Howden Joinery Group PLC

Annual Report • Mar 20, 2024

213800KC1LJOJTY3JP452022-12-252023-12-30iso4217:GBP213800KC1LJOJTY3JP452021-12-262022-12-24iso4217:GBPxbrli:shares213800KC1LJOJTY3JP452023-12-30213800KC1LJOJTY3JP452022-12-24213800KC1LJOJTY3JP452021-12-25ifrs-full:IssuedCapitalMember213800KC1LJOJTY3JP452021-12-25ifrs-full:CapitalRedemptionReserveMember213800KC1LJOJTY3JP452021-12-25ifrs-full:SharePremiumMember213800KC1LJOJTY3JP452021-12-25ifrs-full:ReserveOfSharebasedPaymentsMember213800KC1LJOJTY3JP452021-12-25ifrs-full:TreasurySharesMember213800KC1LJOJTY3JP452021-12-25ifrs-full:RetainedEarningsMember213800KC1LJOJTY3JP452021-12-25213800KC1LJOJTY3JP452021-12-262022-12-24ifrs-full:IssuedCapitalMember213800KC1LJOJTY3JP452021-12-262022-12-24ifrs-full:CapitalRedemptionReserveMember213800KC1LJOJTY3JP452021-12-262022-12-24ifrs-full:SharePremiumMember213800KC1LJOJTY3JP452021-12-262022-12-24ifrs-full:ReserveOfSharebasedPaymentsMember213800KC1LJOJTY3JP452021-12-262022-12-24ifrs-full:TreasurySharesMember213800KC1LJOJTY3JP452021-12-262022-12-24ifrs-full:RetainedEarningsMember213800KC1LJOJTY3JP452022-12-24ifrs-full:IssuedCapitalMember213800KC1LJOJTY3JP452022-12-24ifrs-full:CapitalRedemptionReserveMember213800KC1LJOJTY3JP452022-12-24ifrs-full:SharePremiumMember213800KC1LJOJTY3JP452022-12-24ifrs-full:ReserveOfSharebasedPaymentsMember213800KC1LJOJTY3JP452022-12-24ifrs-full:TreasurySharesMember213800KC1LJOJTY3JP452022-12-24ifrs-full:RetainedEarningsMember213800KC1LJOJTY3JP452022-12-252023-12-30ifrs-full:IssuedCapitalMember213800KC1LJOJTY3JP452022-12-252023-12-30ifrs-full:CapitalRedemptionReserveMember213800KC1LJOJTY3JP452022-12-252023-12-30ifrs-full:SharePremiumMember213800KC1LJOJTY3JP452022-12-252023-12-30ifrs-full:ReserveOfSharebasedPaymentsMember213800KC1LJOJTY3JP452022-12-252023-12-30ifrs-full:TreasurySharesMember213800KC1LJOJTY3JP452022-12-252023-12-30ifrs-full:RetainedEarningsMember213800KC1LJOJTY3JP452023-12-30ifrs-full:IssuedCapitalMember213800KC1LJOJTY3JP452023-12-30ifrs-full:CapitalRedemptionReserveMember213800KC1LJOJTY3JP452023-12-30ifrs-full:SharePremiumMember213800KC1LJOJTY3JP452023-12-30ifrs-full:ReserveOfSharebasedPaymentsMember213800KC1LJOJTY3JP452023-12-30ifrs-full:TreasurySharesMember213800KC1LJOJTY3JP452023-12-30ifrs-full:RetainedEarningsMember Made in the UK Annual Report and Accounts 2023 Howden Joinery Group Plc 2023 Available through the Trade only The UK’s number 1 trade kitchen supplier Annual Report  Howden Joinery Group Plc Financial Statements Page Title The UK’s #1 specialist trade-only kitchen supplier We make builders’ lives simpler. We help them to achieve exceptional results   Contents Strategic Report How we create value Financial Statements  Governance How we preserve value Additional Information Additional information 02 Performance in 2023 04 Howdens at a glance 08 Our purpose, our culture & values, our market, our strategy and  16 Chairman’s statement 19  28 Key performance indicators 30 Financial review 36 Risk management 38 Principal risks and uncertainties 42  69  148 Independent auditor’s report 162 Consolidated income statement 162 Consolidated statement of comprehensive income 163  164 Consolidated statement of changes in equity 165  166  statements 205  206 Company statement of changes in equity 207  212 Parent company and all  213 Five year record 214 Shareholder and share capital information 216 Shareholder Ranges 216  217  74 Corporate governance report 76 Board of Directors, key Board activity, and Executive Committee and Company Secretary 82 Directors' duties (Section 172(1) statement) 84 Stakeholder engagement 92 2018 UK Corporate Governance Code: application and compliance 98 Nominations Committee report 108 Remuneration Committee report 132 Audit Committee report 140  143 Directors’ report, Directors’ statements  information Financial Statements Additional Information Governance Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report  Operational highlightsFinancial highlights Near-term Science-based Net Zero targets approved Making more products in our  Continuing to strengthen our  Revenue Gross margin £2.3bn 60.8% Operating  Earnings per share £340m 46.5p   2023 FY dividend £328m 21.0p £114.1m £283m £50m Dividends paid in year Net cash at year end Share buybacks * 2021 included a special dividend of £54.1m.  2023, against record prior year comparatives and in, as we anticipated, a more challenging marketplace.  