May 2024
DSBP 11/03/20 29,740 – – – 29,740 Mar 2023
UK ESPP 30/09/19 4,066 – – – 4,066 £1.7706 Nov 2022
UK ESPP 30/09/20 6,727 – – – 6,727 £1.6054 Nov 2023
Jason
Ashton
LTIP 14/05/19 155,912 – – – 155,912 May 2022
LTIP
4
25/03/20 146,032 – – – 146,032 Mar 2023
LTIP
4
21/05/21 – 118,445 – – 118,445 May 2024
DSBP 11/03/20 17,155 – – – 17,155 Mar 2023
UK ESPP 30/09/19 4,066 – – – 4,066 £1.7706 Nov 2022
UK ESPP 30/09/20 6,727 – – – 6,727 £1.6054 Nov 2023
1
LTIPs are subject to a mandatory two-year holding period, upon vesting, after the sale of the necessary number of shares to cover tax and
national insurance payments.
2
All awards lapse ten years from the date of grant.
3
These one-off awards of nil cost options were granted under the exemption to the requirement for prior shareholder approval, to which
Listing Rule 9.4.2(2) applies and were made to facilitate recruitment and to compensate for loss of certain benefits and share awards from
Jo Hallas
’ previous employment, which were forfeited.
4
Details of qualifying performance conditions in relation to outstanding LTIP awards are summarised below.
Tyman plc130 Annual Report and Accounts 2021
Remuneration report continued
March 2020 LTIP
Measure
EPS
(50% of an award)
ROCE
(50% of an award)
Performance measurement
basis FY22 adjusted EPS FY22 ROCE
25% (threshold) vesting 31.33p 13.0%
100% vesting 38.57p 14.2%
Between 25% and 100%
vesting Straight line sliding scale Straight line sliding scale
Underpin Discretionary; relative TSR Discretionary; relative TSR
Details of the 2021 LTIP performance conditions are set on page 129.
Payments for loss of office
There were no payments for loss of office made to past Directors during the year.
Payments to past Directors
There were no cash payments to past Directors during the year.
In line with the leaver treatment outlined in the 2019 Annual Report, James Brotherton’s retained interest in 23,178 shares
(including dividend equivalents) under the 2018 DSBP vested in March 2021.
In line with the leaver treatment outlined in the 2019 Annual Report, Louis Eperjesi’s retained interest in 37,554 shares
(including dividend equivalents) under the 2018 DSBP vested in March 2021.
On 12 March 2021, which was the date of vesting, based on the closing share price that day of £3.58, Louis’s retained
interest was valued at £134,443.32 while James’s was £82,977.24.
Service contracts
Service contracts were entered into between the Company and the Executive Directors as follows:
Director Commencement date Notice period in months
Jo Hallas 1 April 2019 Twelve
Jason Ashton 9 May 2019 Twelve
Details of the letters of appointment of the Non-executives are shown below:
Non-executive
Director Commencement date
Notice period in
months Commencement date
Notice period in
months
Nicky Hartery 1 October 2020 1 October 2020 1 October 2023 One
Paul Withers 1 February 2020 1 February 2020 1 February 2023 One
Pamela Bingham 18 January 2018 18 January 2021 18 January 2024 One
Helen Clatworthy 9 January 2017 9 January 2020 9 January 2023 One
David Randich 15 December 2021 15 December 2021 15 December 2024 One
Copies of service contracts and letters of appointment are available to view at the Company’s registered office.
External appointments of Executive Directors
The Committee acknowledges that Executive Directors may be invited to become independent non-executive directors
of other listed companies that have no business relationship with the Company and that such roles may broaden their
experience and knowledge to Tyman’s benefit.
The Executive Directors are permitted to accept such external appointment with the prior approval of the Board, which would only
be given if it does not present a conflict of interest with the Group’s activities (including consideration of whether such individual
has the capacity for the required time commitment) and the wider exposure gained will be beneficial to such Executive Director’s
development. Where fees are payable in respect of such appointment, they may be retained by the Executive Director.
Jo Hallas was appointed as an independent non-executive director of Smith & Nephew plc on 1 February 2022.
Annual Report and Accounts 2021 Tyman plc 131
GOVERNANCE
Performance graph and table
This graph shows the value, by 31 December 2021, of £100 invested in Tyman plc on 31 December 2011, compared with
the value of £100 invested in the FTSE All-Share and FTSE SmallCap indices on the same date, these being two broad
market indices of which Tyman has been a constituent for the majority of the period shown.
£500
£400
£300
£200
£100
£0
Value (£) (rebased)
Tyman plc FTSE All-Share Index FTSE Small Capitalisation Index
31/12/11 31/12/12 31/12/13 31/12/14 31/12/15 31/12/16 31/12/17 31/12/18 31/12/19 31/12/20 31/12/21
Historical Chief Executive remuneration outcomes
The table below sets out the single figure for the total remuneration paid to the Chief Executive Officer, together with
the annual bonus payout (expressed as a percentage of the maximum opportunity) and the LTIP payout (expressed as a
percentage of the maximum opportunity), for the current year and previous nine years.
Year CEO
Single figure of total
remuneration £’000
Annual bonus payout
% LTIP payout %
2021 Jo Hallas 1,094 73.3 Nil
2020 Jo Hallas 502 Nil1 n/e
2019 Jo Hallas 1,299
2
30 n/e2
Louis Eperjesi 134 n/e Nil
2018 Louis Eperjesi 1,153 39.5 90
2017 Louis Eperjesi 876 51 42
2016 Louis Eperjesi 1,052 91 49
2015 Louis Eperjesi 1,026 58 100
2014 Louis Eperjesi 1,137 31 94
2013 Louis Eperjesi 1,821 90 100
2012 Louis Eperjesi 493 68 Nil
2011 Louis Eperjesi 338 22 Nil
n/e = not eligible – individual was employed during the year but was not eligible to participate in the bonus or LTIP scheme as appropriate that year.
1
The 2020 Group bonus was cancelled due to the scale of the financial impact of the COVID-19 crisis on the business, the wider stakeholder
experience and the societal impact of the pandemic.
2
The single figure shown for Jo Hallas for 2019 of £1,299k includes £775k in relation to the buy-out of the share awards at her previous
employer which she forfeited by joining Tyman during the year. Consequently, the amount paid to Jo Hallas solely in respect to her Tyman
employment during 2019 was £524k.
Tyman plc132 Annual Report and Accounts 2021
Remuneration report continued
Percentage change in remuneration of Directors and employees
In accordance with the Companies (Directors’ remuneration policy and Directors’ remuneration report) Regulations 2019
(applying to financial years commencing on or after 10 June 2019), the table below covers the percentage change in salary/
fees, taxable benefits and annual bonus for each Executive Director and Non-executive Director; and will continue to be
built up over time to display a five-year history.
Director
1,2,3
Basic salary / total fee4 Taxable benefits5 Annual bonus6
2021 vs 2020 2020 vs 2019 2021 vs 2020 2020 vs 2019
8
2021 vs 2020 2020 vs 2019
Nicky Hartery 1.2% n/a n/a n/a n/a n/a
Jo Hallas 14.0% -5.9% 1.7% 4.7% n/a -100.0%
Jason Ashton 10.7% -6.0% 1.3% 4.4% n/a -100.0%
Paul Withers 11.0% n/a n/a n/a n/a n/a
Pamela
Bingham 14.4% 1.0% n/a n/a n/a n/a
Helen
Clatworthy 2.6% -1.3% n/a n/a n/a n/a
David Randich n/a n/a n/a n/a n/a n/a
Average UK
employee7 6.1% 1.9% 17.9% -1.6% n/a -91.4%
1
Relevant changes in Directors and their responsibilities include:
a
Nicky Hartery was appointed to the Board on 1 October 2020.
b
Jo Hallas was appointed to the Board as the Chief Executive Officer on 1 April 2019.
c
Jason Ashton was appointed to the Board as the Chief Financial Officer on 9 May 2019.
d
Paul Withers was appointed to the Board on 1 February 2020 and became Chair of the Remuneration Committee and Senior Independent
Director with effect from 31 March 2020.
e
Pamela Bingham started receiving a fee in respect of her role as Employee Engagement Director with effect from 1 March 2020.
f
David Randich was appointed to the Board on 15 December 2021.
2
All figures shown are based on a full-time equivalent basis to allow comparability where a Director was not in role for the entirety of a
financial year.
3
Note that those Directors who were not a Director at any point during 2021 have not been included. The percentage changes in their
remuneration for prior years (and in which they were a Director) are disclosed in the 2020 Annual Report.
4
All the Directors who were in role from April to July 2020 volunteered cuts of 25% to their base salaries and fees for four months (April to
July) due to COVID-19. Whilst the workforce also experienced cuts to their salaries ranging from 10–20%, the workforce’s forgone salaries
were repaid to them. However, the cuts to the Directors’ salaries and fees were not repaid to them. The % change from 2020 to 2021
reflects this temporary reduction in basic salary or total fee for part of 2020 only, as well as the annual increases awarded for 2021.
5
For Executive Directors, taxable benefits consist primarily of car allowance, private medical insurance, permanent health insurance and life
assurance. Non-executive Directors do not receive taxable benefits.
6
The figures shown are reflective of any bonus earned in respect of the relevant financial year. The n/a for the % change in bonuses from
2020 to 2021 reflects the cancellation in 2020 (the base year) of the management bonus scheme following the onset of the COVID-19
pandemic. Non-executive Directors are not eligible to participate in the annual bonus scheme.
7
The average percentage change of employee FTE salary is calculated with reference to the UK workforce as at 31 December 2021. This
definition is broader than all employees of Tyman plc (as required by the reporting regulations), reflecting that the Tyman plc employee
population is very small (and limited largely to the Head Office) and therefore is considered by the Committee not to be sufficiently
representative of our wider workforce.
8
Taxable benefits for 2020 vs 2019 have been re-stated to exclude pension contributions.
Annual Report and Accounts 2021 Tyman plc 133
GOVERNANCE
Relative spend on pay
The table below sets out, for the years ended 31 December 2021 and 31 December 2020, the total cost of employee
remuneration for the Group together with the total distributions made to shareholders by way of dividends.
Relative spend on pay (£’000) 2021 2020
Year on
year
Total employee remuneration for the Group (excluding share-based payments) 151,700 140,037 8.33
Dividends paid in the financial year 15,630 Nil n/a
CEO pay ratio
The Regulations require certain companies to disclose the ratio of the Chief Executive’s pay, using the amount set out in the
single total figure table, to that of the 25th percentile, median and 75th percentile total remuneration of full-time equivalent
UK employees.
Year Method
25th
percentile
pay ratio
Median pay
ratio
75th
percentile
pay ratio
2021 Option A 1:55 1:46 1:31
2020 Option A 1:26 1:22 1:14
2019 Option A 1:32 1:27 1:19
CEO pay
(£)
P25 pay
(£)
P50 pay
(£)
P75 pay
(£)
Salary
2021 477,500 18,595 22,440 34,066
2020 418,919 18,331 21,930 33,729
2019 441,750 19,550 23,335 33,598
Total pay
2021 1,094,116 19,897 23,524 36,451
2020 501,409 19,064 23,027 36,090
2019 657,510 20,333 24,268 33,598
The 25th percentile, median and 75th percentile figures used to determine the above ratios were selected from an analysis
of the full-time equivalent annualised remuneration (comprising salary, benefits, pension, annual bonus and long-term
incentives) of all the UK employees for the year ended 31 December 2021. This methodology is defined as Option A under
the reporting regulations and is considered by the Committee to be the most accurate approach.
The Committee notes that the statutory CEO pay ratios have increased in 2021, with the ratio of CEO total remuneration to
the median employee, for example, rising from 22:1 to 46:1. The primary driver of the increase this year is the payment of
an annual bonus to the CEO for 2021 performance (compared to no bonus payment in 2020, with the scheme having been
cancelled for Executive Directors as a result of the pandemic). Figures recorded in each of 2019, 2020 and 2021 do not
include the value of any LTIP vesting to the CEO which is expected to be a significant driver of the headline pay ratio each
year and which may lead to an increase in the ratios in future (but which will reflect the longer-term performance of the
Group).
In reviewing the pay ratio analysis, the Committee is satisfied that the individuals identified at each quartile reflect the pay
profile across different levels at Tyman, and that the overall picture presented by the ratios is consistent with the Group’s
pay, reward and progression policies.
Tyman plc134 Annual Report and Accounts 2021
Remuneration report continued
Statement of implementation for the 2022 financial year
Details of the Directors’ remuneration for the 2022 financial year are set out in the table below:
Salary Jo Hallas – to be increased to £550,000 with effect from 1 January 2022
Jason Ashton – £344,500 (2021: £330,890 – 4.1% increase, in line with the UK workforce average)
As set out in the Annual statement, the Committee awarded Jo Hallas the second stage of the salary
increase set out in last year’s report in recognition of her ongoing strong performance and the
performance of the Group as whole.
Pension allowance Jo Hallas – 7% of base salary (reduced from 15% of salary to align with the majority of the wider
workforce)
Jason Ashton – 7% of base salary
Benefits Life assurance cover, critical illness cover, private medical and dental cover, car allowance (of £17,500 per
annum) and professional tax and financial advice.
Annual bonus Maximum opportunities:
Jo Hallas: 150% of salary
Jason Ashton: 125% of base salary
Bonuses will be based entirely on financial measures, with 70% linked to adjusted profit before tax and
30% linked to cash generation. Consistent with prior years, the precise bonus targets will be disclosed
in detail in the 2022 Annual Report and Accounts (these are considered currently to be commercially
sensitive). Any bonus earned will be payable 50% in cash and 50% in shares deferred for three years.
LTIP Award opportunities:
Jo Hallas: 150% of salary
Jason Ashton: 125% of base salary
LTIP awards comprise grants of nil-cost options, vesting three years after grant, subject to performance
over a 3-year period commencing 1 January 2022 against four measures:
Measure Weighting
Basis of
measurement
Threshold
(25% vesting)
Stretch
(100%
vesting)
Adjusted EPS 40% 3-year CAGR to
2024
4.5% p.a. 12.0% p.a.
ROCE 25% 2024 outturn 13.6% 15.04%
Relative TSR 20% Ranking vs
constituents of
the FTSE 250
Index (xIT)
Median Upper quartile
Sustainability
Scorecard
15%
− Safety
− Sustainable
Operations
− Sustainable
Culture
− Sustainable
Solutions
Four categories
weighted equally
2024 TRIR1
2024 TCO
2
e per
£m revenue2
5.0
56.0
4.0
41.0
Employee
engagement
Qualitative
4
% revenue from
sustainable
products in-use
3
21% 24%
1
Total Recordable Incident Rate. Aligns with Tyman’s stated ambition to achieve a TRIR of <3.0 by 2026.
2
Tonnes of carbon dioxide equivalents per £m revenue is a measure of operational carbon emissions.
Aligns with Tyman’s stated ambition to achieve a 50% reduction by 2026 (relative to a 2019 baseline).
3
Reflects the % of total revenues that meet the UN Sustainable Development Goals (“SDGs”) in use.
4
To be based on a qualitative assessment of improvement by the Workforce Engagement NED, taking
into account factors such as eNPS, ethics training and incidents, diversity and inclusion, and talent
development.
For performance between Threshold and Stretch, the % vesting increases on a straight line sliding scale.
Vested LTIP awards have a two-year post-vesting holding period.
Annual Report and Accounts 2021 Tyman plc 135
GOVERNANCE
Non-executive Director fees
The Chair is paid an annual basic fee (determined by the Remuneration Committee), with no additional fee for chairing the
Nominations Committee. For 2022, the Chairman’s annual fee will be increased to £205,000, to reflect his ongoing valued
contribution to the Group.
Non-executive Directors are paid an annual basic fee, plus an additional fee for chairing a Board Committee. These fees
are determined by the Chairman, CEO and CFO. In line with the increases awarded to the wider UK workforce, the annual
base fee payable to NEDs will be increased by 4.0% (to £52,000) for 2022. In addition, to reflect the additional time
commitment of the intercontinental travel required of David Randich to attend Board meetings, and within Policy limits, a
travel supplement (of £15,000 per annum) will be payable to Mr Randich in addition to his base fee. Fees payable to NEDs
for additional responsibilities remain unchanged from 2021, as set out below.
Position
Annual fee 2022
£
Annual fee 2021
£
Chair 205,000 192,850
Non-executive Director 52,000 50,000
Annual fee for the Chair of the Audit or Remuneration Committees 10,000 10,000
Annual fee for the Senior Independent Director 8,000 8,000
Annual fee for the Workforce Engagement Director 6,000 6,000
Intercontinental travel supplement 15,000 n/a
Other items
Details of share plans
During the year awards were made under the following plans:
• Tyman Sharesave Plans: in the form of options totalling 112,836 shares at a price of £3.49 to £3.69, vesting over a one
or three-year period, depending on jurisdiction. The total number of awards outstanding as at 31 December 2021 is
562,382.
• Deferred Share Bonus Plan: none. The total number of share awards outstanding as at 31 December 2021 is 231,005.
• Tyman Long Term Incentive Plan: awards totalling 868,499 shares were made in the year. Awarded with performance
conditions, vesting over a three-year period, with a further two-year holding period. The total number of LTIP awards
outstanding as at 31 December 2021 is 2,459,148.
The total number of shares outstanding under all share plans as at 31 December 2021 is 3,252,535.
Tyman plc136 Annual Report and Accounts 2021
Remuneration report continued
Dilution
As at 31 December 2021, shares equivalent to 1.65% of the Group’s issued share capital (excluding treasury shares) would
be required to settle all outstanding awards under Executive and employee share plans, assuming maximum vesting.
However, the Group operates the general principle that the vesting of share awards under Executive and employee share
plans should be satisfied either by the issue of shares out of treasury or, subject to Trustee consent, through shares acquired
on the market by the Tyman Employee Benefit Trust.
Certain jurisdictions require that new shares are issued to employees to settle vesting under share arrangements. Where
new shares are issued in these circumstances, it is the Group’s intention to match the new shares issued with an equal
purchase of shares on the market either into treasury or into the Tyman Employee Benefit Trust.
In accordance with the Investment Association’s Principles of Remuneration, the Company can satisfy awards to employees
under all its share plans with new issue shares or shares issued from treasury up to a maximum of 10% of its issued share
capital (adjusted for share issuance and cancellation) in a rolling ten-year period. Within this 10% limit, the Company
can only issue (as newly issued shares or from treasury) 5% of its issued share capital (adjusted for share issuance and
cancellation) to satisfy awards under Executive (discretionary) plans.
As well as the LTIP and DSBP, the Company operates various all employee share schemes as described on page 123. Subject
to Trustee consent, shares acquired on the market have been used to satisfy the exercise of options under the Sharesave
Scheme and the International Sharesave Plans.
Statement of voting at Annual General Meetings
The table below sets out the results of the 2021 AGM in respect of the Remuneration policy and Annual Report on Directors’
remuneration, respectively:
Director Votes for
Votes at
discretion
Votes
against
Total number of
votes cast
Total number of
votes withheld
Remuneration policy
152,491,342
(90.31%)
0
(0%)
16,362,020
(9.69%)
168,853,362
(100%) 6,895
Annual Report on Directors’
remuneration
153,510,584
(96.45%)
0
(0%)
5,647,668
(3.55%)
159,158,252
(100%) 9,702,005
The Committee is grateful to the Group’s shareholders for their support as shown in the voting levels at the 2021 AGM and
looks forward to receiving their continued support in 2022.
This Annual Report on Directors’ remuneration has been approved by the Remuneration Committee and is signed on its behalf by:
Paul Withers
Chair, Remuneration Committee
3 March 2022
Annual Report and Accounts 2021 Tyman plc 137
GOVERNANCE
Principal activities
The Group is a leading international supplier of engineered
fenestration components and access solutions to the
construction industry. These activities remain unchanged
from the previous year. The Company is the ultimate holding
company of the Tyman Group of companies. A full list of
subsidiaries may be found on pages 194 to 197.
Share capital
The Company’s shares are listed in the premium segment
of the Official List and are traded on the Main Market of
the London Stock Exchange. The Company’s share capital
consists of ordinary shares of 5.00 pence each, carrying the
right to attend, vote and speak at general meetings of the
Company. The ordinary shares also have the right to profits
of the Company which are available for distribution and the
return of capital on a winding up.
The issued share capital of the Company as at 31 December
2021 was 196,762,059 ordinary shares of 5.00 pence each,
of which 521,423 shares are held in Treasury.
Further information on the Company’s share capital may be
found in note 22 to the Group financial statements.
Directors
The names and biographical details of the Directors are on
pages 92 and 93 of this report. Further information regarding
the Directors who served during the year to 31 December 2021
may be found on pages 125 to 137 in the Remuneration report.
Re-election of Directors
Each Director of the Board will stand for election or re-
election at the AGM. Accordingly, Nicky Hartery, Jo Hallas,
Jason Ashton, Paul Withers, Pamela Bingham and Helen
Clatworthy will offer themselves for re-election at the 2022
AGM. As this is Dave Randich’s first year of appointment, he
will offer himself for election to the Board.
Annual General Meeting
At the Company’s 2021 AGM the Directors were authorised
to allot shares equal to approximately one-third of the
issued share capital of the Company as at 5 April 2021 or a
further one-third of the issued share capital in connection
with a pre-emptive offer by way of a rights issue.
The Directors were also given the authority to allot shares
for cash representing up to 5.0% of the Company’s issued
share capital as at 5 April 2021, without first offering
these shares to existing shareholders in the proportion to
their existing holding. The Directors confirmed there was
no intention to issue more than 7.5% of the issued share
capital of the Company on a non-pre-emptive basis in any
rolling three-year period without prior consultation with
the relevant investor groups (except in connection with an
acquisition or specified capital investment as contemplated
by the Pre-Emption Group’s Statement of Principles).
Shareholders also approved an additional authority for
the Directors to issue ordinary shares, or sell treasury
shares, for cash in connection with an acquisition or
capital investment of the kind contemplated by the Pre-
Emption Group’s Statement of Principles up to an additional
aggregate amount being approximately 5.0% of the issued
ordinary share capital as at 5 April 2021.
At the 2021 AGM, the Company was also authorised
to make market purchases of its own shares of up to
approximately 14.99% of the shares in issue as at 5 April
2021. The Board had no immediate intention of exercising
this authority but wished to retain the flexibility to do so
should it be needed in the future. This authority was not
used during the year and therefore remained in full at the
year end.
The Directors believe that it is in the best interests of
the Company that these powers are renewed and, as in
previous years, resolutions to renew these authorities will
be put to shareholders at the Company’s AGM to be held on
19 May 2022.
The Notice of the Company’s AGM and related explanatory
notes accompany this Annual Report and Accounts, which
may also be found with further information on these
resolutions on the Group’s website. Other than elections
to the Board and authorities to allot shares, to dis-apply
pre-emption rights in certain limited circumstances and to
purchase its own shares as explained above, the principal
business to be considered at the AGM is the approval of an
amendment to the Company’s articles of association.
Waiver of dividends
As at 31 December 2021, the Tyman Employee Benefit
Trust held 1,068,969 ordinary shares in Tyman plc. Further
information on the Employee Benefit Trust may be found
on page 43. Dividend waivers are in place from Tyman plc
in respect of the 521,423 shares held in Treasury as at
31 December 2021 and all but £0.01 of the total dividend to
the Tyman Employee Benefit Trust.
Strategic report
Pages 2 to 137 (inclusive) of this Annual Report comprise
the Strategic report, Governance and Directors’ report
and the Remuneration report. These reports have been
written and presented in accordance with English law and
the liabilities of the Directors in connection with this report
shall be subject to the limitations and restrictions provided
accordingly.
The Directors are required under the Disclosure Guidance
and Transparency Rules to include a Management report
containing a fair review of the business and a description of
the principal risks and uncertainties facing the Group and
the Company. The Management report disclosures can be
found in the Strategic report on pages 84 to 91.
A description of the main features of the Group’s internal
control and risk management systems in relation to the
process for preparing the consolidated accounts continues
further on page 86 of the Strategic report.
Pursuant to Section 414c of the Companies Act 2006 the
Strategic report on pages 2 to 91 contains disclosures in
relation to future developments, dividends, finance and
financial risk management, and the disclosures relating to
the Group’s greenhouse gas emissions and environmental
policy and performance.
A full description of the Group’s activities relating to our
employees, their involvement with the Company and our
employment and health and safety practices and policies
may be found on pages 59 to 63 of the Strategic report.
Share transfer restrictions
There are no restrictions on the transfer of fully paid-up
shares in the Company.
Directors and Officers’ insurance
Details of the Group’s Directors and Officers’ insurance
arrangements may be found on page 100.
Other statutory information
Tyman plc138 Annual Report and Accounts 2021
Substantial shareholders
The Company has been notified of, or has identified, the following direct or indirect interests comprising 3% or more of its
voting share capital (the issued share capital less shares held by the Company in Treasury) in accordance with DTR 5. The
Company’s substantial shareholders do not have different voting rights from those of other shareholders:
Ordinary shares
held as at
31 December 2021 %
Ordinary shares
notified as at
3 March 2022 %
Alantra Asset Management 19,356,843 9.86 19,356,855 9.86
Fidelity International 17,768,977 9.05 17,866,110 9.10
BlackRock 14,073,538 7.17 14,073,538 7.17
Wellington Management 11,540,758 5.88 11,349,351 5.78
BMO Global Asset
Management (UK) 10,341,247 5.27 10,100,878 5.15
abrdn 9,431,864 4.81 9,426,308 4.80
Artemis Investment
Management 9,146,353 4.66 9,146,353 4.66
Allianz Global Investors 8,154,164 4.15 8,155,874 4.16
Chelverton Asset
Management 7,050,000 3.59 7,050,000 3.59
M&G Investments 6,278,068 3.20 6,048,791 3.08
Janus Henderson Investors 6,223,516 3.17 6,271,641 3.20
Financing
The Group finances its operations through a mixture of retained
profits, equity and borrowings. The Group does not trade in
financial instruments. Full details of the Group’s borrowing
facilities are set out in note 18 to the financial statements.
The main risks arising from the Group’s borrowings are
market risk, interest rate risk, liquidity risk, foreign currency
risk and credit risk. The Board reviews and agrees policies
for managing each of these risks and the policies, which
have been applied throughout the year, are set out in note
19 to the financial statements.
Financial reporting
The Annual Report and Accounts are intended to provide
a balanced and clear assessment of the Group’s past
performance, present position and future prospects. A
statement by the Directors on their responsibility for preparing
the financial statements is given on page 100 and a statement
by the auditors on their responsibilities is given on page 147.
Employee engagement and policies
This information is included in the Sustainability report on
pages 46 to 77.
Other Stakeholder engagement and policies
Information summarising how the directors have had regard
to the need to foster the company’s business relationships
with suppliers, customers and others, and the effect of that
regard, including on the principal decisions taken by the
company during the financial year is included in the s172
statement on pages 81 to 83.
Going concern
As a consequence of the work undertaken to support the
viability statement, which may be found on pages 78 and
79, the Directors have continued to adopt the going concern
basis in preparing the financial statements (see note 2 to
the financial statements).
Auditors and disclosure of information to
auditors
The Directors who held office at the date of approval
of this Directors’ report confirm that, so far as they are
aware, there is no relevant audit information of which the
Company’s auditors are unaware and each Director has
taken all the steps that they ought to have taken as a
Director to make themselves aware of any relevant audit
information and to establish that the Company’s auditors
are aware of that information.
As explained in the Audit and Risk Committee report
on page 109, PricewaterhouseCoopers LLP will not seek
reappointment when their term of office expires at the end
of the forthcoming AGM. Following a competitive tender
process, and on the recommendation of the Audit and Risk
Committee, the Board intends to appoint Deloitte LLP as
the Group’s external auditor. Accordingly, the appointment
of Deloitte LLP is recommended to the shareholders for
approval at the forthcoming AGM.
Political donations
The Company did not make any political donations during
the year (2020: £Nil).
Disclosure of information under Listing Rule
9.8.4
Reporting requirements under LR 9.8.4R (4), (5) and
(6) and LR 9.8.6 (1), if applicable, have been included in
the Remuneration report on pages 114 to 137. All other
information required to be disclosed, under LR 9.8.4R (1),
(2) and (7) to (14), if applicable, is covered in this report.
There is no further information to disclose.
Events after the reporting year
None.
By order of the Board
Peter Ho
General Counsel & Company Secretary
3 March 2022
Company registration number: 02806007
Annual Report and Accounts 2021 Tyman plc 139
GOVERNANCE
Independent auditors’ report
to the members of Tyman plc
Report on the audit of the financial statements
Opinion
In our opinion:
• Tyman 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 31 December 2021 and of the Group’s profit 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;
• the Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards, comprising 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 (the “Annual Report”), which
comprise: the consolidated and Company balance sheets as at 31 December 2021; the consolidated income statement
and 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 4 to the financial statements, 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
• 10 operating units subject to full scope audits on the basis of financial significance
• Specific procedures over certain classes of transactions and balances at 9 further operating units where the particular
balances were financially significant
• 81% (2020: 80%) of Group revenue accounted for by reporting units where full scope audit work performed over
revenue. 79% (2020: 79%) of Group adjusted operating profit accounted for by the reporting units where full scope
audit work was performed.
Key audit matters
• Goodwill and intangible assets impairment assessment (Group)
• Inventory valuation (Group)
• Present value of defined benefit obligations (Group)
• Recoverable amount of investments in subsidiaries and affiliates (Company)
Tyman plc140 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
Materiality
• Overall Group materiality: £4,000,000 (2020: £4,100,000) based on 4.5% of adjusted operating profit.
• Overall Company materiality: £3,300,000 (2020: £3,700,000) based on 1% of total assets.
• Performance materiality: £3,000,000 (2020: £3,100,000) (Group) and £2,475,000 (2020: £2,800,000) (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.
As part of our audit, we made enquiries of management to understand the process they have adopted to assess the
extent of the potential impact of climate change risk on the Group’s financial statements. We read management’s paper
which sets out their assessment of climate change risk to the Group and the impact on the financial statements and
impairment testing. Management consider that the impact of climate change does not give rise to a material financial
statement impact as explained in note 10 to the financial statements. We used our knowledge of the Group to evaluate
management’s assessment. We particularly considered how climate change risks would impact the assumptions made in the
forecasts prepared by management used in their impairment analyses and going concern. Our procedures in relation to the
assessment of the carrying value of goodwill and intangible assets are described in the related key audit matter. We also
discussed with management the ways in which climate change disclosures should continue to evolve as the Group continues
to develop its response to the impact of climate change.
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.
Inventory valuation, valuation of defined benefit pension schemes and recoverable amount of investments in subsidiaries
and affiliates are new key audit matters this year. Going concern and Impact of Covid-19, which were key audit matters last
year, are no longer included because of the following:
• Going concern: in the prior year, the entity’s ability to continue as a going concern was assessed as a significant risk due
to the Covid-19 pandemic affecting the environment in which the Group operates resulting in the financial covenants
for the Group being reset during the period. In the current year the Group has experienced strong growth and covenant
compliance. The year end going concern assessment shows significant headroom forecasted throughout the going
concern period. Based on these considerations, we have assessed the going concern risk as normal for the current year
audit.
• The impact of Covid-19 is no longer included as a key audit matter because the Group has not suffered any significant
impact from the pandemic and trading is ahead of that achieved pre pandemic.
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to the members of Tyman plc
Otherwise, the key audit matters below are consistent with last year.
Key audit matter How our audit addressed the key audit matter
Goodwill and intangible assets impairment
assessment (Group)
Refer to note 10 to the financial statements.
There is £363.3 million of goodwill and £66.8
million of intangible assets recognised on the
balance sheet, predominantly arising from past
acquisitions. The Group operates in the building
products market and therefore future results
are impacted by fluctuations in the housing and
construction market and wider economy. We
focused on these balances because the judgement
of whether or not an impairment charge on any of
the three CGUs was necessary involved significant
estimates about the future results of the business.
Management has considered the potential impact
of climate change on the assumptions supporting
the impairment test, taking into consideration
the risks and opportunities identified in the
climate change risk assessment, the qualitative
assessment of the potential financial impact and
mitigations, and the commitments made in the
sustainability roadmap.
There are deemed to be three CGUs, namely North America,
UK & Ireland and International. For all the CGUs we evaluated
management’s future cash flow forecasts and tested the underlying
value in use calculations.
We agreed management’s forecast to the latest Board approved
strategic plan. We also compared historic actual results to those
budgeted to assess the quality of management’s forecasting. The key
assumptions in the calculations were growth in revenue, gross margin
and EBITDA margins. In assessing these assumptions, we considered
external construction industry outlook reports and economic growth
forecasts from a variety of sources, as these were good indicators of
building product sales.
We also involved our valuation experts and tested:
• management’s assumption in respect of the long-term growth
rates in the forecasts by comparing them to long term average
growth rates of the economies in the relevant territories; and
• the discount rate by assessing the cost of capital for the Company
and comparable organisations.
We considered the outturn of significant estimates from last year to
assess management’s forecasting accuracy.
We considered the climate change risk assessment prepared by
management and understood the impact on management’s forecast,
which is not deemed material based on available information.
We reviewed for completeness the climate change risk assessment
by performing an analysis of sectors and competitors in relation to
physical and transitional risks.
We considered the impacts of climate change risk assessment in
relation to the assumptions supporting the impairment assessment
and agree with management’s conclusion that there is no material
impact based on the information available.
We have also considered the effects of Covid-19 in relation to cash
flow forecasts and determined this to have no significant impact.
We are satisfied these assumptions are appropriate.
We performed sensitivity analysis in respect of the key assumptions,
which were flexed to determine at what level this would eliminate the
headroom in the model.
There were no changes in the key assumptions that were considered
reasonably possible which would eliminate headroom, as outlined in
the disclosure included in note 10.
We have considered management’s disclosures in respect to the
recoverability of goodwill and intangible assets to be appropriate.
Tyman plc142 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
Key audit matter How our audit addressed the key audit matter
Inventory valuation (Group)
Refer to note 13 to the financial statements.
The Group applies FIFO costing and achieves
this through a standard costing method adjusted
for capitalised purchase variances. Capitalised
variances are determined as the difference of
actual against standard purchase costs considering
as a basis the number of inventory turnover days.
Slow moving and obsolete provisions are based on
historical turnover.
The current year has seen an impact on the global
business operations in terms of increase of raw
material prices, shipping costs, labour costs (in
specific countries like the US) and supply chain
issues. These factors, along with the decision
for the Group to build up the inventory level at
year-end to prevent supply shortages during the
Chinese New Year, have contributed to a material
increase in inventory.
Considering these factors, there is a risk that
inventory costing and provisioning may be more
susceptible to material misstatement.
We considered the effects of the supply chain
disruption on the calculation of the inventory
reserve, as there can be items deemed obsolete or
slow moving under the current Group accounting
policy but for which the Company might have
already received specific orders.
We have performed a walkthrough of the costing and provisioning
processes for the components in scope;
We have obtained an understanding of how management accounts
for costs and where capitalised variances were material we tested:
• the standard costing through sample testing;
• the capitalised variances by reperforming the actual invoice cost
compared to the standard costing;
• the assumption made over stock turn and reperformed the
calculation to capitalise variances to reach a FIFO costing policy.
We have obtained an understanding of the application of the
provision policy and tested the ageing reports and mathematical
accuracy of the calculation.
We verified no manual adjustments have been made in respect
of the provision and determined this was in line with the Group
accounting policy.
We were satisfied with the costing methodology applied and
deemed reasonable the assumptions for the basis of the inventory
provisions.
We have considered management’s disclosures in respect to the
valuation of inventory to be appropriate.
Valuation of defined benefit pension
schemes (Group)
Refer to note 21 to the financial statements.
The Group’s principal defined benefit pension
schemes are operated in the US and Italy. The
US defined benefit schemes provide benefits to
members in the form of a guaranteed level of
pension payable for life, while the Italian schemes
relate to TFR termination obligations payable to
employees of the Group’s Italian operations.
The pension assets and liabilities are material
to the Group and consist of gross obligations of
£29.9m and gross plan assets of £25.9m as at 31
December 2021).
An inherent level of risk exists in the valuation of
the obligations as there are assumptions utilised
in the estimation process with respect to discount
rates, the number of employees, salaries, length
of service, mortality and demographic data.
Considering the nature of the Italian scheme
and the immaterial impact of the liability, we
determined the risk to relate to the US pension
assets and liabilities. We considered the magnitude
of the balances and changes in discount rates and
mortality rate assumption may have a material
effect on the Group’s financial position and there
is estimate and expertise involved in making the
assumptions.
We challenged the appropriateness of key assumptions supporting
the Group’s valuation of retirement benefit obligations, including
comparison of these assumptions with our internally developed
benchmarks. We have involved our own internal actuarial experts to
assess the appropriateness of management’s assumptions in relation
to mortality rates and discount rates.
We circularised fund managers and custodians to confirm the
existence of pension assets and performed independent valuation
procedures.
We reviewed trust deeds and communications to members to confirm
any changes to the pension schemes.
We are satisfied these assumptions used are appropriate.
We have considered management’s disclosures in respect to the
valuation of defined benefit obligations to be appropriate.
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Key audit matter How our audit addressed the key audit matter
Recoverable amount of investments in
subsidiaries and affiliates (parent)
Refer to note 4 to the Company financial
statements.
There are £345.8 million of investments in
subsidiaries recognised on the Company balance
sheet.
In line with IAS 36, the carrying amounts of the
Company’s investments are reviewed at each
reporting date to determine whether there is an
indication of impairment
An impairment review using a value in use
calculation has been performed by management
for each investment . We focused on these
balances as the models applied in determining
the recoverable amount require the use of
assumptions over which there is a degree of
judgement, including short-term and long-term
growth assumptions, discount rates, and other
judgmental cash flows, which all increase the risk
of error.
We tested the appropriateness and reasonableness of the model, key
assumptions and sensitivities.
We identified and tested significant assumptions to third party
industry information or other external data, as applicable.
We used our internal valuation experts to assess the discount and
long-term growth rates applied in management’s calculations.
We considered the impacts of climate change risk assessment in
relation to the assumptions supporting the recoverability assessment.
We considered the outturn of significant estimates from last year to
assess management’s forecasting accuracy.
We are satisfied the assumptions used in the recoverability
assessment are appropriate and that no impairment exists.
We have considered management’s disclosures in respect to the
valuation of the investments in subsidiaries and affiliates to be
appropriate.
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 structured along three divisions being Tyman North America,
Tyman UK & Ireland and Tyman International, along with centralised functions covering Group treasury and central costs.
The Group financial statements are a consolidation of 77 reporting units for the Group’s operating businesses, which map
into the three divisions and centralised functions. Of the Group’s 77 reporting units, we identified 10 which, in our view,
required an audit of their complete financial information, due to their size. The units were based in the United Kingdom
(UK), the United States (US), and Italy. Specific audit procedures on certain balances and classes of transactions were
performed at a further 9 reporting units, as while overall the units were not financially significant, certain classes of
transactions and balances were material or considered to be higher risk, including cost of sales, interest, loans, cash,
inventory, accounts payable, pension liabilities and property, plant and equipment.
In establishing the overall approach to the Group audit, we determined the type of work that needed to be performed at
each of the reporting units either by us, as the Group engagement team, or the component auditors in the US or Italy
operating under our instruction. Where work was performed by the US and Italian component auditors, the UK engagement
leader and senior manager were in regular contact with the teams via video calls, reviewed audit work papers with
specific focus related to significant and elevated risks and key estimates, and participated in the US and Italian component
clearance meetings. 81% of the Group’s revenue and 79% of the Group’s adjusted operating profit is accounted for by the
10 reporting units where we performed full scope audit work on the complete financial information.
Tyman plc144 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
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 £4,000,000 (2020: £4,100,000). £3,300,000 (2020: £3,700,000).
How we
determined it
4.5% of adjusted operating profit 1% of total assets (capped as
a proportion of Group overall
materiality)
Rationale for
benchmark applied
Adjusted operating profit is the key measure used
internally by management in assessing the performance
of the Group, externally by analysts, and is the measure
disclosed as a key performance indicator in the Annual
Report. This measure provides us with a consistent year
on year basis for determining materiality based on trading
performance and eliminates the impact of non-recurring
items. Adjusted operating profit excludes amortisation
of acquired intangible assets, impairment of goodwill and
acquired intangible assets, and exceptional items.
The Company is predominantly an
investment holding Company and
therefore total assets is deemed
the most appropriate 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 from £163,000 to £3,500,000. 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% (2020: 75%%) of overall materiality,
amounting to £3,000,000 (2020: £3,100,000) for the Group financial statements and £2,475,000 (2020: £2,800,000) for
the Company financial statements.
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 £200,000 (Group audit) (2020: £195,000) and £165,000 (Company audit) (2020: £185,000) 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:
• Assessing the appropriateness of the Group’s cash flow, liquidity and gearing covenant forecasts in the context of the
Group’s 2021 financial position. In assessing this we considered the current trends of supply chain and raw material
costs, external construction industry outlook reports and economic growth forecasts, as these were good indicators to
support management’s forecast assumptions. We have also considered the effects of Covid-19 and determined this to
have no significant impacts.;
• Understanding and assessing the appropriateness of the key assumptions used both in the base case and in the
severe but plausible downside scenario, including assessing whether we considered the downside sensitivities to be
appropriately severe;
• Corroborating key assumptions to underlying documentation and ensured this was consistent with our audit work in
these areas;
• Testing the mathematical accuracy of management’s cash flow models;
• Considering the historical accuracy of management’s forecasting; and
• Reviewing the disclosures provided relating to the going concern basis of preparation.
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.
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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 Governance 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 Governance 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
Governance and Directors’ report for the year ended 31 December 2021 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 Governance and Directors’ report.
Directors’ Remuneration
In our opinion, the part of the Remuneration report to be audited has been properly prepared in accordance with the
Companies Act 2006.
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.
Tyman plc146 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
Our review of the Directors’ statement regarding the longer-term viability of the Group 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 Directors’ responsibilities statement, 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 the principal risks of non-compliance with laws
and regulations related to breaches in health and safety regulations and employment law, 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 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
revenue and management bias in accounting estimates. 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. Audit
procedures performed by the Group engagement team and/or component auditors included:
• Discussions with management including consideration of known or suspected instances of non-compliance with laws and
regulation.
• Evaluating management’s controls designed to prevent and detect irregularities.
• Identifying and testing journals, in particular journal entries posted with unusual account combinations or with unusual
descriptions.
• Challenging assumptions and judgements made by management in their significant accounting estimates including the
key audit matters described in this report.
• Assessing matters reported on the entity’s whistleblowing helpline.
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.
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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 Directors’ remuneration 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 members on 1 May 2012 to
audit the financial statements for the year ended 31 December 2012 and subsequent financial periods. The period of total
uninterrupted engagement is 10 years, covering the years ended 31 December 2012 to 31 December 2021.
Other matter
As required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these financial
statements 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 has been prepared using the single electronic format specified in the
ESEF RTS.
Richard Porter
(Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
3 March 2022
Tyman plc148 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
Consolidated income statement
For the year ended 31 December 2021
Note
2021
£’m
2020
£’m
Revenue 3 635.7 572.8
Cost of sales 3 (424.0 ) (380.7 )
Gross profit 211.7 192.1
Selling, general and administrative expenses (138.6 ) (132.4 )
Operating profit 4 73.1 59.7
Analysed as:
Adjusted1 operating profit 3 90.0 80.3
Exceptional items 6 0.6 (1.8 )
Amortisation of acquired intangible assets 10 (17.5 ) (18.8 )
Operating profit 73.1 59.7
Finance income 7 – 0.3
Finance costs 7 (9.1 ) (12.4 )
Net finance costs 7 (9.1 ) (12.1 )
Profit before taxation 3 64.0 47.6
Income tax charge 8 (14.4 ) (10.4 )
Profit for the year 49.6 37.2
Basic earnings per share 9 25.4 p 19.1 p
Diluted earnings per share 9 25.3 p 19.0 p
Non-GAAP alternative performance measures
1
Adjusted1 operating profit 90.0 80.3
Adjusted2 profit before taxation 9 81.5 68.4
Basic Adjusted earnings per share2 9 32.1 p 27.2 p
Diluted Adjusted earnings per share2 9 32.0 p 27.1 p
1
Before amortisation of acquired intangible assets, impairment of goodwill and acquired intangible assets, and exceptional items. See
Alternative Performance Measures on pages 203 to 208.
2
Before amortisation of acquired intangible assets, impairment of goodwill and acquired intangible assets, exceptional items, unwinding
of discount on provisions, gains and losses on the fair value of derivative financial instruments, amortisation of borrowing costs and the
associated tax effect. See Alternative Performance Measures on pages 203 to 208.
The notes on pages 154 to 196 are an integral part of these consolidated financial statements.
Annual Report and Accounts 2021 Tyman plc 149
Consolidated statement of comprehensive income
For the year ended 31 December 2021
Note
2021
£’m
2020
£’m
Profit for the year 49.6 37.2
Other comprehensive income/(expense)
Items that will not be reclassified to profit or loss
Remeasurements of post-employment benefit obligations 21 1.6 1.4
Total items that will not be reclassified to profit or loss 1.6 1.4
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations 2.4 (12.7 )
Effective portion of changes in value of cash flow hedges 17 – 0.3
Total items that may be reclassified to profit or loss 2.4 (12.4 )
Other comprehensive income/(expense) for the year, net of tax 4.0 (11.0 )
Total comprehensive income for the year 53.6 26.2
Items in the statement above are disclosed net of tax. The income tax relating to each component of other comprehensive
income is disclosed in note 8.
The notes on pages 154 to 196 are an integral part of these consolidated financial statements.
Tyman plc150 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
Consolidated statement of changes in equity
For the year ended 31 December 2021
Note
Share
capital
£’m
Treasury
reserve
£’m
Hedging
reserve
£’m
Translation
reserve
£’m
Retained
earnings
£’m
Total
equity
£’m
At 1 January 2020 9.8 (4.3 ) (0.3 ) 59.5 351.6 416.3
Total comprehensive income/(expense) – – 0.3 (12.7 ) 38.6 26.2
Profit for the year – – – – 37.2 37.2
Other comprehensive income/(expense) – – 0.3 (12.7 ) 1.4 (11.0 )
Transactions with owners – 0.9 – – (0.3 ) 0.6
Share-based payments
1
23 – – – – 0.9 0.9
Issue of own shares from Employee
Benefit Trust – 1.2 – – (1.2 ) –
Purchase of own shares for Employee
Benefit Trust 23 – (0.3 ) – – – (0.3 )
At 31 December 2020 9.8 (3.4 ) – 46.8 389.9 443.1
Total comprehensive income – – – 2.4 51.2 53.6
Profit for the year – – – – 49.6 49.6
Other comprehensive income – – – 2.4 1.6 4.0
Transactions with owners – 0.8 – – (15.1 ) (14.3 )
Share-based payments
1
23 – – – – 1.6 1.6
Dividends paid 24 – – – – (15.6 ) (15.6 )
Issue of own shares from Employee
Benefit Trust – 1.1 – – (1.1 ) –
Purchase of own shares for Employee
Benefit Trust 23 – (0.3 ) – – – (0.3 )
At 31 December 2021 9.8 (2.6 ) – 49.2 426.0 482.4
1
Share-based payments include a tax credit of £0.3 million (2020: tax credit of £0.2 million) and a release of the deferred share-based
payment bonus accrual of £0.3 million (2020: £0.6 million).
The notes on pages 154 to 196 are an integral part of these consolidated financial statements.
Annual Report and Accounts 2021 Tyman plc 151
Consolidated balance sheet
As at 31 December 2021
Note
2021
£’m
2020
£’m
TOTAL ASSETS
Non-current assets
Goodwill 10 363.3 361.9
Intangible assets 10 66.8 84.1
Property, plant and equipment 11 63.5 60.7
Right-of-use assets 12 52.0 51.8
Financial assets at fair value through profit or loss 14 1.1 1.1
Deferred tax assets 8 12.6 16.3
Current assets
Inventories 13 137.8 84.0
Trade and other receivables 14 81.0 72.8
Cash and cash equivalents 15 58.1 69.7
TOTAL ASSETS 836.2 802.4
LIABILITIES
Current liabilities
Trade and other payables 16 (112.8 ) (84.4 )
Derivative financial instruments 17 (0.3 ) (0.2 )
Borrowings 18 (0.1 ) (40.3 )
Lease liabilities 12 (6.0 ) (5.4 )
Current tax liabilities (6.0 ) (6.8 )
Provisions 20 (1.4 ) (1.3 )
(126.6 ) (138.4 )
Non-current liabilities
Borrowings 18 (149.0 ) (128.8 )
Lease liabilities 12 (48.8 ) (48.4 )
Deferred tax liabilities 8 (20.5 ) (26.8 )
Retirement benefit obligations 21 (4.0 ) (8.9 )
Provisions 20 (4.8 ) (7.6 )
Other payables 16 (0.1 ) (0.4 )
(227.2 ) (220.9 )
TOTAL LIABILITIES (353.8 ) (359.3 )
NET ASSETS 482.4 443.1
EQUITY
Capital and reserves attributable to owners of the Company
Share capital 22 9.8 9.8
Treasury reserve (2.6 ) (3.4 )
Translation reserve 49.2 46.8
Retained earnings 426.0 389.9
TOTAL EQUITY 482.4 443.1
The notes on pages 154 to 196 are an integral part of these consolidated financial statements.
The financial statements on pages 149 to 153 were approved by the Board on 3 March 2022 and signed on its behalf by:
Jo Hallas Jason Ashton
Chief Executive Officer Chief Financial Officer
Tyman plc
Company registration number: 02806007
Tyman plc152 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
Consolidated cash flow statement
For the year ended 31 December 2021
Note
2021
£’m
2020
£’m
Cash flow from operating activities
Profit before taxation 3 64.0 47.6
Adjustments 25 47.4 55.9
Changes in working capital1:
Inventories (54.0 ) 3.3
Trade and other receivables (9.1 ) 1.7
Trade and other payables 29.2 3.3
Provisions utilised – (0.4 )
Pension contributions (2.8 ) (1.7 )
Income tax paid (17.7 ) (13.8 )
Net cash generated from operations 57.0 95.9
Cash flow from investing activities
Purchases of property, plant and equipment 11 (16.1 ) (9.9 )
Purchases of intangible assets 10 (4.5 ) (0.6 )
Proceeds on disposal of property, plant and equipment 0.8 –
Acquisitions of subsidiary undertakings, net of cash acquired – (1.5 )
Net cash used in investing activities (19.8 ) (12.0 )
Cash flow from financing activities
Interest paid (8.8 ) (12.5 )
Dividends paid 24 (15.6 ) –
Purchase of own shares for Employee Benefit Trust (0.3 ) (0.3 )
Proceeds from drawdown of borrowings 40.0 91.6
Repayments of borrowings (57.8 ) (135.7 )
Principal element of lease payments (6.2 ) (6.4 )
Net cash used in financing activities (48.7 ) (63.3 )
Net (decrease)/increase in cash and cash equivalents (11.5 ) 20.6
Exchange (losses)/gains on cash and cash equivalents (0.1 ) 0.1
Cash and cash equivalents at the beginning of the year 69.7 49.0
Cash and cash equivalents at the end of the year 58.1 69.7
1
Excluding the effects of exchange differences on consolidation.
The notes on pages 154 to 196 are an integral part of these consolidated financial statements.
Annual Report and Accounts 2021 Tyman plc 153
Notes to the financial statements
For the y ear ended 31 December 2021
1. General information
Tyman plc is a leading international supplier of engineered fenestration and access solutions to the construction industry.
The Group designs and manufactures products that enhance the comfort, sustainability, security, safety and aesthetics of
residential homes and commercial buildings. Tyman serves its markets through three regional divisions. Headquartered in
2. Accounting policies and basis of preparation
The accounting policies in this section relate to the financial statements in their entirety. Accounting policies, including
critical accounting judgements and estimates used in the preparation of the financial statements, that relate to a particular
note are described in the specific note to which they relate. The accounting policies have been consistently applied to all the
years presented, unless otherwise stated.
2.1 Basis of preparation
On 31 December 2020, IFRS as adopted by the European Union at that date was brought into UK law and became UK-
adopted International Accounting Standards, with future changes being subject to endorsement by the UK Endorsement
Board. T yman plc transitioned to UK-adopted International Accounting Standards in its Group financial statements on
1 January 2021. This change constitutes a change in accounting framework. However, there is no impact on recognition,
measurement or disclosure in the period reported as a result of the change in framework.
The consolidated financial statements of T yman plc have been prepared in accordance with the UK-adopted International
Accounting Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under
those standards.
The consolidated financial statements have been prepared on a historical cost basis, except for items that are required by
IFRS to be measured at fair value, principally certain financial instruments.
2.2 Going concern
The Group’s business activities, financial performance and position, together with factors likely to affect its future
development and performance, are described in the Chief Executive Officer’s review on pages 32 and 33. Changes to
principal risks and uncertainties are described on pages 84 to 91.
As at 31 December 2021, the Group had cash and cash equivalents of £58.1 million and an undrawn RCF available of
£123.6 million, giving liquidity headroom of £180.8 million. The Group also has potential access to an uncommitted
accordion facility of £70 million.
The Group is subject to leverage and interest cover covenants tested in June and December and had significant headroom
on both covenants at 31 December 2021, with £79.8 million (77.8%) of EBITDA headroom on the leverage covenant and
£79.2 million (77.2%) of EBITDA headroom on the interest cover covenant.
The Group has performed an assessment of going concern through modelling several scenarios. The base case scenario
reflects the budget for 2022 and the strategic plan financials for 2023. A severe but plausible downside scenario has also
been modelled, which assumes a deterioration in revenue from the base case of 10%. This reflects the risks arising from
ongoing supply chain disruption, ability to continue passing on price increases to customers and market uncertainty. This
scenario also includes some level of remedial actions to preserve cash flow in the event of performance downgrades,
however, there are further cost mitigating actions that could be taken by management in the event this became necessary.
In all scenarios modelled, the Group would retain significant liquidity and covenant headroom throughout the going concern
period.
Reverse stress-testing has also been performed to model a scenario which would result in elimination of covenant
headroom within the going concern assessment period. Revenue would need to decrease significantly, to an extent not
considered plausible, for the covenants to be breached. This scenario was considered highly unlikely.
Having reviewed the various scenario models, available liquidity and taking into account current trading, the Directors are
satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of not less
than twelve months from the date of this report. Accordingly, the consolidated and Company financial information has been
prepared on a going concern basis.
The Group’s viability statement is set out on pages 78 and 79 of the Annual Report and Accounts.
Tyman plc154 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
2. Accounting policies and basis of preparation continued
2.3 Accounting judgements and estimates
The preparation of financial statements requires management to exercise judgement in applying the Group’s accounting
policies. It also requires the use of certain critical accounting estimates and assumptions that affect the reported amounts
of assets, liabilities, income and expenses. Actual results may differ from these estimates. 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 and in any affected future periods.
There are no areas representing the critical judgements made by management in the preparation of the Group’s financial
statements
The areas involving key assumptions concerning the future and other key sources of estimation uncertainty that are
significant to the financial statements are listed below and in more detail in the related notes:
• going concern assessment (note 2.2);
• the carrying amount of goodwill and intangible assets (note 10);
• provisions (note 20);
• defined benefit pension and post-retirement benefit schemes (note 21)
In addition, although not considered critical judgements or key sources of estimation uncertainty, the following areas
involve estimates or judgements in applying the Group’s accounting policies:
Estimates
• Inventory (note 13)
• Trade receivables (note 14)
• Taxation (note 8)
Judgements
• APMs and exceptional items (note 6)
• Lease extension and termination options (note 12)
2.4 Changes in accounting policies and disclosures
2.4.1 New, revised and amended standards and interpretations adopted by the Group
The accounting standards and interpretations that became applicable in the year did not materially impact the Group’s
accounting policies and did not require retrospective adjustments.
IFRS IC agenda decision – Configuration and Customisation Costs in a Cloud Computing Arrangement
(IAS 38 Intangible Assets)
The March 2021, IFRS IC update included an agenda decision on accounting for Configuration and Customisation (“CC”)
costs in a Cloud Computing Arrangement under IAS 38. This decision clarifies the steps that entities should consider in
accounting for CC in Software as a Service (“SaaS”) arrangements. This means that implementation costs that would
previously have been capitalised as part of an intangible asset and amortised over its useful life may need to be expensed
immediately as incurred. As this is an agenda decision item, it is effective immediately and must be retrospectively applied.
The Group has evaluated the impact of this on the carrying value of intangible assets related to current and previous
software implementations. All material current and previous system implementations are “on-premise” arrangements rather
than SaaS arrangements and, therefore, the agenda decision does not apply to these. The total value of implementation
costs associated with SaaS arrangements, all of which were incurred during 2021, was £0.3 million. These costs were
expensed to the income statement as incurred. Adjusted operating profit in 2021 was, therefore, £0.3 million less than it
would have been prior to this decision agenda. This is a timing difference only and will reduce the amortisation charge in
future years. There is no impact on cash flows. This may impact the timing of future expenses associated with future SaaS
implementations as the Group embarks on a multi-year programme of system upgrades.
Interest Rate Benchmark Reform – phase 2 – amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
LIBOR regulators (including the UK Financial Conduct Authority and the US Commodity Futures Trading Commission) have
commenced a transition away from LIBOR towards alternative risk-free rates (“RFR”). Consequently, the IASB has issued
amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 that address issues arising during the reform of benchmark
interest rates including the replacement of one benchmark rate with an alternative one.
In March 2021, the FCA and ICE Benchmark Administration (the administrator of LIBOR) announced that sterling, euro,
Swiss franc and Japanese yen LIBOR panels, as well as panels for one-week and two-month US dollar LIBOR, will cease at
the end of 2021, with the remaining US dollar LIBOR panels ceasing at the end of June 2023. In September 2021, the FCA
announced that to ensure an orderly wind-down, it would require the LIBOR benchmark administrator to continue to publish
these settings under a “synthetic” methodology, based on term risk-free rates, for the duration of 2022 for use with legacy
contracts.
Annual Report and Accounts 2021 Tyman plc 155
Notes to the financial statements continued
For the year ended 31 December 2021
2. Accounting policies and basis of preparation continued
The interest rates under the Group’s RCF facility are floating rates based on LIBOR plus a margin. An amendment to the
facility agreement was signed in January 2022 to facilitate the transition to new benchmark RFRs. Any existing sterling
drawdowns will continue to use LIBOR rates until their maturity. For new drawdowns in sterling, the rates will transition to
the Sterling Overnight Index Average (“SONIA”) rate. The new benchmark rates for US dollar and euro borrowings have not
yet been amended and LIBOR rates for these currencies will continue to be applied until such time as new rates are agreed.
On transition to the new rates, the Group will apply the Phase 2 amendments practical expedient to account for the change
in the basis for determining contractual cash flows as a result of interest rate benchmark reform. This means the Group
will account for these changes by updating the effective interest rate using the guidance in paragraph B5.4.5 of IFRS 9
without the recognition of an immediate gain or loss. This practical expedient applies as the change is necessary as a direct
consequence of interest rate benchmark reform, and the new basis is economically equivalent to the previous basis.
The Group does not have any material lease or other agreements with variable payments linked to IBOR and, therefore,
there is no impact on the Group’s other contractual arrangements.
2.4.2 New, revised and amended accounting standards not yet adopted
Certain new accounting standards, amendments to accounting standards and interpretations have been published that are
not mandatory for 31 December 2021 reporting periods and have not been early adopted by the Group. These standards,
amendments or interpretations are not expected to have a material impact on the Group in the current or future reporting
periods and on foreseeable future transactions.
2.4.3 Other changes to accounting policies
There are no further changes to accounting policies.
2.5 Consolidation
Subsidiaries are entities that are directly or indirectly controlled by the Group. Control exists when 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 over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They
are deconsolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains and losses on transactions between Group companies are
eliminated. Unrealised losses are also eliminated. Where necessary, amounts reported by subsidiaries have been adjusted
to conform to the Group’s accounting policies.
2.6 Foreign exchange
2.6.1 Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (the functional currency). The consolidated financial statements are
presented in sterling, which is the functional currency of the Company and the presentation currency of the Group.
2.6.2 Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised
in the income statement, except when deferred in other comprehensive income as qualifying cash flow hedges and
qualifying net investment hedges. Other than the ineffective element, these are recognised directly in equity until the
disposal of the net investment, at which time they are recognised in the income statement.
2.6.3 Group companies
On consolidation, assets and liabilities of Group companies denominated in foreign currencies are translated into sterling
at the exchange rate prevailing at the balance sheet date. Income and expense items are translated into sterling at the
average rates throughout the year.
Exchange differences arising on the translation of opening net assets of Group companies, together with differences arising
from the translation of the net results at average or actual rates to the exchange rate prevailing at the balance sheet date,
are taken to other comprehensive income. On disposal of a foreign entity, the cumulative translation differences recognised
in other comprehensive income relating to that particular foreign operation are recognised in the income statement as part
of the gain or loss on disposal.
2.7 Revenue recognition
The Group derives revenue solely from the sale of goods to customers. This revenue recognition policy applies to all product
types and sales channels. Revenue from the sale of goods is recognised when control of the goods has been transferred
to the buyer. Control transfers when the customer has the ability to direct the use of and obtain substantially all of the
benefits of the goods. This is either on dispatch of the goods or on receipt of goods by the customer, depending on the
terms of shipment.
Tyman plc156 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
2. Accounting policies and basis of preparation continued
Where the Group is responsible for arranging shipping services, an evaluation is made to determine whether the shipping
services are a separate performance obligation. Where these are considered to be a separate performance obligation, the
revenue recognition criteria are applied to the performance obligations of sale of goods and shipping services separately.
Revenue is allocated to each performance obligation based on its standalone selling price.
The Group is considered to be acting as the principal in shipping arrangements when it has discretion over setting prices,
has primary responsibility for fulfilling the obligation, and retains inventory risk. In these circumstances, the cost of freight
to customers is considered a distribution expense. The cost of freight is recorded within selling, general and administrative
expenses.
Revenue is measured at the fair value of the consideration received or receivable. Revenue represents the amounts
receivable for goods supplied, stated net of discounts, returns, rebates and value-added taxes. Where customers have
a right to return goods, a refund liability is recognised (included in trade and other payables) for the expected value of
refunds to be provided to customers. A corresponding contract asset is recognised reflecting the value of goods expected to
be returned (included in other receivables).
Accumulated experience is used to estimate and provide for rebates, discounts, and expected returns using the expected
value method, and revenue is only recognised to the extent that it is highly probable that a significant reversal will
not occur.
Incremental costs of obtaining a contract, such as sales commissions, are expensed as incurred, as the period over which
the Group obtains benefit from these is less than twelve months.
3. Segment reporting
3.1 Accounting policy
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating
Decision Maker. The Chief Operating Decision Maker, defined as the Board of Directors of the Group, is responsible for
allocating resources and assessing performance of the operating segments.
3.2 Segment information
The reporting segments reflect the manner in which performance is evaluated and resources are allocated. The Group
operates through three clearly defined divisions: Tyman North America, Tyman UK & Ireland and Tyman International.
North America comprises all the Group’s operations within the US, Canada and Mexico. UK & Ireland comprises the Group’s
UK and Ireland hardware business, together with Access 360 and Tyman Sourcing Asia. International comprises the Group’s
remaining businesses outside the US, Canada, Mexico and the UK (although includes the two UK seal manufacturing
plants). Centrally incurred functional costs that are directly attributable to a division are allocated or recharged to the
division. All other centrally incurred costs and eliminations are disclosed as a separate line item in the segment analysis.
Each reporting segment broadly represents the Group’s geographical focus, being the North American, UK & Ireland and
International operations respectively. In the opinion of the Board, there is no material difference between the Group’s
operating segments and segments based on geographical splits. Accordingly, the Board does not consider geographically-
defined segments to be reportable. For completeness, the Group discloses certain financial data for business carried on in
the UK that is not accounted for in Tyman UK & Ireland in notes 3.2.1 and 3.2.4.
The following tables present Group revenue and profit information for the Group’s reporting segments, which have been
generated using the Group accounting policies, with no differences of measurement applied, other than those noted above.
3.2.1 Revenue
2021 2020
Segment
revenue
£’m
Inter-
segment
revenue
£’m
External
revenue
£’m
Segment
revenue
£’m
Inter-
segment
revenue
£’m
External
revenue
£’m
North America 400.5 (2.8) 397.7 374.8 (2.7) 372.1
UK & Ireland 106.2 (0.4) 105.8 92.8 (0.6) 92.2
International 135.2 (3.0) 132.2 110.9 (2.4) 108.5
Total revenue 641.9 (6.2) 635.7 578.5 (5.7) 572.8
Included within the Tyman International segment is revenue attributable to the UK of £22.3 million (2020: £17.2 million).
There are no single customers which account for greater than 10% of total revenue.
Annual Report and Accounts 2021 Tyman plc 157
Notes to the financial statements continued
For the year ended 31 December 2021
3. Segment reporting continued
3.2.2 Profit before taxation
Note
2021
£’m
2020
£’m
North America 65.1 64.5
UK & Ireland 14.8 8.8
International 19.5 12.3
Operating segment profit 99.4 85.6
Centrally incurred costs (9.4) (5.3)
Adjusted operating profit 90.0 80.3
Exceptional items 6 0.6 (1.8)
Amortisation of acquired intangible assets 10 (17.5) (18.8)
Operating profit 73.1 59.7
Net finance costs 7 (9.1) (12.1)
Profit before taxation 64.0 47.6
3.2.3 Operating profit disclosures
Cost of sales Depreciation Amortisation
2021
£’m
2020
£’m
2021
£’m
2020
£’m
2021
£’m
2020
£’m
North America (280.0) (258.5) (11.8) (12.8) (12.3) (13.7)
UK & Ireland (67.5) (58.6) (2.0) (2.5) (3.2) (3.4)
International (76.5) (63.6) (4.5) (5.1) (3.1) (3.2)
Unallocated – – (0.2) – (0.2) –
Total (424.0) (380.7) (18.5) (20.4) (18.8) (20.3)
3.2.4 Segment assets and liabilities
Segment assets Segment liabilities
1
Non-current assets
2
2021
£’m
2020
£’m
2021
£’m
2020
£’m
2021
£’m
2020
£’m
North America 540.8 507.0 (134.0) (133.5) 384.5 389.6
UK & Ireland 141.5 134.2 (39.7) (33.1) 81.4 85.3
International 153.4 155.9 (52.3) (61.1) 80.3 84.0
Unallocated 2.2 5.3 (129.5) (131.6) 0.5 0.7
Total 837.9 802.4 (355.5) (359.3) 546.7 559.6
1
Included within unallocated segment liabilities are centrally held borrowings of £125.8 million (2020: £129.1 million), provisions of
£0.4 million (2020: £0.4 million) and other liabilities of £3.0 million (2020: £2.1 million). Where borrowings can be directly attributed to
segments, these have been allocated.
2
Non-current assets exclude amounts relating to deferred tax assets.
Non-current assets of the International segment include £17.6 million (2020: £14.3 million) attributable to the UK.
3.2.5 Capital expenditure
Property, plant
and equipment Intangible assets
2021
£’m
2020
£’m
2021
£’m
2020
£’m
North America 8.5 7.7 4.0 –
UK & Ireland 0.5 0.3 0.3 –
International 7.0 1.9 0.2 0.6
Total 16.0 9.9 4.5 0.6
Tyman plc158 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
3. Segment reporting continued
3.2.6 Other disclosures
Goodwill Intangible assets
Retirement benefit
obligations
2021
£’m
2020
£’m
2021
£’m
2020
£’m
2021
£’m
2020
£’m
North America 268.5 265.6 43.6 53.6 (0.8) (5.2)
UK & Ireland 60.2 60.2 4.7 7.9 – –
International 34.6 36.1 18.5 22.6 (3.2) (3.7)
Total 363.3 361.9 66.8 84.1 (4.0) (8.9)
4. Operating profit
Operating profit is stated after charging the following:
Note
2021
£’m
2020
£’m
Depreciation of property, plant and equipment 11 (11.5) (12.7)
Depreciation of right-of-use assets 12 (7.0) (7.7)
Amortisation of acquired intangible assets 10 (17.5) (18.8)
Amortisation of other intangible assets 10 (1.3) (1.5)
Impairment of other intangible assets 10 (1.9) –
Foreign exchange loss (1.0) (1.3)
Employee costs 5 (152.7) (138.3)
Analysis of auditors’ remuneration:
2021
£’m
2020
£’m
Audit of Parent Company and consolidated financial statements (0.3) (0.3)
Audit of subsidiaries (0.7) (0.6)
Total audit (1.0) (0.9)
Audit-related assurance services (0.1) (0.1)
Total fees (1.1) (1.0)
Total audit fees (1.0) (0.9)
Total non-audit fees (0.1) (0.1)
Total fees (1.1) (1.0)
Audit-related assurance services were primarily in respect of the interim review.
5. Employees and employee costs
5.1 Accounting policy
5.1.1 Wages and salaries
Wages and salaries are recognised in the income statement as the employees’ services are rendered.
5.1.2 Termination benefits
Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or
whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination
benefits at the earlier of the following dates:
• when the Group can no longer withdraw the offer of those benefits; and
• when the entity recognises costs for a restructuring that is within the scope of IAS 37 and involves the payment of
termination benefits.
In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the
number of employees expected to accept the offer. Benefits falling due more than twelve months after the end of the
reporting period are discounted to their present value.
Annual Report and Accounts 2021 Tyman plc 159
Notes to the financial statements continued
For the year ended 31 December 2021
5. Employees and employee costs continued
5.1.3 Bonus plans
The Group recognises a liability and an expense for bonuses based on the expected level of payment to employees in
respect of the relevant financial year. The Group recognises a provision where contractually obliged or where there is a past
practice that has created a constructive obligation.
5.1.4 Government grants
In the previous year, the Group utilised available government job retention schemes across various territories and the
amount of government support received outside of the United Kingdom in the year was £1.7 million. This was accounted
for as a government grant under IAS 20. As the grant was intended to cover employee costs, this was recognised in the
profit or loss within selling, general and administrative expenses, offsetting the related expense. There was no government
support received across the Group in 2021.
5.2 Number of employees
The average monthly number of employees during the financial year and total number of employees as at 31 December
2021 was:
Average Total
2021 2020 2021 2020
Administration 405 399 418 388
Operations 3,554 3,273 3,404 3,414
Sales 336 363 337 329
4,295 4,035 4,159 4,131
The analysis above includes Directors.
5.3 Employment costs
Employment costs of employees, including Directors’ remuneration, during the year were as follows:
Note
2021
£’m
2020
£’m
Wages and salaries (136.4) (124.8)
Social security costs (11.2) (10.8)
Share-based payments 23 (1.0) (0.1)
Pension costs – defined contribution schemes 21 (3.8) (3.6)
Pension costs – defined benefit schemes 21 (0.3) (0.7)
Government support income
1
– 1.7
(152.7) (138.3)
1
The government support income of £1.7 million in 2020 relates to government support received outside of the United Kingdom and was
accounted for as a government grant under IAS 20.
Details of Directors’ remuneration are set out in the Remuneration report on pages 114 to 137.
6. Exceptional items
6.1 Accounting policy
Where certain income or expense items recorded in the year are material, by their size or incidence, the Group presents
such items as exceptional within a separate line on the income statement, except for those exceptional items that relate
to net finance costs and tax. Separate presentation provides an improved understanding of the elements of financial
performance during the year to facilitate comparison with prior periods and to assess the underlying trends in financial
performance.
Exceptional items include one-off redundancy and restructuring costs, transaction costs and integration costs associated
with merger and acquisition activity, as well as credits relating to profit on disposal of businesses, and property provision
releases.
The Group aims to be both consistent and clear in its recognition and disclosure of exceptional gains and losses.
Management judgement is required in assessing the nature and amounts of transactions that satisfy the conditions for
classification as an exceptional item.
Tyman plc160 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
6. Exceptional items continued
6.2 Exceptional items
2021
£’m
2020
£’m
Footprint restructuring – credit 0.3 0.2
M&A and integration – costs – (0.8)
M&A and integration – credits 0.6 0.6
M&A and integration – net 0.6 (0.2)
Loss on disposal of business – (1.8)
Impairment charge (1.9) –
Impairment credits 1.6 –
Impairment – net (0.3) –
0.6 (1.8)
Footprint restructuring
The footprint restructuring credit in the current and prior year corresponds to the release of excess provisions made relating
to the streamlining of the International footprint. The classification as exceptional is consistent with the original charge.
M&A and integration
The M&A credit in the current year relates to the release of provisions made as part of the business combination accounting
for previous acquisitions, which are no longer required. M&A and integration costs in the previous year relate to costs
associated with the integration of businesses acquired in 2018, predominantly Ashland.
Loss on disposal of business
The prior year charge relates to a loss on the disposal of the Ventrolla business, which was divested on 5 November 2020.
Impairment
The impairment charge in the current year relates to impairment of certain of the Group’s intangible assets following the
decision to commence a multi-year ERP upgrade. The impairment credit relates to the release of a portion of provisions
made in 2019 against inventory and other assets associated with the new door seals product in North America, which is no
longer required. The classification as exceptional is consistent with the original charge.
7. Finance income and costs
2021
£’m
2020
£’m
Finance income
Gain on revaluation of fair value hedge – 0.3
– 0.3
Finance costs
Interest payable on bank loans, private placement notes and overdrafts (5.9) (8.9)
Interest payable on leases (2.5) (2.8)
Amortisation of borrowing costs (0.5) (0.5)
Pension interest cost (0.1) (0.2)
Loss on revaluation of fair value hedge (0.1) –
(9.1) (12.4)
Net finance costs (9.1) (12.1)
Annual Report and Accounts 2021 Tyman plc 161
Notes to the financial statements continued
For the year ended 31 December 2021
8. Taxation
8.1 Accounting policy
The income tax charge comprises current and deferred tax. Tax is recognised in the income statement, except to the extent
that it relates to items recognised in other comprehensive income or directly in equity, in which case it is recognised in the
relevant statement.
The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted at the
balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements. No deferred tax liabilities are recognised if they arise from the
initial recognition of:
• goodwill; or
• an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates that have been enacted or substantively enacted at the balance sheet
date and are expected to apply when the related deferred income tax asset is realised or when the deferred income tax
liability is settled.
Deferred income tax liabilities are provided on taxable temporary differences arising on investments in subsidiaries, except
for deferred income tax liabilities, where the timing of the reversal of the temporary difference is controlled by the Group
and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available
against which the temporary differences can be utilised.
Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries,
only to the extent that it is probable the temporary difference will reverse in the future and there is sufficient taxable profit
against which the temporary difference can be utilised.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities, and where the deferred income tax assets and liabilities relate to income taxes levied by the
same taxation authority. Offset may be applied either within the same tax entity or different taxable entities where there is
an intention to settle tax balances on a net basis.
Estimation is required of temporary differences between the carrying amount of assets and liabilities and their tax base.
Deferred tax liabilities are recognised for all taxable temporary differences but, where deductible temporary differences
exist, management’s judgement is required as to whether a deferred tax asset should be recognised based on the
availability of future taxable profits. The deferred tax assets recoverable amount may differ from the amounts recognised if
actual taxable profits differ from management’s estimates.
The Group has made provisions for uncertain tax positions in accordance with IFRIC 23. At any point in time the Group has
open tax returns across the jurisdictions in which it operates that may give rise to different amounts of tax due. Judgement
is required in making an assessment of whether it is probable a tax authority will accept an uncertain tax treatment. If it
is not probable, the position will be accepted, estimation is required in making a provision using either the expected value
approach or the most likely outcome approach. The amounts at which tax liabilities are finally settled may differ from the
amounts provided.
Tyman plc162 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
8. Taxation continued
8.2 Taxation – income statement and other comprehensive income
8.2.1 Tax on profit
Note
2021
£’m
2020
£’m
Current taxation
Current tax on profit for the year (18.8) (15.5)
Prior year adjustments 1.5 1.4
Total current taxation (17.3) (14.1)
Deferred taxation
Origination and reversal of temporary differences 2.2 3.6
Rate change adjustment 0.4 0.1
Prior year adjustments 0.3 –
Total deferred taxation 8.3 2.9 3.7
Income tax charge in the income statement (14.4) (10.4)
Total (charge)/credit relating to components of other comprehensive income
Current tax charge on translation – (0.2)
Current tax credit on share-based payments 0.1 0.1
Deferred tax (charge)/credit on actuarial gains and losses 8.3 (0.5) 0.1
Deferred tax credit on share-based payments 8.3 0.2 0.1
Deferred tax charge on translation 8.3 (0.1) (0.2)
Income tax charge in the statement of other comprehensive income (0.3) (0.1)
Total current taxation (17.2) (14.2)
Total deferred taxation 2.5 3.7
Total taxation (14.7) (10.5)
The Group’s UK profits for this financial year are taxed at the statutory rate of 19.0% (2020: 19.0%). The deferred tax
balances have been measured using the applicable enacted rates. In the UK, legislation to increase the standard rate of
corporation tax to 25% from 1 April 2023 was enacted in the Finance Act 2021 on 10 June 2021, and consequently deferred
tax has been remeasured to reflect this.
Taxation for other jurisdictions is calculated at rates prevailing in those respective jurisdictions.
8.2.2 Reconciliation of the total tax charge
The tax assessed for the year differs from the standard rate of tax in the UK of 19.0% (2020: 19.0%). The differences are
explained below:
2021
£’m
2020
£’m
Profit before taxation 64.0 47.6
Profit before taxation multiplied by the standard rate of corporation tax in the UK of 19.0%
(2020: 19.0%) (12.2) (9.0)
Effects of:
Expenses not deductible for tax purposes (0.9) (0.1)
Overseas tax rate differences (3.5) (2.8)
Rate change adjustment 0.4 0.1
Prior year adjustments 1.8 1.4
Income tax charge in the income statement (14.4) (10.4)
Annual Report and Accounts 2021 Tyman plc 163
Notes to the financial statements continued
For the year ended 31 December 2021
8. Taxation continued
8.3 Taxation – balance sheet
The analysis of deferred tax assets and deferred tax liabilities is as follows:
2021
£’m
2020
£’m
Deferred tax assets 12.6 16.3
Deferred tax liabilities (20.5) (26.8)
Net deferred tax liabilities (7.9) (10.5)
The net movement in deferred tax is as follows:
Note
2021
£’m
2020
£’m
At 1 January (10.5) (14.1)
Income statement credit 8.2 2.5 3.6
Rate change adjustment 8.2 0.4 0.1
Tax charge relating to components of other comprehensive income 8.2 (0.4) –
Exchange difference 0.1 (0.1)
At 31 December (7.9) (10.5)
The movement in deferred tax assets and liabilities during the year is as follows:
Deferred tax assets
Accelerated
tax
depreciation
£’m
Post-
retirement
benefit
provisions
£’m
Purchased
goodwill
£’m
Other
timing
differences
£’m
Total
£’m
At 1 January 2020 0.7 2.0 5.6 8.9 17.2
Income statement charge – (0.2) (0.4) (0.3) (0.9)
Rate change adjustment – – – 0.1 0.1
Tax (charge)/credit relating to components of other
comprehensive income – (0.3) – 0.3 –
Exchange difference – – – (0.1) (0.1)
At 31 December 2020 0.7 1.5 5.2 8.9 16.3
Income statement charge (0.8) (0.7) (1.5) (0.6) (3.6)
Rate change adjustment – – 0.3 0.1 0.4
Tax (charge)/credit relating to components of other
comprehensive income – (0.5) – 0.1 (0.4)
Exchange difference – – – (0.1) (0.1)
At 31 December 2021 (0.1) 0.3 4.0 8.4 12.6
Deferred tax liabilities
Accelerated
tax
depreciation
£’m
Intangible
assets on
acquisition
£’m
Other
timing
differences
£’m
Total
£’m
At 1 January 2020 (6.3) (21.6) (3.4) (31.3)
Income statement credit 0.7 3.8 – 4.5
Rate change adjustment – (0.2) 0.1 (0.1)
Exchange difference 0.2 – (0.1) 0.1
At 31 December 2020 (5.4) (18.0) (3.4) (26.8)
Income statement credit 0.9 3.8 1.3 6.0
Rate change adjustment – 0.2 (0.2) –
Exchange difference – 0.2 0.1 0.3
At 31 December 2021 (4.5) (13.8) (2.2) (20.5)
The deferred tax asset arises from temporary differences arising in various tax jurisdictions, predominantly the US and UK.
Given both recent and forecast trading, the Directors are of the opinion that the level of profits in the foreseeable future is
more likely than not to be sufficient to recover these assets.
Deferred tax liabilities of £14.0 million (2020: £19.2 million) are expected to fall due after more than one year and deferred
tax assets of £7.5 million (2020: £10.8 million) are expected to be recovered after more than one year.
Tyman plc164 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
8. Taxation continued
8.3.1 Factors that may affect future tax charges
The estimated tax losses within the Group are as follows:
Estimated tax losses:
Gross losses Tax effect of losses
2021
£’m
2020
£’m
2021
£’m
2020
£’m
Capital losses 3.3 3.3 (0.6) (0.6)
Trading losses 20.2 21.4 (5.4) (5.7)
23.5 24.7 (6.0) (6.3)
In accordance with the Group’s accounting policy, as the future use of these losses is uncertain none of these losses have
been recognised as a deferred tax asset.
An assessable temporary difference exists, but no deferred tax liability has been recognised because the Group is able to
control the timing of any distributions from these subsidiaries and hence any tax consequences that may arise.
On 25 April 2019, the European Commission published its final decision regarding its investigation into the UK CFC rules,
concluding that the exemption applied to income derived from UK activities constituted a breach of EU State Aid rules.
The Group had previously disclosed a contingent liability, but had not recognised a provision based on analysis performed
and the level of uncertainty in respect of the potential liability. On 29 June 2021, HMRC notified the Group that it had
concluded its review and determined that no State Aid had been provided. As such, there is no longer a contingent liability
at 31 December 2021.
9. Earnings per share
9.1 Non-GAAP Alternative Performance Measures accounting policy
The Directors believe that the adjusted profit and earnings per share measures provide additional useful information
to shareholders on the underlying performance of the business. These measures are consistent with how business
performance is measured internally. The adjusted profit before tax measure is not recognised under IFRS and may not be
comparable with adjusted profit measures used by other companies (see Alternative Performance Measures on pages 203
to 208).
9.2 Earnings per share
2021
£’m
2020
£’m
Profit for the year 49.6 37.2
Basic earnings per share (p) 25.4p 19.1p
Diluted earnings per share (p) 25.3p 19.0p
Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders by
the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders by the
weighted average number of ordinary shares outstanding during the year, plus the weighted average number of ordinary
shares that would be issued on the conversion of all the diluted potential ordinary shares into ordinary shares.
9.2.1 Weighted average number of shares
2021
’m
2020
’m
Weighted average number of shares (including treasury shares) 196.8 196.8
Treasury and Employee Benefit Trust shares (1.4) (1.7)
Weighted average number of shares – basic 195.4 195.1
Effect of dilutive potential ordinary shares – LTIP awards and options 0.7 0.7
Weighted average number of shares – diluted 196.1 195.8
Annual Report and Accounts 2021 Tyman plc 165
Notes to the financial statements continued
For the year ended 31 December 2021
9. Earnings per share continued
9.2.2 Non-GAAP Alternative Performance Measure: Adjusted earnings per share
The Group presents an adjusted earnings per share measure which excludes the impact of exceptional items, certain non-
cash finance costs, amortisation of acquired intangible assets and certain non-recurring items. Adjusted earnings per share
has been calculated using the adjusted profit before taxation and using the same weighted average number of shares in
issue as the earnings per share calculation. See Alternative Performance Measures on pages 203 to 208.
Adjusted profit after taxation is derived as follows:
2021
£’m
2020
£’m
Profit before taxation 64.0 47.6
Exceptional items (0.6) 1.8
Loss/(gain) on revaluation of fair value hedge 0.1 (0.3)
Amortisation of borrowing costs 0.5 0.5
Amortisation of acquired intangible assets 17.5 18.8
Adjusted profit before taxation 81.5 68.4
Income tax charge (14.4) (10.4)
Add back: Adjusted tax effect
1
(4.4) (4.9)
Adjusted profit after taxation 62.7 53.1
1
Tax effect of exceptional items, amortisation of borrowings costs, amortisation of acquired intangible assets, gain or loss on revaluation of
fair value hedge and unwinding of discount on provisions.
Adjusted earnings per share is summarised as follows:
2021 2020
Basic adjusted earnings per share 32.1p 27.2p
Diluted adjusted earnings per share 32.0p 27.1p
10. Goodwill and intangible assets
10.1 Accounting policy
10.1.1 Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the
Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the CGUs that
are expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated
represents the lowest level within the entity, at which the goodwill is monitored for internal management purposes.
Goodwill is monitored at the operating segment level.
Goodwill impairment reviews are undertaken annually, or more frequently if events or changes in circumstances indicate
a potential impairment. The carrying amount of goodwill is compared to the recoverable amount, which is the higher of
value in use and the fair value less costs of disposal. Any impairment is recognised immediately as an expense and is not
subsequently reversed.
10.1.2 Intangible assets
Intangible assets are stated at cost less accumulated amortisation and impairment. On acquisition of businesses by the
Group, the Group recognises any separately identifiable intangible assets separately from goodwill, initially measuring the
intangible assets at fair value.
Purchased intangible assets acquired through a business combination, including purchased brands, customer relationships,
trademarks and licences, are initially measured at fair value and amortised on a straight-line basis over their estimated
useful economic lives as follows:
• Acquired brands – 5 to 20 years
• Customer relationships – 9 to 15 years
• Internally developed computer software – 5 to 10 years
• Purchased computer software – 3 to 4 years
Tyman plc166 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
10. Goodwill and intangible assets continued
Development costs that are directly attributable to the design and testing of identifiable and unique software products
controlled by the Group are recognised as intangible assets when the following criteria are met:
• it is technically feasible to complete the software product so that it will be available for use;
• management intends to complete the software product and use it or sell it;
• there is an ability to use or sell the software product;
• it can be demonstrated how the software product will generate probable future economic benefits;
• adequate technical, financial and other resources to complete the development and to use or sell the software product
are available; and
• the expenditure attributable to the software product during its development can be reliably measured.
Directly attributable costs capitalised as part of the software product include the software development employee costs
and an appropriate portion of relevant overheads. Other development expenditures that do not meet these criteria are
recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as
an asset in a subsequent period. Computer software development costs recognised as assets are amortised when the
intangible assets are in the location and condition necessary for it to be capable of operating in the manner intended
by management. Configuration and customisation costs associated with Software as a Services (“SaaS”) arrangements
are capitalised if they create an intangible asset that the Group controls. If these costs do not meet the definition of
an intangible asset, but are considered to be an integral part of the service provided by the software provider, they are
capitalised as a prepayment and expensed as the service is provided. In other cases, these costs are expensed as incurred.
The estimated useful lives of acquired intangible assets are reviewed whenever events or circumstances indicate that
there has been a change in the expected pattern of consumption of the future economic benefits embodied in the asset.
Any amendments to the estimated useful lives of intangible assets are recorded as a change in estimate in the period the
change occurred.
10.1.3 Impairment of goodwill and intangible assets
Intangible assets, including goodwill, that have an indefinite useful life or intangible assets not ready to use are not subject
to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment
whenever events or circumstances indicate that the carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount
is the higher of the asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels, for which, there are largely independent cash inflows. Prior impairments of
non-financial assets (other than goodwill) are reviewed for possible reversal at each reporting date. Goodwill previously
impaired cannot be reversed at a later date.
10.1.4 Critical accounting estimate: carrying amount of goodwill and intangibles
As at 31 December 2021, the Group had goodwill of £363.3 million (2020: £361.9 million) with intangible assets
amounting in total to £66.8 million (2020: £84.1 million). An impairment review using a value in use calculation has been
performed for each CGU. There is significant estimation involved in determining the appropriate assumptions to use in the
calculations, including the forecasted cash flows of each CGU and appropriate discount rates relative to the Company’s cost
of capital. These assumptions have been subjected to sensitivity analyses. Details of estimates used and sensitivities in the
impairment reviews are set out in this note.
10.2 Cash generating units
The Group’s CGUs have been defined as each of the Group’s three operating divisions. Each division has its own senior
management and leadership team, which holds the overall responsibility for the key decision making of each operating unit
within that division. In the opinion of the Directors, the divisions represent the smallest groups of assets that independently
generate cash flows for the Group. This conclusion is consistent with the approach adopted in previous years.
10.3 Carrying amount of goodwill
£’m
Net carrying value
At 1 January 2020 371.3
Exchange difference (9.4)
At 31 December 2020 361.9
Exchange difference 1.4
At 31 December 2021 363.3
Annual Report and Accounts 2021 Tyman plc 167
Notes to the financial statements continued
For the year ended 31 December 2021
10. Goodwill and intangible assets continued
Goodwill is monitored principally on an operating segment basis and the net book value of goodwill is allocated by CGU
as follows:
2021
£’m
2020
£’m
North America 268.5 265.6
UK & Ireland 60.2 60.2
International 34.6 36.1
363.3 361.9
10.3.1 Impairment tests for goodwill
The recoverable amounts of CGUs are determined from VIU calculations. VIU is determined by discounting the future pre-
tax cash flows generated from the continuing use of the CGU, using a pre-tax discount rate.
Assumptions
Cash flow projections
Cash flow projections, which have been reviewed and approved by the Board, are derived from the bottom-up budget for
2022 and the strategic plan for 2023–2024, extrapolated for a further two years at the estimated medium-term growth rate
for each CGU. The five-year cash flows were extrapolated using a long-term growth rate of 1.5% in order to calculate the
terminal recoverable amount.
Climate change
The Group has considered the potential impact of climate change on future cash flows and the terminal growth rate used
in the impairment test. This took into consideration the risks and opportunities identified in the TCFD disclosures outlined
in the sustainability report on pages 68 to 77, a qualitative assessment of the potential financial impact and mitigations
that could impact the impairment model, and the commitments made in the sustainability roadmap. The Group has not
identified any risks that have a significant financial impact that cannot reasonably be mitigated by activities already planned
or in many cases, already underway as part of the sustainability roadmap. There have been no factors identified that would
be expected to limit the useful lives of any major assets or parts of the business, which would suggest the current terminal
growth rate is not appropriate. There are also many opportunities presented by climate change, the benefit of which is
expected to offset the risks. The Group continues to work on quantifying the impact of risks and opportunities as part of the
TCFD work.
Discount rates
Discount rates are estimated using pre-tax rates that reflect current market assessments of the time value of money and
the risk profiles of the CGUs.
The key assumptions used in the VIU calculations in each of the Group’s CGUs at 31 December are as follows:
Average pre-tax
discount rate
Average EBITDA margin:
years one to five
2021 2020 2021 2020
North America 12.7% 12.8% 21.9% 23.4%
UK & Ireland 11.2% 12.6% 15.7% 16.0%
International 14.4% 14.1% 20.2% 19.2%
Impairment review results: 2021
A review of the carrying amount of goodwill and intangible assets across the Group has been carried out at year end,
taking into account the current trading conditions and future prospects. The assumptions have been subjected to sensitivity
analyses, including sensitising revenue, gross margin and the discount rate. The annual impairment review did not result in
any impairment losses being recognised in 2021. Results are summarised as follows:
UK & Ireland: Relative to the base case scenario, revenue would need to decline by over 9% on average in each of the five
years from 2022 to 2026, to eliminate VIU headroom, or the average EBITDA margin for the next five years would need to
decrease from 15.7% to 11.1%, to reduce VIU headroom to zero. This is substantially lower than the 2021 EBITDA margin
in a year where input costs have increased significantly. This scenario is considered unlikely to occur given historic rates
and strategic initiatives in progress.
Tyman plc168 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
10. Goodwill and intangible assets continued
North America: Relative to the base case scenario, revenue would need to decline by over 9% on average in each of the
five years from 2022 to 2026, to eliminate VIU headroom, or the average EBITDA margin for the next five years would
need to decrease from 21.9% to 15.8%, to reduce VIU headroom to zero. Given the current trading performance and the
margin uplift potential of operational improvement activities, realisation of pricing benefits and stabilisation of cost inflation,
this scenario is felt unlikely to occur.
International: Relative to the base case scenario, revenue would need to decline by 15% on average in each of the five
years from 2022 to 2026, to eliminate VIU headroom, or the average EBITDA margin for the next five years would need to
decrease from 20.2% to 13.6% for the VIU headroom of the International division to reduce to zero. Given the strength in
underlying demand in the core International markets, the expected benefits from streamlining International operations and
growth from new product introductions, this is felt unlikely to occur.
10.4 Carrying amount of intangible assets
Note
Computer
software
£’m
Acquired
brands
£’m
Customer
relationships
£’m
Total
£’m
Cost
At 1 January 2020 13.2 86.5 258.1 357.8
Additions 0.6 – – 0.6
Disposals (0.4) – – (0.4)
Exchange difference (0.2) (0.7) (5.4) (6.3)
At 31 December 2020 13.2 85.8 252.7 351.7
Additions 4.4 0.1 – 4.5
Disposals (2.0) (3.0) – (5.0)
Exchange difference (0.1) (0.8) (0.2) (1.1)
At 31 December 2021 15.5 82.1 252.5 350.1
Accumulated amortisation
At 1 January 2020 (5.9) (52.5) (195.4) (253.8)
Amortisation charge for the year 4 (1.5) (5.7) (13.1) (20.3)
Disposals 0.2 – – 0.2
Exchange difference 0.1 0.8 5.4 6.3
At 31 December 2020 (7.1) (57.4) (203.1) (267.6)
Amortisation charge for the year 4 (1.3) (5.4) (12.1) (18.8)
Disposals 2.0 3.0 – 5.0
Impairment (1.9) – – (1.9)
Exchange difference (0.1) 0.4 (0.3) –
At 31 December 2021 (8.4) (59.4) (215.5) (283.3)
Net carrying value
At 1 January 2020 7.3 34.0 62.7 104.0
At 31 December 2020 6.1 28.4 49.6 84.1
At 31 December 2021 7.1 22.7 37.0 66.8
The amortisation charge for the year has been included in administrative expenses in the income statement and
comprises £17.5 million (2020: £18.8 million) relating to amortisation of acquired intangible assets and £1.3 million
(2020: £1.5 million) relating to amortisation of other intangible assets.
Annual Report and Accounts 2021 Tyman plc 169
Notes to the financial statements continued
For the year ended 31 December 2021
11. Property, plant and equipment
11.1 Accounting policy
Property, plant and equipment are stated at cost less accumulated depreciation and impairment. Cost includes expenditure
that is directly attributable to the acquisition of the assets. Subsequent costs are included in the asset’s carrying amount
or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with
the specific asset will flow to the Group and the cost of the subsequent item can be measured reliably. The carrying amount
of the replaced part is derecognised from the date of replacement. All other repairs and maintenance are charged to the
income statement during the financial period in which they are incurred.
Freehold land is not depreciated. Depreciation is provided on all other property, plant and equipment at rates calculated
to write off the cost less estimated residual value of each asset on a straight-line basis over its expected useful life, at the
following annual rates:
• Freehold buildings – 2.0 to 5.0%
• Plant and machinery – 7.5 to 33.0%
The carrying amounts of property, plant and equipment are reviewed for impairment periodically if events or changes in
circumstances indicate that the carrying amount may not be recoverable. The assets’ residual values, useful lives and
methods of depreciation are reviewed, and adjusted if appropriate, at the end of each reporting period.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in
the income statement.
11.2 Carrying amount of property, plant and equipment
Note
Freehold
land and
buildings
£’m
Plant and
machinery
£’m
Total
£’m
Cost
At 1 January 2020 26.6 104.0 130.6
Additions 0.1 9.8 9.9
Disposals – (13.4) (13.4)
Exchange difference 1.6 (2.8) (1.2)
At 31 December 2020 28.3 97.6 125.9
Additions 0.2 15.8 16.0
Disposals (1.7) (2.8) (4.5)
Exchange difference (1.8) (2.1) (3.9)
At 31 December 2021 25.0 108.5 133.5
Accumulated depreciation
At 1 January 2020 (7.4) (57.4) (64.8)
Depreciation charge for the year 4 (0.8) (11.9) (12.7)
Disposals – 12.1 12.1
Impairment – (0.5) (0.5)
Exchange difference (1.2) 1.9 0.7
At 31 December 2020 (9.4) (55.8) (65.2)
Depreciation charge for the year 4 (0.8) (10.7) (11.5)
Disposals 0.9 2.7 3.6
Impairment – (0.2) (0.2)
Exchange difference 1.5 1.8 3.3
At 31 December 2021 (7.8) (62.2) (70.0)
Net carrying value
At 1 January 2020 19.2 46.6 65.8
At 31 December 2020 18.9 41.8 60.7
At 31 December 2021 17.2 46.3 63.5
Tyman plc170 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
11. Property, plant and equipment continued
Depreciation on property, plant, and equipment is included in the income statement as follows:
2021
£’m
2020
£’m
Cost of sales 9.0 9.7
Administrative expenses 2.5 3.0
Total depreciation charge 11.5 12.7
The carrying amounts of property, plant and equipment have been reviewed for impairment, with a charge of £0.2 million
(2020: charge of £0.5 million) recognised. As part of this review, the Group has considered the impact of physical risk
hazards arising from climate change on significant asset locations, the risk of obsolescence or impairment of equipment
due to the introduction of climate-related technologies, and additional costs of transitioning to energy efficient technology.
There were no assets identified where this would significantly reduce the useful economic life and no impairment charge
has been recognised in relation to climate change. Refer to the sustainability report on pages 46 to 77 for further detail on
climate risks and opportunities.
12. Leases
12.1 Accounting policy
Recognition
At inception, the Group assesses whether a contract is or contains a lease. This assessment involves the exercise of
judgement about whether it depends on a specified asset, whether the Group obtains substantially all the economic benefits
from the use of that asset, and whether the Group has the right to direct the use of the asset. The Group recognises a
right-of-use (“ROU”) asset and a lease liability at the commencement of the lease.
Short-term and low-value assets
The Group has elected not to recognise ROU assets and lease liabilities for leases where the total lease term is less than
or equal to twelve months, or for leases of assets, with a value of less than £5,000. The payments for such leases are
recognised in the income statement on a straight-line basis over the lease term.
Non-lease components
Fees for components such as property taxes, maintenance, repairs and other services, which are either variable or transfer
benefits separate to the Group’s right to use the asset are separated from lease components based on their relative stand-
alone selling price. These components are expensed in the income statement as incurred.
Measurement
Lease liabilities
Lease liabilities are initially measured at the present value of future lease payments at the commencement date. Lease
payments are discounted using the interest rate implicit in the lease, or where this cannot be readily determined, the
lessee’s incremental borrowing rate. Lease payments include the following payments due within the non-cancellable term of
the lease, as well as the term of any extension options where these are considered reasonably certain to be exercised:
• fixed payments;
• variable payments that depend on an index or rate; and
• the exercise price of purchase or termination options if it is considered reasonably certain these will be exercised.
Subsequent to the commencement date, the lease liability is measured at the initial value, plus an interest charge
determined using the incremental borrowing rate, less lease payments made. The interest expense is recorded in finance
costs in the income statement. The liability is remeasured when future lease payments change, when the exercise of
extension or termination options becomes reasonably certain, or when the lease is modified.
Right-of-use assets
The ROU asset is initially measured at cost, being the value of the lease liability, plus the value of any lease payments made
at or before the commencement date, initial direct costs and the cost of any restoration obligations, less any incentives
received.
The ROU asset is subsequently measured at cost, less accumulated depreciation and impairment losses. The ROU asset is
adjusted for any remeasurement of the lease liability. The ROU asset is subject to testing for impairment where there are
any impairment indicators.
Annual Report and Accounts 2021 Tyman plc 171
Notes to the financial statements continued
For the year ended 31 December 2021
12. Leases continued
12.2 The Group’s leasing arrangements
The Group leases manufacturing and warehousing facilities, offices, and various items of plant, machinery, and vehicles
used in its operations.
Leases of manufacturing and warehousing facilities and offices generally have lease terms between five and 25 years, while
plant, machinery, and vehicles generally have lease terms between six months and five years. The Group’s obligations
under its leases are secured by the lessor’s title to the leased assets. Generally, the Group is restricted from assigning and
subleasing the leased assets. There are several lease contracts that include extension and termination options and variable
lease payments, which are further discussed below.
12.3 Carrying value of right-of-use assets
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the year:
Land and
buildings
£’m
Plant and
machinery
£’m
Total
£’m
At 1 January 2020 57.0 2.4 59.4
Additions 2.9 0.4 3.3
Disposals (1.6) – (1.6)
Depreciation charge (6.7) (1.0) (7.7)
Revaluation impairment (0.3) – (0.3)
Exchange difference (1.3) – (1.3)
At 31 December 2020 50.0 1.8 51.8
Additions 1.4 0.9 2.3
Lease extensions 4.7 – 4.7
Change in indexation 0.1 – 0.1
Disposals (0.1) – (0.1)
Depreciation charge (6.1) (0.9) (7.0)
Exchange difference 0.2 – 0.2
At 31 December 2021 50.2 1.8 52.0
12.4 Carrying value of lease liabilities
Set out below are the carrying amounts of lease liabilities (included under interest-bearing loans and borrowings) and the
movements during the year:
2021
£’m
2020
£’m
At 1 January (53.8) (60.0)
New leases (2.3) (3.3)
Lease extensions (4.7) –
Change in indexation (0.2) –
Disposals 0.2 1.6
Interest charge (2.5) (2.8)
Lease payments 8.6 9.2
Exchange difference (0.1) 1.5
At 31 December (54.8) (53.8)
2021
£’m
2020
£’m
Current liabilities (6.0) (5.4)
Non-current liabilities (48.8) (48.4)
(54.8) (53.8)
Tyman plc172 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
12. Leases continued
12.5 Amounts recognised in profit or loss
The following are the amounts recognised in profit or loss
2021
£’m
2020
£’m
Depreciation of ROU assets (7.0) (7.7)
Interest expense (included in finance cost) (2.5) (2.8)
Expense relating to short-term and low-value assets not included in lease liabilities
(included in cost of sales and administration expenses) (1.3) (1.0)
Expense relating to variable lease payments not included in lease liabilities
(included in cost of sales and administration expenses) (0.5) (0.5)
(11.3) (12.0)
12.6 Extension and termination options
The Group has several lease contracts that include extension and termination options. These options are negotiated by
management to provide flexibility in managing the leased-asset portfolio and align with the Group’s business needs.
Management applied judgment in determining whether these options were reasonably certain to be exercised when
determining the lease term. In making this judgment, management considered the remaining lease term, future business
plans and other relevant economic factors.
As at 31 December 2021, potential future cash outflows of £64.0 million (2020: £68.1 million) (undiscounted) have not
been included in the lease liability because it is not reasonably certain that the leases will be extended (or not terminated).
13. Inventories
13.1 Accounting policy
Inventories are valued at the lower of cost and net realisable value. Cost is determined in accordance with the first-in,
first-out method. Cost includes the cost of materials determined on a purchase cost basis, direct labour and an appropriate
proportion of manufacturing overheads based on normal levels of activity. It excludes borrowing costs. Net realisable value
is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated
costs necessary to make the sale.
The carrying amounts of inventories are stated with due allowance for excess, obsolete or slow-moving items. Management
exercises judgement in assessing net realisable value. In estimating provisions for slow-moving and obsolete inventory
management assesses of the nature and condition of the inventory, including assumptions around future demand, market
conditions and new product development initiatives.
13.2 Carrying amount of inventories
2021
£’m
2020
£’m
Raw materials and consumables 34.4 28.4
Work in progress 19.6 14.0
Finished goods 83.8 41.6
137.8 84.0
The cost of materials charged to cost of sales in the income statement during the year was £279.0 million
(2020: £242.7 million).
Inventories are stated net of an allowance for excess, obsolete or slow-moving items of £19.5 million (2020: £18.9 million).
A charge in respect of an increase in inventory provision of £0.9 million (2020: credit of £0.9 million) was recognised in
respect of inventories during the year.
There were no borrowings secured on the inventories of the Group (2020: £Nil).
Annual Report and Accounts 2021 Tyman plc 173
Notes to the financial statements continued
For the year ended 31 December 2021
14. Trade and other receivables
14.1 Accounting policy
Trade receivables are amounts due from customers for goods sold in the ordinary course of business. If collection is
expected in one year or less they are classified as current assets; otherwise they are presented as non-current assets.
Trade receivables are recognised initially at the amount of consideration that is unconditional. The Group holds the trade
receivables with the objective of collecting the contractual cash flows, and so it measures them subsequently at amortised
cost using the effective interest method, less appropriate allowances for estimated credit losses (provision for impairment).
The Group assesses on a forward-looking basis the expected credit losses associated with its trade receivables carried
at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in
credit risk.
For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime
losses to be recognised from initial recognition of the receivables. To measure the expected credit losses, trade receivables
are grouped based on shared credit risk characteristics and the length of time overdue. An estimate is made of the
expected credit loss based on the Group’s history, existing market conditions, as well as forward-looking estimates at the
end of each reporting period.
The trade receivables impairment provision requires the use of estimation techniques by Group management. The estimate
is made based on the assessments of the creditworthiness of customers, the ageing profile of receivables, historical
experience, and expectations about future market conditions.
14.2 Carrying amounts of trade and other receivables
2021
£’m
2020
£’m
Trade receivables 72.9 66.8
Less: Provision for impairment of trade receivables (3.0) (3.7)
Trade receivables – net 69.9 63.1
Other receivables – net 5.7 4.8
Prepayments 5.4 4.9
81.0 72.8
All trade and other receivables are current. Other receivables is net of an expected credit loss provision of £1.1 million
(2020: £1.8 million). The net carrying amounts of trade and other receivables are considered to be a reasonable
approximation of their fair values.
Impairment of trade receivables
An expected credit loss of £3.0 million has been recognised at 31 December 2021 (2020: £3.7 million).
The impairment loss allowance was determined as follows:
31 December 2021
Not
yet due
0–3
months
overdue
3–12
months
overdue
> 12
months
overdue Total
Expected credit loss rate 0.7% 13.0% 22.2% 100.0% 4.1%
Gross trade receivables (£’m) 60.9 10.0 0.9 1.1 72.9
Loss allowance (£’m) 0.4 1.3 0.2 1.1 3.0
31 December 2020
Not
yet due
0–3
months
overdue
3–12
months
overdue
> 12
months
overdue Total
Expected credit loss rate 2.0% 13.1% 50.0% 100.0% 5.5%
Gross trade receivables (£’m) 55.2 9.9 0.8 0.9 66.8
Loss allowance (£’m) 1.1 1.3 0.4 0.9 3.7
Tyman plc174 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
14. Trade and other receivables continued
Movement in the allowance for impairment of trade receivables is as follows:
2021
£’m
2020
£’m
At 1 January (3.7) (3.1)
Provision for receivables impairment (0.1) (1.8)
Receivables written off during the year 0.7 0.5
Unused amounts reversed 0.1 0.7
At 31 December (3.0) (3.7)
Movements in the impairment allowance are recognised in administrative expenses in the income statement.
The carrying amounts of trade and other receivables are denominated in the following currencies:
2021
£’m
2020
£’m
US dollars 41.0 36.6
Sterling 16.2 14.2
Euros 17.2 16.8
Other currencies 6.6 5.2
81.0 72.8
14.3 Financial assets at fair value through profit or loss
The Group classifies equity investments as assets held at FVPL. See note 19.1 for financial instruments accounting policy.
Financial assets measured at FVPL are as follows:
2021
£’m
2020
£’m
Unlisted shares 1.1 1.1
There was no gain or loss recognised in profit or loss in the current and prior year. The maximum market risk exposure at
the end of the year is the carrying amount of this investment.
15. Cash and cash equivalents
15.1 Accounting policy
In the consolidated statement of cash flows and balance sheet, cash and cash equivalents includes cash in hand, deposits
held at call with banks, other short-term, highly liquid investments with original maturities of three months or less and
bank overdrafts where the Group has a legal right of set off. Bank overdrafts, where there is no legal right of set off, are
classified as borrowings.
15.2 Carrying amounts of cash and cash equivalents
2021
£’m
2020
£’m
Cash at bank and in hand 76.6 72.8
Short-term deposits 0.4 0.4
Bank overdrafts (18.9) (3.5)
58.1 69.7
The carrying amounts of cash and cash equivalents are denominated in the following currencies:
2021
£’m
2020
£’m
Sterling 8.3 19.2
US dollars 22.5 24.6
Euros 13.1 16.6
Other currencies 14.2 9.3
58.1 69.7
Annual Report and Accounts 2021 Tyman plc 175
Notes to the financial statements continued
For the year ended 31 December 2021
16. Trade and other payables
16.1 Accounting policy
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are
presented as non-current liabilities.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method.
16.2 Carrying amounts of trade and other payables
2021
£’m
2020
£’m
Trade payables (78.4) (55.1)
Other taxes and social security costs (4.4) (6.5)
Accruals (29.1) (22.3)
Deferred income (1.0) (0.9)
(112.9) (84.8)
Analysed as:
Current liabilities (112.8) (84.4)
Non-current liabilities (0.1) (0.4)
(112.9) (84.8)
The carrying amounts of trade and other payables are considered to be a reasonable approximation of their fair values.
The carrying amounts of trade and other payables are denominated in the following currencies:
2021
£’m
2020
£’m
US dollars (59.2) (44.5)
Sterling (22.4) (14.8)
Euros (22.8) (19.8)
Other currencies (8.5) (5.7)
(112.9) (84.8)
17. Derivative financial instruments
17.1 Accounting policy
Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered
into and are subsequently remeasured at fair value. Derivatives are carried as assets when fair value is positive and as
liabilities when fair value is negative.
The Group designates certain derivatives as either:
• fair value hedge: hedges of the fair value of recognised assets or liabilities or a firm commitment;
• cash flow hedge: hedges of a particular risk associated with a recognised asset or liability or a highly probable forecast
transaction; or
• net investment hedge: hedges of a net investment in a foreign operation.
For those instruments designated as hedges, the Group documents at the inception of the transaction the relationship
between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking
various hedging transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis,
of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or
cash flows of hedged items.
The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining hedged item is
more than twelve months and as a current asset or liability when the remaining maturity of the hedged item is less than
twelve months.
For derivatives that do not qualify for hedge accounting, any gains or losses arising from changes in fair value are
recognised immediately in the income statement.
Tyman plc176 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
17. Derivative financial instruments continued
17.1.1 Fair value hedges
Changes in the fair value of derivatives designated and qualifying as fair value hedges are recorded in the income
statement, together with any changes in fair value of the hedged asset or liability that are attributable to the hedged risk.
17.1.2 Cash flow hedges
The effective portion of changes in the fair value of the derivatives that are designated and qualify as cash flow hedges is
recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in
the income statement.
Amounts accumulated in equity are reclassified to the income statement in the period in which the hedged item affects
profit or loss. 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.
17.1.3 Net investment hedge
Hedges of net investments in foreign operations are accounted for in a similar manner to cash flow hedges. Any gain or
loss on the hedging instrument relating to the effective portion of the hedge is recognised in other comprehensive income.
The gain or loss relating to the ineffective portion is recognised in the income statement. Gains and losses accumulated in
equity are included in the income statement when the foreign operation is partially disposed of or sold.
17.2 Carrying amounts of derivative financial instruments
2021 2020
Assets
£’m
Liabilities
£’m
Assets
£’m
Liabilities
£’m
Forward exchange contracts – fair value hedges – (0.3) – (0.2)
Total – (0.3) – (0.2)
Analysed as:
Current – (0.3) – (0.2)
Total – (0.3) – (0.2)
The carrying amounts of derivative financial instruments are denominated in the following currencies:
2021 2020
Assets
£’m
Liabilities
£’m
Assets
£’m
Liabilities
£’m
US dollars – (0.3) – (0.1)
Other currencies – – – (0.1)
– (0.3) – (0.2)
17.2.1 Fair value hedges
The notional principal amount of the outstanding forward foreign exchange contracts at 31 December 2021 was
£24.3 million (2020: £23.7 million). The hedge ratio of foreign exchange contracts is 1:1, holding all other variables
constant. The contracts have a range of maturities up to 17 June 2022.
During the year, a loss of £0.1 million (2020: gain of £0.3 million) was recognised in the income statement for the changes
in value of the fair value hedges.
The hedged highly probable forecast transactions denominated in foreign currency are expected to occur at various dates
during the next six months.
17.2.2 Cash flow hedges
The notional principal amounts of the outstanding interest rate swap at 31 December 2021 were £Nil (2020: £Nil).
During the year, a gain/loss of £Nil (2020: gain of £0.3 million) was recognised in the statement of comprehensive income
and £Nil (2020: £Nil) in the income statement for the ineffective portion of changes in the value of cash flow hedges.
Annual Report and Accounts 2021 Tyman plc 177
Notes to the financial statements continued
For the year ended 31 December 2021
17. Derivative financial instruments continued
17.2.3 Net investment hedges
The Group uses foreign currency-denominated debt to hedge the value of its US dollar and euro-denominated net assets,
which may change due to respective movements in US dollar and euro exchange rates. At 31 December 2021, the value of
the net investment hedges was £126.0 million (2020: £129.5 million). These hedges are considered highly effective and no
ineffective portion has been recognised in the income statement.
The hedge ratio of each net investment hedge was 1:1, holding all other variables constant. The weighted average
hedged rate of the US net investment hedge was 1.376 (2020: 1.284) and of the EUR net investment hedge was 1.163
(2020: 1.125).
The effect of the net investment hedges on the Group’s financial statements is summarised as follows:
2021
US net
investment
hedge
2021
EUR net
investment
hedge
2020
US net
investment
hedge
2020
EUR net
investment
hedge
Loan carrying amount (£’m) (81.4) (44.6) (81.1) (48.4)
Loan carrying amount (US$m/€m) (110.0) (53.1) (110.7) (53.9)
Hedge ratio (holding all other variables constant) 1:1 1:1 1:1 1:1
Change in carrying amount of loans as a result of foreign currency
movements recognised in OCI (0.8) 3.1 2.7 (2.5)
Change in value of hedged item used to determine hedge
effectiveness 0.8 (3.1) (2.7) 2.5
18. Interest-bearing loans and borrowings
18.1 Accounting policy
Interest-bearing loans and borrowings are recognised initially at fair value, net of transaction costs incurred. Interest-
bearing loans and borrowings are subsequently carried at amortised cost using the effective interest method.
18.2 Carrying amounts of interest-bearing loans and borrowings
Note
2021
£’m
2020
£’m
Unsecured borrowings at amortised cost:
Bank borrowings (116.5) (97.0)
Senior notes (33.3) (73.3)
Capitalised borrowing costs 0.7 1.2
Borrowings (149.1) (169.1)
Lease liabilities 12 (54.8) (53.8)
Total interest-bearing liabilities (203.9) (222.9)
Analysed as:
Current liabilities (6.1) (45.7)
Non-current liabilities (197.8) (177.2)
(203.9) (222.9)
There were no defaults in interest payments in the year under the terms of the existing loan agreements.
Non-cash movements in the carrying amount of interest-bearing loans and borrowings relate to the amortisation of
borrowing costs (see note 7).
The carrying amounts of interest-bearing loans and borrowings are denominated in the following currencies:
2021
£’m
2020
£’m
Sterling
1
0.7 1.2
US dollars (105.2) (108.2)
Euros (44.6) (62.1)
(149.1) (169.1)
1
Relates to capitalised borrowing costs.
Tyman plc178 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
18. Interest-bearing loans and borrowings continued
18.2.1 Bank borrowings
Multi-currency revolving credit facility
On 19 February 2018, the Group entered into the 2018 Facility. The 2018 Facility gives the Group access to up to
£310.0 million of borrowings and comprises a £240.0 million committed revolving credit facility and a £70.0 million
uncommitted accordion facility, expiring in February 2024. The banking facility is unsecured and is guaranteed by Tyman plc
and its principal subsidiary undertakings.
As at 31 December 2021, the Group has undrawn amounts committed under the multi-currency revolving credit facility of
£123.6 million (2020: £143.1 million). These amounts are floating rate commitments which expire beyond twelve months.
Other borrowings
The Group acquired bank borrowings as part of the acquisition of Reguitti. At 31 December 2021, the remaining facility has
a carrying value of £0.1 million (2020: £0.2 million) and an undrawn value of £Nil (2020: £Nil). The facility has a maturity
of 22 May 2022 and is unsecured.
18.2.2 Private placement notes
On 19 November 2014, the Group issued unsecured private debt placement notes with US financial institutions totalling
US$100.0 million.
The debt comprised US$55.0 million debt with a seven-year maturity from inception at a coupon of 4.97% and
US$45.0 million with a 10-year maturity from inception at a coupon of 5.37%. The US$55.0 million matured and was repaid
in November 2021. The US$45.0 million is due in 2024 and is classified as non-current.
18.3 Net debt
18.3.1 Net debt summary
2021
£’m
2020
£’m
Borrowings (149.1) (169.1)
Lease liabilities (54.8) (53.8)
Cash 58.1 69.7
At 31 December (145.8) (153.2)
18.3.2 Net debt reconciliation
Cash
£’m
Borrowings
£’m
Lease
liabilities
£’m
Total
£’m
At 1 January 2020 49.0 (211.8) (60.0) (222.8)
Cash flows 22.1 44.0 9.2 75.3
Acquisitions (1.5) – – (1.5)
Disposals – – 1.6 1.6
New leases – – (3.3) (3.3)
Lease interest accretion – – (2.8) (2.8)
Foreign exchange adjustments 0.1 (0.8) 1.5 0.8
Amortisation of borrowing costs – (0.5) – (0.5)
At 31 December 2020 69.7 (169.1) (53.8) (153.2)
Cash flows (11.5) 17.8 8.6 14.9
Disposals – – 0.2 0.2
New leases – – (2.3) (2.3)
Lease modifications – – (0.2) (0.2)
Lease interest accretion – – (2.5) (2.5)
Lease extensions – – (4.7) (4.7)
Foreign exchange adjustments (0.1) 2.7 (0.1) 2.5
Amortisation of borrowing costs – (0.5) – (0.5)
At 31 December 2021 58.1 (149.1) (54.8) (145.8)
Annual Report and Accounts 2021 Tyman plc 179
Notes to the financial statements continued
For the year ended 31 December 2021
19. Financial risk management and financial instruments
19.1 Accounting policy
Financial assets and liabilities are recognised in the Group’s balance sheet when the Group becomes a party to the
contractual provisions of the instrument and are generally derecognised when the contract that gives rise to it is settled,
sold, cancelled or expires.
19.1.1 Financial assets
Classification
The Group classifies its financial assets in the following measurement categories:
• those to be measured subsequently at fair value through profit or loss; and
• those to be measured subsequently 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 be recorded in profit or loss.
Initial measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at 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.
Subsequent measurement
Debt instruments
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 two 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 administrative expenses in the income statement, together with
foreign exchange gains and losses.
• FVPL: Assets that do not meet the criteria for amortised cost or fair value through other comprehensive income are
measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognised in profit or
loss in the period in which it arises.
Equity instruments
The Group subsequently measures all equity investments at fair value, with any gains or losses recorded in profit or loss.
Impairment
The Group 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. For policy on impairment of trade receivables, see note 14.
19.1.2 Financial liabilities held at amortised cost
Financial liabilities held at amortised cost comprise “trade and other payables” (see note 16) and “interest-bearing loans
and borrowings” (see note 18).
19.2 Financial instruments: by category
Assets as per balance sheet:
31 December 2021 31 December 2020
Financial
assets
at
amortised
cost
£’m
Financial
assets
at fair
value
through
profit or
loss
£’m
Total
£’m
Financial
assets
at amortised
cost
£’m
Financial
assets
at fair value
through
profit or loss
£’m
Total
£’m
Trade and other receivables
1
69.9 – 69.9 63.1 – 63.1
Financial assets at FVPL – 1.1 1.1 – 1.1 1.1
Cash and cash equivalents 58.1 – 58.1 69.7 – 69.7
Total financial assets 128.0 1.1 129.1 132.8 1.1 133.9
1
Excludes non-financial assets.
Tyman plc180 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
19. Financial risk management and financial instruments continued
31 December 2021 31 December 2020
Derivatives
used for
hedging
£’m
Other
financial
liabilities
at cost
£’m
Total
£’m
Derivatives
used for
hedging
£’m
Other
financial
liabilities at
cost
£’m
Total
£’m
Borrowings
1
– (149.8) (149.8) – (170.3) (170.3)
Lease liabilities – (54.8) (54.8) – (53.8) (53.8)
Derivative financial instruments (0.3) – (0.3) (0.2) – (0.2)
Trade and other payables
2
– (107.5) (107.5) – (77.4) (77.4)
Total financial liabilities (0.3) (312.1) (312.4) (0.2) (301.5) (301.7)
1
Excludes capitalised borrowing costs of £0.7 million (2020: £1.2 million).
2
Excludes non-financial liabilities.
19.3 Financial instruments: risk profile
19.3.1 Capital risk management
The Group manages its capital structure to ensure that it will be able to continue as a going concern. The capital structure
of the Group consists of cash and cash equivalents (note 15), interest-bearing loans and borrowings (note 18) and equity
attributable to the shareholders of the Company, as disclosed in the consolidated statement of changes in equity.
19.3.2 Financial management
The Group’s principal financial instruments comprise bank loans, private debt, and cash and short-term deposits. The Group
has various other financial instruments, such as trade receivables and trade payables that arise directly from its operations.
No trading in financial instruments is undertaken.
The Board reviews and agrees policies for managing each financial instrument risk and they are summarised below.
19.3.3 Liquidity and credit risk
The Group maintains sufficient cash and marketable securities and the availability of funding through an adequate amount
of credit facilities. Management monitors rolling forecasts of the Group’s liquidity on the basis of expected cash flow.
The Group manages liquidity risk by the pooling of cash resources and depositing funds available for investment in
approved financial instruments with financial institutions. Counterparty risk with respect to cash and cash equivalents is
managed by only investing in banks and financial instruments with independently assessed credit ratings of at least A2,
as published by Standard and Poor’s. Individual risk limits are assessed by management based on the external ratings.
Management does not expect any losses from the non-performance of these counterparties.
Credit risk is also attributable to the Group’s exposure to trade receivables due from customers. Management assesses
the credit quality of customers taking into account their financial position, past experience and other factors. In order to
mitigate credit risk, the Group utilises credit insurance in those areas of its operations where such insurance is available.
In areas where such insurance is not available, or it is uneconomical to purchase, management monitors the utilisation of
credit limits by customers, identified either individually or by group, and incorporates this information in credit risk controls.
The diverse nature of the Group’s customer base means that the Group has no significant concentrations of credit risk.
Trade receivables are presented in the balance sheet net of allowances for doubtful receivables, estimated by the Group’s
management based on prior experience and their assessment of the current economic environment.
The Group’s exposure to credit risk is limited to the carrying amount of financial assets recognised at the balance sheet
date. Management considers all financial assets that are not impaired for each of the reporting dates under review are of
good credit quality, including those that are past due.
During the year ended 31 December 2021, the Group operated within its borrowing facilities. Following a temporary
relaxation of the leverage covenant granted in 2020 to 3.5x at December 2020 and 4.0x at June 2021 due to uncertainty
arising from COVID-19, the leverage covenant returned to 3.0x adjusted EBITDA at December 2021.
Annual Report and Accounts 2021 Tyman plc 181
Notes to the financial statements continued
For the year ended 31 December 2021
19. Financial risk management and financial instruments continued
The table below analyses the contractual undiscounted cash flows of the Group’s financial liabilities into relevant maturity
groupings based on the contractual maturity date.
Not
later than
one year
£’m
Later than
one year
but not
later than
five years
£’m
Later than
five years
£’m
Total
£’m
Borrowings
1
(1.7) (153.1) – (154.8)
Lease liabilities (8.5) (26.5) (40.8) (75.8)
Derivative financial instruments (0.3) – – (0.3)
Trade and other payables
2
(107.5) – – (107.5)
At 31 December 2021 (118.0) (179.6) (40.8) (338.4)
Borrowings1 (43.9) (135.0) – (178.9)
Lease liabilities (8.0) (24.5) (44.2) (76.7)
Derivative financial instruments (0.2) – – (0.2)
Trade and other payables
2
(77.4) – – (77.4)
At 31 December 2020 (129.5) (159.5) (44.2) (333.2)
1
Excludes capitalised borrowing costs of £0.7 million (2020: £1.2 million).
2
Excludes non-financial liabilities.
19.3.4 Interest rate risk
The interest rate profile of the Group’s borrowings as at 31 December 2021 was as follows:
Floating
rate
borrowings
1
£’m
Fixed rate
borrowings
2
£’m
Fixed
rate lease
liabilities
£’m
Total
£’m
Sterling – – (14.6) (14.6)
US dollars (71.8) (33.3) (35.6) (140.7)
Euros (44.7) – (1.4) (46.1)
Other – – (3.2) (3.2)
At 31 December 2021 (116.5) (33.3) (54.8) (204.6)
Sterling – – (14.9) (14.9)
US dollars (34.9) (73.4) (33.4) (141.7)
Euros (62.1) – (1.6) (63.7)
Other – – (3.9) (3.9)
At 31 December 2020 (97.0) (73.4) (53.8) (224.2)
1
Excludes capitalised borrowing costs of £0.7 million (2020: £1.1 million).
2
Excludes capitalised borrowing costs of £Nil (2020: £0.1 million).
The interest rate on the floating bank loans is linked to LIBOR. The Board periodically reviews any exposure the Group
may have to interest rate fluctuations, and, where appropriate, considers use of interest rate swaps to fix the cost of a
proportion of these floating rate borrowings.
Floating
rate
borrowings
1
£’m
US dollars (71.8)
Euros (44.7)
At 31 December 2021 (116.5)
US dollars (34.9)
Euros (62.1)
At 31 December 2020 (97.0)
1
Excludes capitalised borrowing costs of £0.7 million (2020: £1.1 million).
Tyman plc182 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
19. Financial risk management and financial instruments continued
Interest rate sensitivity
The impact of a 50 basis point movement in floating interest rates on borrowings would have a c.£0.5 million
(2020: c. £0.8 million) impact on profits. This impact would be reduced by the tax effect on such a change.
Interest rate risk of financial assets
The weighted average interest rate received on deposited funds was Nil% during the year (2020: Nil%).
19.3.5 Foreign currency risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures,
primarily with respect to the US dollar and the euro. Foreign exchange risk arises from future commercial and financing
transactions, recognised assets and liabilities denominated in a currency that is not the Group’s functional currency and net
investments in overseas entities.
The Group includes entities which transact in currencies other than sterling and that have functional currencies other than
sterling, whose net assets are, therefore, subject to currency translation risk. The Group borrows in local currencies as
appropriate to minimise the impact of this risk on the balance sheet. See details of net investment hedges in note 17.
Foreign currency exchange rate sensitivity
Foreign currency financial assets and liabilities, translated into sterling at the closing rate, are as follows:
At 31 December 2021
Sterling
£’m
US dollars
£’m
Euros
£’m
Other
£’m
Total
£’m
Financial assets
Trade and other receivables
1
13.9 36.5 15.7 3.8 69.9
Financial assets at FVPL – 1.1 – – 1.1
Cash and cash equivalents 8.3 22.5 13.1 14.2 58.1
Total financial assets 22.2 60.1 28.8 18.0 129.1
Financial liabilities
Borrowings
2
– (105.2) (44.6) – (149.8)
Lease liabilities (14.6) (35.6) (1.4) (3.2) (54.8)
Derivative financial instruments – (0.3) – – (0.3)
Trade and other payables
3
(20.6) (58.1) (21.0) (7.8) (107.5)
Total financial liabilities (35.2) (199.2) (67.0) (11.0) (312.4)
Potential impact on profit or loss – (loss)/gain
10% increase in functional currency (2.3) (0.4) (0.5) (3.2)
10% decrease in functional currency 3.2 0.7 0.5 4.4
Potential impact on other comprehensive income –
gain/(loss)
10% increase in functional currency 12.7 3.5 (0.5) 15.7
10% decrease in functional currency (15.6) (4.2) 0.7 (19.1)
1
Excludes non-financial assets.
2
Excludes capitalised borrowing costs of £0.7 million (2020: £1.2 million).
3
Excludes non-financial liabilities.
Annual Report and Accounts 2021 Tyman plc 183
Notes to the financial statements continued
For the year ended 31 December 2021
19. Financial risk management and financial instruments continued
At 31 December 2020
Sterling
£’m
US dollars
£’m
Euros
£’m
Other
£’m
Total
£’m
Financial assets
Trade and other receivables
1
12.3 31.4 15.8 3.6 63.1
Financial assets at FVPL – 1.1 – – 1.1
Cash and cash equivalents 19.2 24.6 16.6 9.3 69.7
Total financial assets 31.5 57.1 32.4 12.9 133.9
Financial liabilities
Borrowings
2
– (108.2) (62.1) – (170.3)
Lease liabilities (14.9) (33.4) (1.6) (3.9) (53.8)
Derivative financial instruments – (0.1) – (0.1) (0.2)
Trade and other payables
3
(13.3) (41.1) (17.9) (5.1) (77.4)
Total financial liabilities (28.2) (182.8) (81.6) (9.1) (301.7)
Potential impact on profit or loss – (loss)/gain
10% increase in functional currency (2.3) (0.4) (0.4) (3.1)
10% decrease in functional currency 2.5 0.3 0.5 3.3
Potential impact on other comprehensive income –
gain/(loss)
10% increase in functional currency 11.6 4.5 (0.3) 15.8
10% decrease in functional currency (14.1) (5.5) 0.4 (19.2)
1
Excludes non-financial assets.
2
Excludes capitalised borrowing costs of £0.7 million (2020: £1.2 million).
3
Excludes non-financial liabilities.
The 10% movements in exchange rates are considered to be indicative of a reasonable annual movement, based on
historical average movements in exchange rates.
19.3.6 Capital management
The Group’s capital management objectives are to safeguard the Group’s ability to continue as a going concern so as to
provide returns to shareholders and benefits to stakeholders. The Group defines its capital as total equity plus net debt.
In maintaining the capital structure, the Group may adjust the amount paid as dividends to shareholders, issue new shares
or dispose of assets to reduce debt.
The Group monitors its financial capacity by reference to its financial covenant ratios, including leverage and interest cover.
If the Group fails to meet its key financial covenant ratios required by its lenders, this could impact the Group’s average
interest rate of borrowings and the future availability of credit to the Group.
The Group is in compliance with the financial covenants contained within its credit facilities, and has been in compliance
throughout the financial year.
Note
2021
£’m
2020
£’m
Borrowings (including lease liabilities)1 18 204.6 224.1
Less: Cash and cash equivalents 15 (58.1) (69.7)
Total equity 482.4 443.1
Total capital 628.9 597.5
1
Excludes capitalised borrowing costs of £0.7 million (2020: £1.2 million).
19.4 Fair value estimation
The Group’s derivative financial instrument used for hedging is measured at fair value. The Group uses the following
hierarchy for measuring fair value:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly.
• Level 3: inputs for the asset or liability that are not based on observable market data.
Derivatives shown at fair value in the balance sheet have been valued by reference to Level 2 techniques described above.
There were no transfers between levels in the current and prior year.
Tyman plc184 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
19. Financial risk management and financial instruments continued
19.4.1 Valuation techniques used to derive Level 2 fair values
Level 2 hedging derivatives comprise interest rate swaps fair valued using forward interest rates extracted from observable
yield curves and foreign exchange contracts valued with reference to the period end exchange rate. The effects of
discounting are generally insignificant for Level 2 derivatives. The fair value of the derivative financial instruments at
31 December 2021 is a net liability of £0.3 million (2020: liability of £0.2 million).
There were no changes in valuation techniques during the year.
19.4.2 Group’s valuation process
The Group has a team that performs the valuations of financial assets required for financial reporting purposes. This team
reports to the CFO and the Audit and Risk Committee.
19.4.3 Fair value of financial assets and liabilities measured at amortised cost
The fair values of borrowings are as follows:
2021
£’m
2020
£’m
Current liabilities (6.1) (45.7)
Non-current liabilities (197.8) (177.2)
Fair value of borrowings (203.9) (222.9)
The fair values of the following financial assets and liabilities approximate their carrying amounts:
• trade and other receivables;
• cash and cash equivalents; and
• trade and other payables.
20. Provisions
20.1 Accounting policy
Provisions are recognised when:
• the Group has a present legal or constructive obligation as a result of a past event;
• it is probable that an outflow of resources will be required to settle the obligation; and
• a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation
at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is
measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those
cash flows using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific
to the obligation.
The increase in the provision due to the passage of time is recognised in the income statement within net finance costs.
Provisions are not recognised for future operating losses.
Annual Report and Accounts 2021 Tyman plc 185
Notes to the financial statements continued
For the year ended 31 December 2021
20. Provisions continued
20.1.1 Critical accounting estimates and judgements: carrying amount of provisions
Provisions, by their nature, are uncertain and highly judgemental. Provisions are measured at the Directors’ best estimate
of the expenditure required to settle the obligation at the balance sheet date based on the nature of the provisions, the
potential outcomes, any developments relating to specific claims and previous experience.
20.2 Carrying amounts of provisions
Property
related
£’m
Restructuring
£’m
Warranty
£’m
Other
£’m
Total
£’m
At 1 January 2020 (3.3) (0.9) (3.1) (2.3) (9.6)
(Charged)/credited to the income statement
Additional provisions in the year (0.1) 0.1 (0.5) – (0.5)
Unused amounts reversed – – 0.7 – 0.7
Utilised in the year – 0.3 – 0.1 0.4
Exchange difference – – 0.1 – 0.1
At 31 December 2020 (3.4) (0.5) (2.8) (2.2) (8.9)
(Charged)/credited to the income statement
Additional provisions in the year – – (0.1) (0.1) (0.2)
Unused amounts reversed – 0.2 1.6 1.0 2.8
Exchange difference – – – 0.1 0.1
At 31 December 2021 (3.4) (0.3) (1.3) (1.2) (6.2)
Analysed as:
2021
£’m
2020
£’m
Current liabilities (1.4) (1.3)
Non-current liabilities (4.8) (7.6)
(6.2) (8.9)
Current liabilities are those aspects of provisions that are expected to be utilised within the next twelve months.
20.2.1 Property related
Property provisions include provisions for site restoration costs of £1.3 million (2020: £1.3 million) and leasehold
dilapidations of £2.1 million (2020: £2.1 million).
These provisions relate to contractual obligations to reinstate leasehold properties and land to their original state of repair
and are based on management’s best estimate of future costs to remediate. Property provisions are expected to be utilised
by 2042.
20.2.2 Restructuring
Restructuring provisions reversed in the year and remaining at year end predominantly relate to the streamlining of the
international satellite operations which commenced in late 2019. The majority of the remaining provisions are expected to
be utilised in 2022.
20.2.3 Warranty
Warranty provisions are calculated based on historical experience of the ultimate cost of settling product warranty claims
and potential claims. These warranty provisions are expected to be utilised by 2031. The unused amounts reversed during
the year predominantly relates to a reduction in a provision made on a previous acquisition, as well as a reduction in a
product warranty provision.
20.2.4 Other
Included in other provisions is £0.4 million (2020: £0.4 million) relating to the tax consequences of international intragroup
transactions, for which the fiscal authorities may be expected to adopt opposing treatments in respect of revenue and cost
recognition. The remaining £0.8 million (2020: £1.7 million) relates to various provisions for potential obligations mainly
arising from the Group’s M&A activity. These other provisions are expected to be utilised by 2025.
Tyman plc186 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
21. Retirement benefit obligations
21.1 Accounting policy
The Group operates both defined contribution and defined benefit pension plans.
21.1.1 Pension obligations
Defined contribution plans
A defined contribution plan is a pension plan under which the Group pays fixed contributions into publicly or privately
administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group recognises contributions
as an employee benefit expense when they are due and has no further payment obligations once the contributions have
been paid. The Group has no legal or constructive obligation to pay further contributions if the fund does not hold sufficient
assets to pay all employees the benefits relating to employee service in the current or prior periods. Prepaid contributions
are recognised as an asset to the extent that a cash refund in the future is available.
Defined benefit plans
A defined benefit plan is a pension plan that is not a defined contribution plan. Typically, defined benefit plans define an
amount of pension benefit an employee will receive on retirement. This amount is usually dependent on one or more factors
such as age, years of service and compensation.
The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined
benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is
calculated annually by independent actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using
interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and
that have terms to maturity approximating to the terms of the related pension obligation. In countries where there is no
deep market in such bonds, the market rates on government bonds are used.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or
credited to equity in other comprehensive income in the period in which they arise.
Past service costs are recognised immediately in the income statement.
21.1.2 Key source of estimation uncertainty: defined benefit pension and post-retirement benefit schemes
Defined benefit obligations are calculated using a number of assumptions, including future salary increases, increases to
pension benefits, mortality rates and, in the case of post-employment medical benefits, the expected rate of increase in
medical costs. The plan assets consist largely of listed securities and their fair values are subject to fluctuation in response
to changes in market conditions. Effects of changes in the actuarial assumptions underlying the benefit obligation, effects
of changes in the discount rate applicable to the benefit obligation and effects of differences between the expected and
actual return on the plan assets are classified as actuarial gains and losses and are recognised directly in equity. Further
actuarial gains and losses will be recognised during the next financial year. An analysis of the assumptions that will be used
by management to determine the cost of defined benefit plans that will be recognised in the income statement in the next
financial year is presented in this note.
21.2 Defined contribution pension schemes
The Group operates a number of defined contribution pension schemes, the assets of which are held externally to the
Group in separate trustee-administered funds. The costs of the Group’s defined contribution pension schemes are charged
to the income statement in the period in which they fall due. The charge to the income statement was £3.8 million
(2020: £3.6 million). At the year end, the Group had unpaid pension contributions of £0.2 million (2020: £0.1 million)
included within employee benefit liabilities.
21.3 Defined benefit pension schemes
The table below outlines where the Group’s post-employment amounts and activity are included in the financial statements.
2021
£’m
2020
£’m
Net liability on the balance sheet (4.0) (8.9)
Income statement charge
1
(0.3) (0.7)
Remeasurements
2
2.1 1.3
1
The income statement charge included within profit before taxation includes current service costs, past service costs, administrative costs
and interest costs.
2
The remeasurement of post-employment benefit obligations includes a £0.5 million deferred tax charge. The remeasurement included in
the consolidated statement of comprehensive income and consolidated statement of changes in equity of £1.6 million is included net of the
£0.5 million deferred tax charge.
The Group’s principal defined benefit pension schemes are operated in the US and Italy. The US defined benefit schemes
provide benefits to members in the form of a guaranteed level of pension payable for life. The level of benefits provided
depends on members’ length of service and their salary in the final years leading up to retirement.
Annual Report and Accounts 2021 Tyman plc 187
Notes to the financial statements continued
For the year ended 31 December 2021
21. Retirement benefit obligations continued
The Italian schemes relate to TFR termination obligations payable to employees of the Group’s Italian operations. Italian
employers are required to make provision for a type of severance package to its employees equivalent to 6.9% of each
employee’s gross annual salary, revalued on the basis of 75.0% of inflation plus a fixed rate of 1.5% during the period of
accrual. Upon termination of employment, the employer is obliged to pay a lump sum to the employee. TFR termination
obligations are unfunded by the Group. For certain US plans, pensions in payment do not receive inflationary increases.
The benefit payments are from trustee-administered funds. Plan assets held in trusts are governed by local regulations and
practice in the US, as is the nature of the relationship between the Group and the trustees and their composition.
Responsibility for governance of the plans, including investment and contribution schedules, lies jointly with the Group
and the board of trustees. The board of trustees is composed of representatives of the Company and plan participants in
accordance with the relevant plan rules.
Actuarial gains and losses from participant experience, changes in demographic assumptions, changes in financial assumptions and
net return on plan assets are recognised, net of the related deferred tax, in the consolidated statement of comprehensive income.
In 2021, the Group commenced a process to terminate in the two remaining US defined benefit schemes. These schemes
have been closed to new entrants and closed to further accrual of service for many years. Termination of these schemes will
reduce income statement volatility, reduce administration costs and burden and will reduce future cash outflows. Under the
terms of the arrangement, participants will be given the option of receiving a lump-sum benefit or an annuity, the liability
for which will be transferred to an insurance company. The termination process is expected to take up to twenty-four
months, with the final distribution date in the second half of 2023.
In September 2021, a Notice of Intent to Terminate was issued to participants and a Plan Termination Amendment was
signed in November 2021. During the year, additional contributions were made to the plans to reduce the net deficit and all
assets were transferred to fixed income funds to minimise volatility. During 2022, the Group will complete various procedures
and filings required for approval of the termination by the Inland Revenue Service (“IRS
”
) and Pension Benefit Guarantee
Corporation (“PBGC
”
). In 2023, participant elections will be finalised, the final termination liability will be calculated, annuities
transferred to a provider, and any final termination payment made. After such time, the Group will have no further obligations
remaining.
The movement in the defined benefit obligation over the year is as follows:
Present value of
obligations
Fair value of
plan assets
Net defined
liability
Note
2021
£’m
2020
£’m
2021
£’m
2020
£’m
2021
£’m
2020
£’m
Balance at 1 January (31.8) (30.5) 22.9 19.3 (8.9) (11.2)
Included in the income
statement:
Current service cost (0.1) (0.1) – – (0.1) (0.1)
Administration costs – – (0.1) (0.3) (0.1) (0.3)
Interest (expense)/income 7 (0.6) (0.9) 0.5 0.6 (0.1) (0.3)
Subtotal in income
statement
1
5 (0.7) (1.0) 0.4 0.3 (0.3) (0.7)
Included in other
comprehensive income
Remeasurement gain/(loss)
arising from:
Net gain on plan assets
2
– – 1.1 4.1 1.1 4.1
Gain/(loss) from change in
demographic assumptions (0.1) 0.2 – – (0.1) 0.2
Gain/(loss) from change in
financial assumptions 1.2 (3.0) – – 1.2 (3.0)
Experience loss (0.1) – – – (0.1) –
Subtotal in other
comprehensive income
3
1.0 (2.8) 1.1 4.1 2.1 1.3
Employer contributions – – 2.5 1.5 2.5 1.5
Benefit payments 1.7 1.6 (1.3) (1.4) 0.4 0.2
Exchange difference (0.1) 0.9 0.3 (0.9) 0.2 –
Balance at 31 December (29.9) (31.8) 25.9 22.9 (4.0) (8.9)
1
The current service cost, past service costs and expenses relating to the administration of the defined benefit schemes are included in the
income statement within administrative expenses. Also see note 5.3. Net expense is included within net finance income and costs (note 7).
2
Excluding amounts included in interest expense.
3
A deferred tax charge of £0.5 million (2020: deferred tax credit of £0.1 million) has been recognised in other comprehensive income in
respect of remeasurements of the defined benefit obligation. Also see note 8.
Tyman plc188 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
21. Retirement benefit obligations continued
Defined benefit plan liabilities and assets by country are as follows:
Present value
of obligations
Fair value of
plan assets
Net defined
liability
2021
£’m
2020
£’m
2021
£’m
2020
£’m
2021
£’m
2020
£’m
United States (26.8) (28.1) 25.9 22.9 (0.9) (5.2)
Italy (3.1) (3.7) – – (3.1) (3.7)
Balance at 31 December (29.9) (31.8) 25.9 22.9 (4.0) (8.9)
Plan assets comprise the following asset classes:
2021 2020
£’m % £’m %
Equity instruments – – 12.5 54.6%
Large US equity – – 7.1
Small/mid US equity – – 1.2
International equity – – 4.2
Fixed income 25.9 100.0% 9.2 40.2%
Other – – 1.2 5.2%
Balance at 31 December 25.9 22.9
Equity instruments comprise quoted investments.
Through its defined benefit pension plans, the Group is exposed to a number of risks, the most significant of which are
detailed below:
Asset volatility The plan liabilities are calculated using a discount rate set with reference to corporate bond
yields; if plan assets underperform this yield, this will create a deficit. As a termination process
has commenced, all US plan assets were transferred to fixed income investments, comprising a
mixture of government and corporate bonds, to reduce volatility and provide an acceptable level
of investment risk to better match liabilities. The Italian plans do not have plan assets.
Changes in bond
yields
A decrease in corporate bond yields will increase plan liabilities, although this will be partially
offset by an increase in the value of the plans’ bond holdings.
Inflation risk Some of the Group’s pension obligations are linked to inflation, and higher inflation will lead
to higher liabilities (although, in most cases, caps on the level of inflationary increases are in
place to protect the plan against extreme inflation). The majority of the plans’ assets are either
unaffected by fixed interest bonds or loosely correlated with equities inflation, meaning that an
increase in inflation will also increase the deficit. In the US plans, the pensions in payment are
not linked to inflation, so this is a less material risk.
Life expectancies The majority of the plans’ obligations are to provide benefits for the life of the member, so
increases in life expectancy will result in an increase in the plans’ liabilities.
The significant actuarial assumptions were as follows:
2021 2020
United
States Italy
United
States Italy
Discount rate 2.64% 0.80% 2.30% 0.10%
Inflation 2.25% 1.25% 2.25% 0.50%
Salary growth rate n/a 1.25% n/a 0.50%
Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics and
experience in each jurisdiction. These assumptions translate into an average life expectancy in years for a pensioner retiring
at age 65 for the US schemes as seen in the following table. This assumption is not relevant to the Italian schemes.
Annual Report and Accounts 2021 Tyman plc 189
Notes to the financial statements continued
For the year ended 31 December 2021
21. Retirement benefit obligations continued
2021 2020
United
States Italy
United
States Italy
Retiring at the end of the reporting year
Male 20.1 n/a 19.9 n/a
Female 22.1 n/a 22.0 n/a
Retiring 20 years after the end of the reporting year
Male 21.6 n/a 21.5 n/a
Female 23.6 n/a 23.4 n/a
The sensitivity of the defined benefit obligation to changes in the weighted principal assumption is:
Change in
discount
rate
assumption
Impact of
increase in
assumption
Impact of
decrease in
assumption
US 0.25% (2.9)% 3.0%
Italy 0.50% (4.6)% 5.1%
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant.
In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions the same methodology has been applied as
when calculating the pension liability recognised within the statement of financial position.
The methods and types of assumptions used in preparing the sensitivity analyses did not change compared to the
previous year.
The US pension schemes are closed to new entrants and closed to further accrual of service; as a result there will be
no further service costs incurred by the Group related to these schemes. The expected level of contributions to the
defined benefit pension scheme and post-employment medical benefits in the year to December 2022 is £1.5 million
(2021: £1.4 million).
The weighted average duration of the defined benefit obligation is 12.1 years for US plans (2020: 13 years) and 10.2 years
for Italian plans (2020: 10 years).
The expected maturity analysis of undiscounted post-employment pension benefits is as follows:
Defined
pension
benefits
1
2021
£’m
Defined
pension
benefits
2020
£’m
No later than one year (1.7) (1.8)
Between one and two years (1.7) (1.7)
Between two and five years (5.1) (5.3)
Later than five years (8.6) (9.1)
Total (17.1) (17.9)
1
This maturity analysis reflects the current terms of the scheme and does not reflect the planned termination of the US schemes.
Tyman plc190 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
22. Share capital and share premium
22.1 Accounting policy
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or
options are shown in equity as a deduction, net of tax, from the proceeds received by the Company.
Where any Group company purchases the Company’s equity share capital (treasury shares), the consideration paid,
including any directly attributable incremental costs (net of income taxes), is deducted from equity attributable to
the Company’s owners until the shares are cancelled or reissued. Where such shares are subsequently reissued, any
consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is
included in equity attributable to the Company’s owners.
22.2 Share capital and share premium
Number of
shares
’m
Ordinary
shares
£’m
Share
premium
£’m
At 31 December 2020 and 31 December 2021 196.8 9.8 –
Ordinary shares in the Company have a par value of 5.00 pence per share (2020: 5.00 pence per share). All issued shares
are fully paid up.
23. Share-based payments
23.1 Accounting policy
The Group operates the LTIP, which is an equity-settled share-based compensation plan for certain employees, under which
the entity receives services from employees as consideration for equity instruments (share options) of the Group. The fair
value of the employee services received in exchange for the grant of options is expensed on a straight-line basis over the
vesting period, based on the Group’s estimate of shares that will eventually vest.
The total amount to be expensed over the vesting period is determined by reference to the fair value of the options
granted, excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in
assumptions about the number of options that are expected to vest. At each balance sheet date, the entity revises its
estimates of the number of options that are expected to vest, with any changes in estimate recognised in the income
statement, with a corresponding adjustment in equity. The fair value of awards granted under LTIP is measured using the
Black-Scholes model to predict target EPS levels.
The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and
share premium when the options are exercised. The Group also operates a save as you earn scheme for employees and a
deferred share bonus plan for senior management.
The Group also operates as deferred share bonus plan that requires that a portion of the Short-term Incentive Plan (“STIP”)
award to certain executives, which is determined based on current year performance is deferred in shares to be issued
three-years after the award date. The value is fixed and the number of shares varies dependent on the share price at
vesting. This is therefore treated as cash settled, with the credit being recorded as a liability. Once the shares are issued,
the liability is transferred to retained earnings in equity. The total expense recognised in the year in respect of the deferred
share bonus was £0.4 million.
The charges relating to the equity-settled share-based payments is outlined below.
2021
£’m
2020
£’m
LTIP 0.9 0.1
Save as you earn 0.1 –
Total equity-settled share-based payments charge 1.0 0.1
The charge in respect of the save as you earn scheme (“SAYE”) of £62,000 (2020: £47,000) is immaterial and therefore
further disclosures are not provided.
Annual Report and Accounts 2021 Tyman plc 191
Notes to the financial statements continued
For the year ended 31 December 2021
23. Share-based payments continued
23.2 LTIP
The charge to the income statement in 2021 in relation to the LTIP was £1.0 million (2020: £0.1 million).
Conditional, annual awards of shares are granted under the LTIP to the Executive Directors and certain senior managers
at the discretion of the Remuneration Committee. Provided the participant remains an employee of the Group and where
applicable, the performance targets are met, awards will vest between one and three years after the date of the grant
at no cost to the employee. Further information on the LTIP and the performance targets for each grant are given in the
Remuneration report.
The fair value of the awards granted under the LTIP in 2021 and the assumptions used in the calculation of the share-based
payment charge are outlined below.
Grant 1 Grants 2–4 Grant 5 Grant 6 Grant 7
Exercise price £Nil £Nil £Nil £Nil £Nil
Share price at grant date £3.58 £3.58 £4.88 £4.30 £4.30
Fair value £3.58 £3.58 £4.69 £4.30 £4.30
Expected volatility 31.17% 31.17% 31.14% 31.05% 31.05%
Expected dividend yield – – – – –
Risk-free rate 0.4% 0.1% 0.4% 0.4% 0.4%
Grant date 12 March 21 12 March 21 21 May 21 04 August 21 04 August 21
Expected life 3 years 1–3 years 3 years 3 years 3 years
LTIPs awarded to Divisional Presidents and Head Office employees under Grants 1 and 6 contain the following performance
targets in respect of between half to two-thirds of the respective award’s value: (a) 2023 Group EPS must be 31.06p or
more; (b) 2023 Group ROCE must be 13.0% or more; and (c) at least the lower threshold of the Group ESG scorecard
conditions (i.e. Safety, Sustainable Operations, Sustainable Culture and Sustainable Solutions) must be met. Divisional
Presidents and senior reports to Divisional Presidents also have a performance target based on their division’s 2023 EBITA.
Senior reports to Divisional Presidents do not have the 2023 Group EPS performance targets attached to their LTIP awards.
Divisional Presidents have no performance targets in respect of half of their awards. Head Office employees and senior
reports to Divisional Presidents have no performance targets in respect of half of their awards.
The remaining recipients of awards under Grants 1 and 6 are subject only to a continuous service condition.
In addition to the Group EPS, Group ROCE and Group ESG performance targets described above, Executive Directors (who
received an award under Grant 5) also have a TSR performance target. To fulfil the TSR performance target, they must
achieve at least the “median” in the Net Return Index when ranked against constituents of the FTSE250 index, excluding
investments trusts, as at 1 January 2021. Executive Directors are also subject to a two-year compulsory holding period
post-vesting. For further details, see Directors’ Remuneration report on pages 116 to 137.
Grants 2, 3, 4 and 7 relate to one-off restricted share awards, where LTIPs vest at the end of a period of between one to
three years if the employees remain in continuous service. There are no performance targets attached to such awards.
Movements in the number of outstanding conditional awards of shares are as follows:
2021
’m
2020
’m
At 1 January 2.4 2.1
Exercised (0.3) –
Granted 0.9 1.1
Lapsed (0.6) (0.8)
Dividend equivalent 0.1 –
At 31 December 2.5 2.4
At 31 December, there are no options currently exercisable.
23.3 Employee Benefit Trust purchases
Details of shares purchased by the Employee Benefit Trust to satisfy certain share awards vested in the year, as well as
future obligations under the Group’s various share plans are as follows:
2021
’m
2020
’m
Number of ordinary shares 0.1 0.1
Cost to Company (£) 0.3 0.3
Tyman plc192 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
24. Dividends
2021
£’m
2020
£’m
Amounts recognised as distributions to owners in the year:
Final dividend for the year ended 31 December 2020 (2019: Nil
1
) 7.8 –
Interim dividend for the year ended 31 December 2021 (2020: Nil) 7.8 –
Total amounts recognised as distributions to owners in the year 15.6 –
Amounts not recognised in the financial statements:
Final dividend proposed for the year ended 31 December 2021 of 8.9 pence (2020: 4.0 pence) 17.4 7.8
1
As a result of significant uncertainty in 2020, payment of the final dividend proposed in 2019 of 8.4 pence per share was cancelled.
The proposed final dividend is subject to approval by the shareholders at the Annual General Meeting and has not been
included as a liability in the financial statements for the year ended 31 December 2021.
25. Adjustments to cash flows from operating activities
The following non-cash and financing adjustments have been made to profit before taxation to arrive at operating
cash flow:
Note
2021
£’m
2020
£’m
Net finance costs 7 9.1 12.1
Depreciation of PPE 11 11.5 12.7
Depreciation of right-of-use assets 12 7.0 7.7
Amortisation of intangible assets 10 18.8 20.3
Impairment of intangible assets 10 1.9 –
Impairment of property, plant and equipment 11 0.2 0.5
Impairment of right-of-use assets 12 – 0.3
Loss on disposal of property, plant and equipment 0.2 1.3
Pension service costs and expected administration costs 0.1 0.4
Non-cash provision movements (2.4) (0.1)
Share-based payments 1.0 0.7
47.4 55.9
26. Financial commitments
26.1 Capital commitments
2021
£’m
2020
£’m
Property, plant and equipment 1.7 1.1
27. Contingent liabilities
There are no contingent liabilities in 2021.
28. Events after the balance sheet date
There were no events after the balance sheet date.
Annual Report and Accounts 2021 Tyman plc 193
Notes to the financial statements continued
For the year ended 31 December 2021
29. Related party transactions
he following transactions were carried out with related parties of Tyman plc:
29.1 Subsidiaries
Transactions between the Company and its subsidiaries, which are related parties, are eliminated on consolidation. There
were no transactions between the Company and its subsidiaries made during the year other than intercompany loans and
dividends.
29.2 Key management compensation
The Group considers its Directors to be the key management personnel on the basis that it is the Directors who have the
sole responsibility for planning, directing and controlling the Group. Full details of Directors’ remuneration are given in the
Remuneration report on pages 114 to 137. Key management compensation in accordance with IAS 24 is as follows:
2021
£’m
2020
£’m
Short-term employee benefits 1.7 1.0
Share-based payments (including DSBP) 0.7 –
2.4 1.0
29.3 Directors
Full details of individual Directors’ remuneration are given in the Remuneration report on page 127. Directors remuneration
in accordance with the requirements of The Large and Medium-sized Companies and Groups (Accounts and Reports)
Regulations 2008 is as follows:
2021
£’m
2020
£’m
Aggregate emoluments 2.4 1.0
Aggregate gains made on the exercise of share options 0.7 0.3
3.1 1.3
30. Subsidiaries
Details of the subsidiaries of the Group as at 31 December 2021 are detailed below. Unless otherwise indicated, all
subsidiaries are wholly owned.
Registered name and office address
Country of
incorporation Nature of business
UK operations
29 Queen Anne’s Gate, London SW1H 9BU
Amesbury Holdings Limited
1
Balance UK Limited
1
United Kingdom Dormant
Bilco Access Solutions Limited
1
United Kingdom Building products
Crompton Limited
1
United Kingdom Dormant
ERA Home Security Limited
1
United Kingdom Building products
ERA Products Limited
1
United Kingdom Dormant
ERA Security Hardware Limited
1
United Kingdom Dormant
Grouphomesafe Limited
1
United Kingdom Dormant
Howe Green Limited
1
United Kingdom Building products
Jasper Acquisition Holdings Limited United Kingdom Holding company
Jasper Acquisition Limited
1
United Kingdom Holding company
Lupus Capital Limited United Kingdom Dormant
Octroi Group Limited United Kingdom Holding company
Octroi Investments Limited
1
United Kingdom Dormant
Otterburn Limited
1
United Kingdom Dormant
Profab Access Limited
1
United Kingdom Dormant
Response Electronics Limited
1
United Kingdom Dormant
Response Alarms Limited
1
United Kingdom Dormant
Schlegel Acquisition Holdings Limited United Kingdom Holding company
Schlegel Building Products Limited
1
United Kingdom Dormant
Schlegel Limited
1
United Kingdom Building products
Tyman Equities Limited United Kingdom Dormant
1
Held by subsidiary.
Tyman plc194 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
Registered name and office address
Country of
incorporation Nature of business
Tyman Financial Services Limited
1
United Kingdom Financing company
Tyman Investments1 United Kingdom Dormant
Tyman Management Limited
1
United Kingdom Holding company
Ventrolla Limited
1
United Kingdom Dormant
Window Fabrication and Fixing Supplies Limited
1
United Kingdom Dormant
Y-cam Solutions Limited
1
United Kingdom Smart home security
Zoo Hardware Limited
1
United Kingdom Building products
North American operations
Bay Adelaide Centre, East Tower, 22 Adelaide Street West, Toronto,
ON M5H 4E3
Amesbury Canada Inc1 Canada Holding company
8005 Dixie Road, Unit 8043, Brampton, Ontario L6T 3V1
AmesburyTruth, Inc Canada Holding company
Suite 1700 Park Place, 666 Burrard Street, Vancouver, BC V6C 2X8 Canada
Ashland Hardware Canada Inc. Canada Building products
Roberto Fierro #6351, Industrial Park Aero Juarez, Juarez, Chihuahua
32695
Amesbury Mexico S.De R.L. De C.V.
1
Mexico Building products
Deportistas 7820 Parque Industrial Gema Ciudad, Juarez, Chihuahua
32648
Bilcomex Comercializadora S.De R.L. De C.V.
1
Mexico Building products
Bilcomex S.De R.L. De C.V.1 Mexico Building products
Via Monterrey Matamoros No. 600, Parque Industrial Milenium,
Apoodaca, Nuevo Leon, Mexico, 66600
Ashland Hardware and Casting Systems de Mexico, S.DE R.L. De C.V.
1
Mexico Building products
Centennial Lakes, Office Park V, Suite 800, 3600 Minnesota Drive, Edina,
MN 55435
Amesbury Acquisition Holdings (2) Inc
1
United States Holding company
Amesbury Door Hardware Inc
1
United States Building products
Amesbury Group Inc
1
United States Holding company
Amesbury Group Plastic Profiles Inc
1
United States Building products
Amesbury Industries Inc
1
United States Holding company
Ashland Hardware Holdings, Inc
1
United States Holding company
Ashland Hardware LLC
1
United States Building products
Balance Systems Inc
1
United States Building products
Fastek Products Inc
1
United States Building products
Giesse Group North America Inc
1
United States Building products
Overland Products Company, Inc
1
United States Building products
Schlegel Systems Inc
1
United States Building products
The Bilco Company
1
United States Holding company
The Bilco Holding Company
1
United States Holding company
Truth Hardware Corporation
1
United States Building products
Tyman Ventures Inc
1
United States Holding company
Unipoly Schlegel Holdings US Inc
1
United States Holding company
370 James Street, Suite 201, New Haven, CT 06513
Bilco U.K. Limited1 United States Building products
European operations
Nieuwpoortsesteenweg 102, 8400 Oostende
Schlegel Belgium BVBA
1
Belgium Dormant
Bredowstrasse 33, 22113, Hamburg
Schlegel GmbH
1
Germany Building products
Carl-Zeiss-Strasse 37, 63322 Rödermark
Jatec GmBH
1
Germany In liquidation
1
Held by subsidiary.
30. Subsidiaries continued
Annual Report and Accounts 2021 Tyman plc 195
Notes to the financial statements continued
For the year ended 31 December 2021
Registered name and office address
Country of
incorporation Nature of business
Kolonou 1-3, 12131 Peristeri
Giesse Group Hellas S.A.
1
Greece Building products
Via Tubertini n.1, 40054 Budrio BO, Italy
Giesse S.p.A.
1
Italy Building products
Localita Fondi, 33 25071, Agnosine, Italy
Reguitti S.p.A. Italy Building products
Havenkade 99B, 1973 AK ljmuiden, Holland
Tetchy Investments BV
1
Netherlands Dormant
Constitucion 84, Poligono Industrial Les Grases, 08980 Sant Feliu De
Llobregat, Barcelona
Giesse Group Iberia S.A.
1
Spain Building products
Other international operations
Enrique Becquerel 4873, Area de promocion el Triangulo, CP 1615,
Buenos Aires
Giesse Group Argentina S.A.
1
Argentina Building products
44 Riverside Road, Chipping Norton, NSW 2170
Schlegel Australia Pty (2006) Ltd
1
Australia Holding company
Schlegel Pty Limited1 Australia Building products
617 Alameda Itatinga, Galpao 2, Parte B, Joapirange II, Valinhos-SP
Giesse Brasil Indústria e Comércio de Ferragens e Acessórios Ltda.
1
Brazil Building products
618 Alameda Itatinga, Galpao 2, Parte B, Joapirange II, Valinhos-SP
Schlegel América Latina – Vedação, Esquadrias e Extrusão Ltda.
1
Brazil Building products
No.151 Linjia of Linlianghe Village, Miaocheng Town, Huairou District,
Beijing, 101401
Giesse Hardware (Beijing) Co. Ltd.
1
China Building products
Second floor of No.3 Building, No.1515 of Juxian Road, Hi-Tech District,
Ningbo, Zhejiang Province
TSA Hardware (Ningbo) Co. Limited
1
China Building products
Amesbury (Ningbo) Hardware Trading Co. Ltd
1
China Building products
1 Commonwealth Lane, 6-18, One Commonwealth, Singapore 149544
Schlegel Asia Pte. Ltd
1
Singapore In liquidation
3rd Interchange, Sheikh Zayed Road, Al Quoz Industrial Area 1, Dubai United Arab
Emirates
SchlegeGiesse Middle East Building Materials Trading LLC1
2
Building products
Overseas branch operations
Units 30-32 Martock Business Park, Great Western Road, Martick,
Somerset, TA12 6HB
United Kingdom Building products
Bilco UK Ltd
D-362, MIDC, TTC Industrial Area, Kushket Village, Juinagar, Navi
Mumbai 400705
India Building products
Giesse S.p.A
Istanbul Merkez Şubesi, Halk Sokak Ada IS Merkezi No: 46, Kat: 2 Daire:
4, 34734 Sahrayicedid, Kadikoy, Istanbul
Turkey Building products
Giesse S.p.A
8 Chemin du Jubin, 69570 Dardilly France Building products
Giesse S.p.A
Av. Eng. Duarte Pacheco, 19 - 3° DTO., 1070-100 Lisboa Portugal Building products
Giesse Group Iberia S.A.
1
Held by subsidiary.
2
Shareholding of 49% held by the Group. The Group has managerial control and is entitled to 100% of the profits and cash generated by
the business.
30. Subsidiaries continued
Tyman plc196 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
Note
2021
£’m
2020
£’m
Non-current assets
Investments 4 345.8 344.5
Debtors 5 64.9 –
Current assets
Debtors 5 40.7 104.7
Cash and cash equivalents 0.8 6.0
41.5 110.7
Creditors – amounts falling due within one year 6 (0.3) (40.7)
Net current assets 41.2 70.0
Total assets less current liabilities 451.9 414.5
Creditors – amounts falling due after more than one year 6 (74.5) (33.5)
Net assets 377.4 381.0
Equity
Called up share capital 10 9.8 9.8
Treasury reserve (2.6) (3.4)
Retained earnings 370.2 374.6
– brought forward 374.6 374.3
– profit for the year 10.8 0.6
– other movements (15.2) (0.3)
Total shareholders’ funds 377.4 381.0
The notes on pages 199 to 202 are an integral part of these financial statements.
The financial statements on pages 197 and 198 were approved by the Board on 3 March 2022 and signed on its behalf by:
Jo Hallas Jason Ashton
Chief Executive Officer Chief Financial Officer
Tyman plc
Company registration number: 02806007
Company balance sheet
As at 31 December 2021
Annual Report and Accounts 2021 Tyman plc 197
Company statement of changes in equity
For the year ended 31 December 2021
Called
up share
capital
£’m
Treasury
reserve
£’m
Retained
earnings
£’m
Total
£’m
At 1 January 2020 9.8 (4.3) 374.3 379.8
Total comprehensive income
Profit for the year – – 0.6 0.6
Transactions with owners – 0.9 (0.3) 0.6
Share-based payments
1
– – 0.9 0.9
Issue of own shares to Employee Benefit Trust – 1.2 (1.2) –
Purchase of own shares for Employee Benefit Trust – (0.3) – (0.3)
At 31 December 2020 9.8 (3.4) 374.6 381.0
Total comprehensive income
Profit for the year – – 10.8 10.8
Transactions with owners – 0.8 (15.2) (14.4)
Share-based payments
1
– – 1.5 1.5
Dividends paid – – (15.6) (15.6)
Issue of own shares to Employee Benefit Trust – 1.1 (1.1) –
Purchase of own shares for Employee Benefit Trust – (0.3) – (0.3)
At 31 December 2021 9.8 (2.6) 370.2 377.4
1
Share-based payments include a deferred tax credit of £0.2 million (2020: deferred tax credit of £0.2 million) and a release of the deferred
share bonus plan accrual of £0.3 million (2020: £0.6 million).
The notes on pages 199 to 202 are an integral part of these financial statements.
Tyman plc198 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
Notes to the Company financial statements
For the year ended 31 December 2021
1. Accounting policies
For general information on the Company, see note 1 to the consolidated financial statements.
1.1 Basis of preparation
The financial statements of Tyman plc 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 applicable to companies reporting under FRS 101. The accounting policies have
been consistently applied unless otherwise stated. None of the new standards, which became effective in the year, had a
material impact on the Company.
The financial statements have been prepared on a going concern basis. The Group has performed an assessment of going
concern through modelling several scenarios, including a base case scenario and a severe but plausible scenario. The
Directors are satisfied that the Group and Company have sufficient resources to continue in operation for the foreseeable
future, a period of not less than twelve months from the date of this report. Further details can be found in note 2.2 of the
Group financial statements.
The preparation of financial statements in conformity with FRS 101 requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The
following areas involving key assumptions concerning the future and other key sources of estimation uncertainty that
are significant to the financial statements are listed below and in more detail in the related notes to the Group financial
statements:
• going concern assessment (note 2.2);
• provisions (note 20).
In addition to this, the carrying value of investments is a key source of estimation uncertainty relevant to the Company. See
note 4.
1.1.1 FRS 101 – reduced disclosure exemptions
The following exemptions from the requirements of IFRSs have been applied in the preparation of these financial
statements in accordance with FRS 101:
• paragraphs 45(b) and 46 to 52 of IFRS 2 Share-based Payments;
• IFRS 7 Financial Instruments: Disclosures;
• paragraphs 91 to 99 of IFRS 13 Fair Value Measurement;
• the following paragraphs of IAS 1 Presentation of Financial Statements:
• comparative information requirements in respect of paragraph 79(a)(iv);
• paragraph 10(d), cash flow statements;
• paragraph 16, statement of compliance with all IFRS;
• paragraph 38A, minimum of two primary statements, including cash flow statements;
• paragraphs 38B to 38D, additional comparative information;
• paragraphs 40A to 40D, requirements for a third statement of financial position;
• paragraph 111, cash flow statement information;
• paragraphs 134 to 136, capital management disclosures;
• paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates And Errors;
• IAS 7 Statement of Cash Flows;
• paragraph 17 of IAS 24 Related Party Disclosures; and
• the requirements of IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or
more members of a Group.
1.2 Foreign currency translation
1.2.1 Functional currency and presentation currency
The financial statements are presented in sterling, which is also the functional currency.
1.2.2 Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised
in profit or loss.
Annual Report and Accounts 2021 Tyman plc 199
1. Accounting policies continued
1.3 Financial instruments
Financial assets and liabilities are recognised when the Company becomes party to the contractual provisions of the
instrument and are generally derecognised when the contract that gives rise to it is settled, sold, cancelled or expires.
1.3.1 Financial assets at amortised cost
The Company classifies financial assets at amortised cost only if both of the following criteria are met:
• the asset is held within a business model whose objective is to collect the contractual cash flows; and
• the contractual terms give rise to cash flows that are solely payments of principal and interest.
They are included in current assets, except for maturities greater than twelve months after the end of the reporting period.
These are classified as non-current assets. The Company’s financial assets comprise “debtors” (see note 5) and “cash and
cash equivalents” in the balance sheet.
1.3.2 Financial liabilities held at amortised cost
Financial liabilities held at amortised cost comprise “creditors” (see note 6).
1.4 Investments in subsidiaries
Investments in subsidiaries are stated at cost less any accumulated impairment losses.
1.5 Borrowings
Interest-bearing loans and overdrafts are recognised initially at fair value, net of transaction costs incurred. Interest-
bearing loans are subsequently carried at amortised cost using the effective interest rate method. All borrowing costs are
expensed as incurred, on an accruals basis, to the income statement using the effective interest rate method.
1.6 Share-based payments
The Company operates an equity-settled share-based compensation plan (Long-Term Incentive Plan, “LTIP”) for certain
employees under which the entity receives services from employees as consideration for equity instruments (share options)
of the Company. The fair value of the employee services received in exchange for the grant of options is expensed on a
straight-line basis over the vesting period, based on the Company’s estimate of shares that will eventually vest.
The total amount to be expensed over the vesting period is determined by reference to the fair value of the options
granted, excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in
assumptions about the number of options that are expected to vest. At each balance sheet date, the entity revises its
estimates of the number of options that are expected to vest, with any changes in estimate recognised in the income
statement, with a corresponding adjustment in equity. The fair value of awards granted under LTIP is measured using the
Black-Scholes model.
The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and
share premium when the options are exercised.
The grant by the Company of options over its equity instruments to the employees of subsidiary undertakings in the
Group is treated as a capital contribution. The fair value of employee services received, measured by reference to the
grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a
corresponding credit to equity in the parent entity financial statements.
The social security contributions payable in connection with the grant of the share options are considered an integral part of
the grant itself, and the charge will be treated as a cash-settled transaction.
Details of share-based payments are provided in note 23 of the Group financial statements.
2. Profit attributable to the shareholders of the Company
The Company is an investment holding company. It receives dividend income from subsidiaries and bank interest. It pays
loan interest to a subsidiary. The majority of selling, general and administrative expenses are paid by the Company’s
subsidiary, Tyman Management Limited, including the whole amount of relevant auditors’ remuneration and operating
lease costs.
As permitted by Section 408 of the Companies Act 2006, the Company has elected not to present its own profit and loss
account for the year. The Company reported a profit for the financial year ended 31 December 2021 of £10.8 million (2020:
£0.6 million). £10.5 million of the Company profit relates to dividends received from Group Companies (2020: £Nil).
3. Employees
Other than the Directors, there were no employees of the Company during the year (2020: Nil). Directors’ emoluments are
set out in the Directors’ remuneration report in the Group’s Annual Report on pages 125 to 137.
Notes to the Company financial statements continued
For the year ended 31 December 2021
Tyman plc200 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
4. Investments
4.1 Critical accounting estimate: carrying value of investments
An impairment review using a value in use calculation has been performed for each investment. The calculation of the
value in use involves judgement in determining the appropriate assumptions to use in the calculations, including forecasted
cashflows and appropriate discount rates. The same information as used in the Group goodwill impairment assessment is
used for assessing the carrying value of investments in subsidiaries. For further information, see pages 167 to 169 of the
Group financial statements.
4.2 Carrying value of investments
£’m
Cost
At 1 January 2020 344.3
Capital contribution relating to share-based payments 0.9
At 31 December 2020 345.2
Capital contribution relating to share-based payments 1.3
At 31 December 2021 346.5
Impairment
At 1 January 2020 (0.7)
At 31 December 2020 (0.7)
At 31 December 2021 (0.7)
Carrying amount
At 1 January 2020 343.6
At 31 December 2020 344.5
At 31 December 2021 345.8
All of the above investments are in unlisted shares. The Directors believe that the carrying value of the investments is
supported by the recoverable amount of their underlying assets.
5. Debtors
Note
2021
£’m
2020
£’m
Amounts receivable within one year
Amounts owed by Group undertakings 40.7 –
40.7 –
Amounts receivable after more than one year
Amounts owed by Group undertakings 64.2 104.4
Corporation tax asset 0.1 –
Deferred tax asset 9 0.6 0.3
64.9 104.7
The amounts owed by Group undertakings are unsecured and interest free. Of the total amount owed by Group
undertakings, £40.7 million is due to be repaid in May 2022 and £33.3 million is due to be repaid in November 2024. The
remainder of the Group receivable balance of £30.9 million is recoverable on demand but unlikely to be received within one
year so is classified as non-current.
6. Creditors
Note
2021
£’m
2020
£’m
Amounts falling due within one year
Private placement notes 7 – (40.4)
Other creditors (0.3) (0.3)
(0.3) (40.7)
Amounts falling due after more than one year
Private placement notes 7 (33.3) (32.9)
Amounts owed to Group undertakings (0.5) (0.6)
Bank borrowings (40.7) –
(74.5) (33.5)
The amounts owed to Group undertakings are interest free, repayable on demand and unsecured.
Annual Report and Accounts 2021 Tyman plc 201
Notes to the Company financial statements continued
For the year ended 31 December 2021
7. Private placement notes
The senior notes relate to the issuance of a private debt placement with US financial institutions totalling US$45,000,000
(2020: US$100,000,000). US$55,000,000 was repaid in November 2021. Refer to note 18.2.2 of the Group financial
statements.
Details of the private placement notes, which are unsecured, are as follows:
2021
£’m
2020
£’m
Wholly repayable in 2021 – (40.4)
Wholly repayable in 2024 (33.3) (33.0)
Capitalised borrowing costs – 0.1
(33.3) (73.3)
8. Borrowings
Borrowings relate to a drawdown of the £240 million committed revolving credit facility used to repay the US$55,000,000
private debt placement in November 2021.
2021
£’m
2020
£’m
Bank borrowings (40.7) –
(40.7) –
9. Deferred tax asset
2021
£’m
2020
£’m
At 1 January 0.3 0.3
Income statement credit/(charge) 0.1 (0.1)
Tax credit relating to components of other comprehensive income 0.2 0.1
At 31 December 0.6 0.3
The deferred tax asset relates to share-based payments. There are no unused tax losses or unused tax credits.
10. Called up share capital
The share capital of the Company is as set out in note 22 of the Group financial statements.
11. Financial commitments
At 31 December 2021, the Company had future lease commitments on land and buildings under non-cancellable operating
leases. These commitments were met on the Company’s behalf by Tyman Management Limited, a subsidiary. The carrying
value of the ROU asset held by Tyman Management Limited was £0.5 million (2020: £0.7 million) and of lease liabilities was
£0.5 million (2020: £0.7 million). See further details regarding the nature of lease commitments in note 12 of the Group
financial statements.
12. Dividends
The dividends of the Company are set out in note 24 of the Group financial statements.
13. Related party transactions
The Company has taken advantage of the exemption in accordance with FRS 101, as a wholly owned subsidiary, not to
disclose details of related party transactions in accordance with IAS 24 Related Party Disclosures required by this standard.
Tyman plc202 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
Alternative Performance Measure reconciliations
APMs used in key performance indicators
Like-for-like or LFL revenue and operating profit
Definition
The comparison of revenue or adjusted operating profit, as appropriate, excluding the impact of any acquisitions made
during the current year and, for acquisitions made in the comparative year, excluding from the current year result the
impact of the equivalent current year pre-acquisition period. For disposals, the results are excluded for the whole of the
current and prior period. The prior period comparative is retranslated at the current period average exchange rate. The
Group considers these amendments to provide shareholders with a comparable basis from which to understand the organic
trading performance in the year.
Purpose
This measure is used by management to evaluate the Group’s organic growth in revenue and adjusted operating profit
year-on-year, excluding the impact of M&A and currency movements.
Reconciliation/calculation
2021
£’m
2020
£’m
Reported revenue 635.7 572.8
Revenue from business disposed of in prior year – (2.8)
Effect of exchange rates – (28.5)
Like for like revenue 635.7 541.5
Adjusted operating profit 90.0 80.3
Operating profit from business disposed of in prior year – 2.2
Effect of exchange rates – (4.6)
Like for like adjusted operating profit 90.0 77.9
Adjusted operating profit and adjusted operating margin
Definition
Operating profit before amortisation of acquired intangible assets, impairment of goodwill and acquired intangible assets,
and exceptional items.
Adjusted operating margin is adjusted operating profit divided by revenue.
Purpose
This measure is used to evaluate the trading operating performance of the Group.
Exceptional items are excluded from this measure to provide an improved understanding of the elements of financial
performance during the year to facilitate comparison with prior periods and to assess the underlying trends in financial
performance. Exceptional items include one-off redundancy and restructuring costs, transaction costs and integration costs
associated with merger and acquisition activity, as well as credits relating to profit on disposal of businesses and property
provision releases.
Amortisation of acquired intangible assets is excluded from this measure as this is a significant non-cash fixed charge that
is not affected by the trading performance of the business.
Impairment of acquired intangible assets and goodwill is excluded, as this can be a significant non-cash charge.
Reconciliation/calculation
A reconciliation of adjusted operating profit is included on the face of the income statement on page 149.
2021
£’m
2020
£’m
Adjusted operating profit 90.0 80.3
Revenue 635.7 572.8
Adjusted operating margin (%) 14.2% 14.0%
Leverage
Definition
Adjusted net debt translated at the average exchange rate for the year divided by adjusted EBITDA as defined in the
lending agreement.
Purpose
This measure is used to evaluate the ability of the Group to generate sufficient cash flows to cover its contractual debt
servicing obligations.
Annual Report and Accounts 2021 Tyman plc 203
Reconciliation/calculation
2021
£’m
2020
£’m
Adjusted net debt (at average exchange rate) 91.0 105.3
Adjusted EBITDA 102.6 95.2
Leverage (x) 0.9x 1.1x
Return on capital employed (ROCE)
Definition
Adjusted operating profit as a percentage of the last thirteen-month average capital employed.
Purpose
This measure is used to evaluate how efficiently the Group’s capital is being employed to improve profitability.
Reconciliation/calculation
2021
£’m
2020
£’m
Adjusted operating profit 90.0 80.3
Average capital employed 619.4 653.8
ROCE (%) 14.5% 12.3%
Adjusted earnings per share
Definition
Adjusted profit after tax divided by the basic weighted average number of ordinary shares in issue during the year,
excluding those held as treasury shares.
Purpose
This measure is used to determine the improvement in adjusted EPS for our shareholders.
Reconciliation/calculation
A reconciliation is provided in note 9 on page 166.
Dividend cover
Definition
Adjusted earnings per share divided by the total dividend per share for the financial year.
Purpose
This measure provides an indication of the dividend paid relative to adjusted earnings for comparison with the Group’s
dividend policy.
Reconciliation/calculation
2021 2020
Basic adjusted earnings per share (p) 32.1 27.2
Total dividend per share (p) 12.9 4.0
Dividend cover (x) 2.5x 6.8x
Alternative Performance Measure reconciliations continued
Tyman plc204 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
Operating cash conversion and operational cash flow
Definition
Operational Cash Flow
Net cash generated from operations before income tax paid, exceptional costs cash settled in the year and pension
contributions, and after proceeds on disposal of property, plant and equipment, payments to acquire property, plant and
equipment and payments to acquire intangible assets.
Operating Cash Conversion
Operational cash flow divided by adjusted operating profit.
Purpose
These measures are used to evaluate the cash flow generated by operations in order to pay down debt, return cash to
shareholders and make further investment in the business.
Reconciliation/calculation
2021
£’m
2020
£’m
Net cash generated from operations 57.0 95.9
Income tax paid 17.7 13.8
Exceptional costs 0.2 4.2
Pension contributions 2.8 1.7
Proceeds on disposal of PPE 0.8 –
Payments to acquire PPE and intangible assets (20.6) (10.5)
Operational cash flow 57.9 105.1
Operational cash flow 57.9 105.1
Adjusted operating profit 90.0 80.3
Operating cash conversion (%) 64.3% 130.9%
Other APMs
EBITDA and adjusted EBITDA
Definition
EBITDA
Adjusted operating profit with depreciation, amortisation of computer software, and share-based payments expenses
added back.
Adjusted EBITDA
EBITDA plus the pre-acquisition EBITDA of businesses acquired during the year covering the relevant pre-acquisition period
less the EBITDA of businesses disposed of during the year.
Purpose
This measure is used as the numerator in calculating covenants under the terms of the Group’s revolving credit facility.
Reconciliation/calculation
2021
£’m
2020
£’m
Adjusted operating profit 90.0 80.3
Depreciation of property, plant and equipment 11.5 12.7
Amortisation of computer software 1.3 1.5
IFRS 16 (1.2) (1.2)
Share-based payments expense 1.0 0.1
EBITDA of businesses disposed of during the year – 1.8
Adjusted EBITDA 102.6 95.2
Annual Report and Accounts 2021 Tyman plc 205
Alternative Performance Measure reconciliations continued
Adjustment to net cash generated from operations
Definition
The add back of net finance costs, depreciation, amortisation of intangible assets, impairment of PPE, profit on disposal of
PPE, write-off of inventory fair value adjustments, pension service costs and expected selling, general and administrative
costs, non-cash provision movements, profit on disposal of business and share-based payments.
Purpose
These are non-cash, non-operating items which are added back to profit to derive cash generated from operations in the
cash flow statement.
Reconciliation/calculation
See reconciliation in note 25 on page 193.
Constant currency or CC
Definition
Comparison with the comparative period translated at the current year’s average or closing exchange rate as applicable.
Purpose
This measure is used by management to measure performance of the business removing the effect of changes in foreign
exchange rates which are outside of the control of management.
Reconciliation/calculation
It is not practicable to present a reconciliation of all CC measures used. A table showing the current and comparative period
average and closing exchange rates is presented on page 213. A sensitivity analysis showing the impact of fluctuations in
exchange rates is also presented on page 44.
Free cash flow
Definition
Operational cash flow after deducting pension contributions, income tax paid, net interest paid and exceptional cash costs
settled in the year.
Purpose
This measure is used to evaluate the cash flow generated by the business operations after expenditure incurred on
maintaining capital assets.
Reconciliation/calculation
See page 42 for reconciliation between operational cash flow and free cash flow.
Interest cover
Definition
EBITDA divided by the net interest payable on bank loans, private placement notes and overdrafts and interest income from
short-term bank deposits.
Purpose
This measure is used to evaluate the profit available to service the Group’s interest costs. This is one of the covenants the
Group is subject to under the terms of its revolving credit facility.
Reconciliation/calculation
2021
£’m
2020
£’m
EBITDA 102.6 93.4
Net interest 5.9 8.9
Interest cover (x) 17.6x 10.5x
Tyman plc206 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
Adjusted administrative expenses
Definition
Administrative expenses before exceptional items, amortisation of acquired intangible assets, impairment of acquired
intangible assets and impairment of acquired goodwill.
Purpose
This measure is used to evaluate the adjusted administrative expenses of the business excluding the effect of exceptional
items and amortisation of acquired intangible assets which is a significant charge that is not directly affected by trading.
Reconciliation/calculation
2021
£’m
2020
£’m
Administrative expenses (138.6) (132.4)
Exceptional items (0.6) 1.8
Amortisation of acquired intangible assets 17.5 18.8
Adjusted administrative expenses (121.7) (111.8)
Adjusted effective tax rate
Definition
Adjusted tax charge divided by adjusted profit before tax.
Purpose
This measure is used to evaluate the tax charge relative to profit arising on the adjusted trading activity of the Group.
Reconciliation/calculation
2021
£’m
2020
£’m
Adjusted tax charge (18.8) (15.3)
Adjusted profit before tax 81.5 68.4
Adjusted effective tax rate (%) (23.1%) (22.4%)
Adjusted gross debt
Definition
Interest-bearing loans and borrowings, with unamortised borrowing costs and lease liabilities added back.
Purpose
This gives a measure of the gross amount owed to lenders, without the effect of unamortised borrowing costs for which
cash outflow has already occurred.
Reconciliation/calculation
2021
£’m
2020
£’m
Borrowings (including lease liabilities) (203.9) (222.9)
Lease liabilities 54.8 53.8
Unamortised borrowing costs (0.7) (1.2)
Adjusted gross debt (149.8) (170.3)
Annual Report and Accounts 2021 Tyman plc 207
Alternative Performance Measure reconciliations continued
Adjusted net debt
Definition
Interest-bearing loans and borrowings, net of cash and cash equivalents, plus unamortised borrowing costs and lease
liabilities added back.
Purpose
This gives a measure of the gross amount owed to lenders, without the effect of unamortised borrowing costs.
Reconciliation/calculation
2021
£’m
2020
£’m
Borrowings (including lease liabilities) (203.9) (222.9)
Cash 58.1 69.7
Lease liabilities 54.8 53.8
Unamortised borrowing costs (0.7) (1.2)
Adjusted net debt (91.7) (100.6)
Adjusted profit before tax and adjusted profit after tax
Definition
Profit before amortisation of acquired intangible assets, impairment of goodwill and acquired intangible assets, exceptional
items, unwinding of discount on provisions, gains and losses on the fair value of derivative financial instruments,
amortisation of borrowing costs, accelerated amortisation of borrowing costs and the associated tax effect.
Purpose
This measure is used to evaluate the profit generated by the Group through trading activities. In addition to the items
excluded from operating profit above, the gains and losses on the fair value of derivative financial instruments, amortisation
of borrowing costs, accelerated amortisation of borrowing costs and the associated tax effect are excluded. These items are
excluded as they are of a non-trading nature.
Reconciliation/calculation
2021
£’m
2020
£’m
Profit before tax 64.0 47.6
Exceptional items (0.6) 1.8
Loss/(gain) on revaluation of fair value hedge 0.1 (0.3)
Amortisation of borrowing costs 0.5 0.5
Amortisation of acquired intangible assets 17.5 18.8
Adjusted profit before taxation 81.5 68.4
Income tax charge (14.4) (10.4)
Adjusted tax effect (4.4) (4.9)
Adjusted profit after taxation 62.7 53.1
Adjusted tax charge
Definition
Tax charge adjusted for the tax effect of amortisation of acquired intangible assets, impairment of goodwill and acquired
intangible assets, exceptional items, unwinding of discount on provisions, gains and losses on the fair value of derivative
financial instruments, amortisation of borrowing costs, accelerated amortisation of borrowing costs.
Purpose
This measure is used to evaluate the tax charge arising on the adjusted trading activity of the Group.
Reconciliation/calculation
2021
£’m
2020
£’m
Tax charge (14.4) (10.4)
Tax effect of adjusted profit adjustments (4.4) (4.9)
Adjusted tax charge (18.8) (15.3)
Tyman plc208 Annual Report and Accounts 2021
Financial Statements
STRATEGIC REPORT FINANCIAL STATEMENTS
Disclosure
GRI
code Page
1. The Organisation and Reporting Practices
Organisational details 2–1 8
Entities included in the organisation’s sustainability reporting 2–2 194
Reporting period, frequency and contact point 2–3 –
Restatements of information 2–4 55,58,65
External assurance 2–5 –
2. Activities and Workers
Activities, value chain and other business relationships 2–6 8–19
Employees 2–7 62
Workers who are not employees 2–8 62
3. Governance
Governance structure and composition 2–9 92–100
Nomination and selection of the highest corporate body 2–10 102–103
Chair of the highest corporate body 2–11 92–100
Role of the highest governance body in overseeing the
management of impacts
2–12 69,97–98
Delegation of responsibility for managing impacts 2–13 49,69,97–98
Role of the highest governance body in sustainability reporting 2–14 69
Conflicts of interest 2–15 92–93,96
Communication of critical concerns 2–16 60,96–97
Collective knowledge of the highest governance body 2–17 98–99
Evaluation of the performance of the highest governance body 2–18 98–99
Remuneration policies 2–19 114–123,129,135
Process to determine remuneration 2–20 114–116
Annual total compensation ratio 2–21 134
4. Strategy, policies and practices
Statement of sustainable development policy 2–22 46
Policy commitments 2–23 46,https://www.tymanplc.com/sustainability
Embedding policy commitments 2–24 20–23,46–77
Processes to remediate negative impacts 2–25 46–77
Mechanisms for seeking advice and raising concerns 2–26 61
Compliance with laws and regulations 2–27 49,54,90
Membership associations 2–28 67
5. Stakeholder engagement
Approach to stakeholder engagement 2–29 81–83
Collective bargaining agreements 2–30 Not disclosed
This report has been prepared with reference to the GRI Standards:
General Disclosures 2021 (GRI 2)
GRI Standard Content Index
Annual Report and Accounts 2021 Tyman plc 209
Tyman material topics 2021 (GRI 3)
Disclosure
GRI
code Page
Disclosure of material topics
Process to determine material impacts 3–1 https://www.tymanplc.com/sustainability/
materiality-exercise
List of material topics 3–2 https://www.tymanplc.com/sustainability/
materiality-exercise
Management of material topics 3–3 46-77
Circular economy
GRI-301 Materials 2016 301 56,66
Packaging and wate
GRI–301 Materials 2016 301 55-57,66
GRI–306 Effluents and waste 2016 306 58
GRI–306 Waste 2020 306 58
Material sourcing
GRI–408 Child labour 2016 408 67, https://www.tymanplc.com/sustainability/
sustainable-culture/ethics
GRI–409 Forced or compulsory labour 409 67, https://www.tymanplc.com/sustainability/
sustainable-culture/ethics
GRI–308 Supplier environmental assessment 308 -
GRI–414 Supplier social assessment 414 -
GRI–301 Materials 2016 301 -
GRI–407 Freedom of association and collective bargaining 407 Not disclosed
Product innovation
GRI–201 Economic performance 201 65
GRI–416 Customer health and safety 416 64-67
GRI–301 Materials 2016 201 66-67
GRI–305 Emissions 2016 305 64-65
GRI–413 Local communities 2016 413 65
Employee health, safety and wellbeing
Occupational health and safety 2018 403 48-52
Climate change and greenhouse gas emissions
GRI–302 Energy 2016 302 54-55
GRI–305 Emissions 2016 305 55
Energy management
GRI–302 Energy 2016 302 54
Water stewardship
GRI–303 Water 2016 303 58
Ethical business practices
GRI–205 Anti–corruption 205 59-60, https://www.tymanplc.com/
sustainability/sustainable-culture/ethics
GRI–206 Anti–competitive behaviour 206 59-60, https://www.tymanplc.com/
sustainability/sustainable-culture/ethics
GRI–415 Public policy 415 139
Diversity and inclusion
GRI–405 Diversity and equal opportunity 2016 405 62
GRI–406 Non–discrimination 406 62
Local communities
GRI–413 Local communities 2016 413 63
Training and development
GRI–404 Training and education 404 61
GRI Standard Content Index continued
Tyman plc210 Annual Report and Accounts 2021
STRATEGIC REPORT FINANCIAL STATEMENTS
Definitions and glossary of terms
AGM Annual general meeting
APM Alternative performance measure
ARGE European Federation of Associations of Locks & Builders Hardware Manufacturers
BPR Tyman internal business performance reviews
Bps Basis points
BREEAM Building research establishment environmental assessment method (building sustainability
certification scheme developed in the UK)
BSI Kitemark UK product and service quality trade mark, owned and operated by the British Standards
Institution
C2C Cradle to Cradle product certification scheme for safer, more sustainable products
CAGR Compound annual growth rate
CGU Cash generating unit
CHIC Concealed hardware innovative components
CIPS Chartered Institute of Purchasing and Supply
CO
2
Carbon dioxide
DEFRA UK Department of Food and Environmental Affairs
DSBP Deferred share bonus plan
EAP Employee Assistance Programme (counselling and support services for employee wellbeing)
EB Trust (EBT) The Tyman employees’ benefit trust
EBITDA Earnings before interest, taxation, depreciation and amortisation
EPD Environmental product declaration
EPS Earnings per share
ERP Enterprise resource planning
ESG Environmental, social and governance
ESPP Employee stock service plan
ExCo Executive Committee
FCA Financial Conduct Authority
FTE Full time equivalent (headcount)
FVPL Fair value through profit or loss
GAAP Generally accepted accounting principles
GCC Gulf Cooperation Council
GDPR General data protection regulation
GHG Greenhouse gas (emissions) arising from direct operations and/or indirectly via the value
chain
GRI Global Reporting Initiative – framework providing a common language and accepted
definitions used in sustainability reporting
HSS Health, safety and sustainability
IASB International Accounting Standards Board
IEA International Energy Agency
IFRIC International Financial Reporting Interpretations Committee
IFRS International Financial Reporting Standards
IIA Code of Practice The Chartered Institute of Internal Auditors Code of Practice
IoT Internet of things
IPCC Intergovernmental panel on climate change
ISO 14001 International Organization for Standardization standard for environmental management
systems
ISO 9000 International Organization for Standardization standard for quality management systems
KPI Key performance indicator
LEED Leadership in energy and environmental design standards (building sustainability certification
scheme developed in the US)
LFL Like-for-like
Annual Report and Accounts 2021 Tyman plc 211
Definitions and glossary of terms continued
LIBOR London inter-bank offered rate
LIRA Leading Indicator of Replacement Activity
LOTO Lock out, tag out safety procedure to ensure machines are adequately locked
LTI Lost time incident
LTIFR Lost time incident frequency rate – a core safety metric expressing the number of lost time
incidents as a ratio per one million hours worked
LTIP Long-term incentive plan
LTM Last twelve months
M&A Mergers and acquisitions
NED Non-executive director
NGFS Network for greening the financial system
NPD New product development
OCR Organisation Capability Review
OECD Organisation for Economic Co-operation and Development
OEM Original equipment manufacturer
PMI Purchasing Managers’ Index
PPE Property, plant and equipment
ROAI Return on acquisition investment
RCF Revolving credit facility
RMI Renovation, maintenance and improvement
ROCE Return on capital employed
ROU Right-of-use
SASB Sustainability Accounting Standards Board
SAYE Save as you earn
SBT Science Based Target
SBTi Science Based Target initiative
SEA UK’s Surface Engineering Association
SECR UK Government’s streamlined energy and carbon reporting
SKU Stock keeping unit
Smartware Integrated and mechanical and electronic security solutions
SONIA Sterling Over Night Index Average
STEM Science, Technology, Engineering and Mathematics
STIP Short term incentive plan
TCFD Taskforce on climate-related financial disclosures
TCO
2
e Tonnes of CO
2
equivalent (a standard measure for carbon emissions)
TFR Trattamento di fine Rapporto (Italian pension scheme)
TRIR Total recordable incident rate (a core safety metric including lost time and other recordable
incidents involving restricted duty or medical intervention beyond first aid, expressed as a
ratio per one million hours worked)
TSR Total shareholder return
UKAS UK Accreditation Service
UN SDG United Nations Sustainable Development Goals
US EPA’s EEIO US Environmental Protection Agency’s Environmentally-Extended Input-Output
USPP US Private Placement
VIU Value in use
WELL Well building standard in place to enhance human health and wellbeing
Tyman plc212 Annual Report and Accounts 2021
STRATEGIC REPORT FINANCIAL STATEMENTS
Roundings and exchange rates
Roundings
Percentage numbers have been calculated using rounded figures from the financial statements, which may lead to small
differences in some figures and percentages quoted.
Exchange rates
The following foreign exchange rates have been used in the financial information to translate amounts into sterling:
Closing rates 2021 2020
US dollar 1.3512 1.3650
Euro 1.1912 1.1129
Australian dollar 1.8607 1.7708
Canadian dollar 1.7159 1.7393
Brazilian real 7.5285 7.0898
Average rates 2021 2020
US dollar 1.3757 1.2836
Euro 1.1631 1.1251
Australian dollar 1.8321 1.8626
Canadian dollar 1.7244 1.7200
Brazilian real 7.4216 6.6115
Annual Report and Accounts 2021 Tyman plc 213
Five-year summary
Statutory measures
2021
£’m
2020
£’m
2019
£’m
2018
£’m
2017
£’m
Revenue 635.7 572.8 613.7 591.5 522.7
Net finance costs (9.1) (12.1) (15.7) (11.6) (9.4)
Profit before taxation 64.0 47.6 24.8 38.9 34.5
Taxation (14.4) (10.4) (7.1) (12.5) (3.3)
Profit after taxation 49.6 37.2 17.7 26.3 31.2
Total number of shares in issue (’000) 196,762 196,762 196,762 196,762 178,582
Dividends per share declared (p) 12.9p 4.0p 3.9p
2
12.0p 11.3p
Average monthly number of employees 4,295 4,035 4,146 4,303 3,904
APMs and KPIs
2021 2020 2019 2018 2017
LFL revenue growth (%)1 17.4% (6.0)% (1.8)% 2.7% 1.7%
LFL adjusted operating profit growth (%)1 15.6% (5.5%) (4.8%) (4.8%) (1.5%)
Adjusted operating profit (£’m)
1
90.0 80.3 85.4 83.6 76.8
Adjusted operating margin (%)
1
14.2% 14.0% 13.9% 14.1% 14.7%
Adjusted profit before taxation (£’m)
1
81.5 68.4 71.0 72.7 68.3
Adjusted net debt (£’m)
1
(91.7) (100.6) (164.5) (210.7) (163.7)
Adjusted basic earnings per share (p)
1
32.1p 27.2p 27.5p 27.7p 26.9p
Return on capital employed (%)
1
14.5% 12.3% 12.0% 13.4% 13.6%
Operating cash conversion (%)
1
64.3% 130.9% 132.2% 92.4% 85.6%
Leverage (x)
1
0.9x 1.1× 1.7× 2.0× 1.8×
1
See Alternative performance measures on pages 203 to 208.
2
The 2019 final dividend of 8.35p was withdrawn due to COVID-19.
Tyman plc214 Annual Report and Accounts 2021
Tyman plc
29 Queen Anne’s Gate
London
SW1H 9BU
enquiries@tymanplc.com
www.tymanplc.com