programme, which is focused on our key capabilities and gives us, end to end, a stronger business. new UK depots 32 new depots  new depots in Republic  new kitchen ranges 5 5 23 £2.3bn 60.9% £415m 65.8p £406m £308m £250m £115.0m 20.6p £2.3bn 60.8% £340m 46.5p £328m £283m £50m £114.1m 21.0p £1.6bn 62.3% £260m 35.0p £261m £267m £126m £70.6m 3.9p £1.5bn 60.1% £196m 25.0p £185m £431m £10m £0.0m 18.2p £2.1bn 61.6% £402m 53.2p £390m £515m £50m £133.6m 19.5p 2023 2023 2023 2023 2023 2023 2023 2023 2023 2022 2022 2022 2022 2022 2022 2022 2022 2022 2021 2021 2021 2021 2021 2021 2021 2021 2021 2020 2020 2020 2020 2020 2020 2020 2020 2020 2019 2019 2019 2019 2019 2019 2019 2019 2019 Financial Statements Additional Information Governance 03 Howden Joinery Group Plc Annual Report & Accounts 2023 02 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic Report Page TitleStrategic Report Page TitlePerformance in 2023Strategic Report Strategic Report Resources and relationships • Decentralised business model • Empowered local depot managers, close to the trade • Trusted customer relationships with around half a million builders • Local depot network  • The right product.   Outcomes • Happy builders and end-users   margins and strong cash generation • Returns to shareholders – our employees – new depots – new product – new manufacturing and logistics – digital • Giving back to local communities • Science-based Net Zero targets in place Resources and relationships • Trade-only, with excellent service • Helping our trade customers to succeed     – Design and planning services – Home visits for end-users – Marketing materials – The right product. In-stock in local depots   • Digital tools to help the trade and end-users Supporting the builder Worthwhile  UK  & distribution Global sourcing Nationwide depot network Resources and relationships • Skilled and motivated workforce • UK’s largest kitchen supplier – economies  • Our own factories – the choice to make or buy • Our own warehousing and distribution network Resources and relationships • Global supply chain expertise • Trusted supplier relationships, and the scale of our operations,    • Responsible purchasing practices The UK’s largest specialist trade-only kitchen supplier Howdens at a glance At Howdens, we aim to be the best at what we do – the supply of kitchens, joinery products and related services to tradespeople. We do this by having a single-minded focus on our trade customers with all our operations designed and structured around making life easier for them, so that by trading with us they can get their jobs done right first time for their customers. Financial Statements Additional Information Governance 05 Howden Joinery Group Plc Annual Report & Accounts 2023 04 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic Report Page TitleStrategic Report Strategic Report Page TitleHowdens at a glance How we create value Strategic Report Performance and Howdens at a glance Chief Executive  review Our purpose, culture and values, market, strategy and business model KPIs  statement Risk management and principal risks and uncertainties Sustainability matters Going concern and Viability Statements 02 19 08 28 16 36 42 69 Financial review 30 08 Our purpose, our culture & values, our market, our strategy and our business model 16 Chairman’s statement 19  28 Key performance indicators 30  36 Risk management 38 Principal risks and uncertainties 42 Sustainability matters 69 Going concern and Viability statements Strategic Report Financial Statements Additional Information Governance 07 Howden Joinery Group Plc Annual Report & Accounts 2023 06 Howden Joinery Group Plc Annual Report & Accounts 2023 06 0706 07 Strategic Report Strategic ReportPage Title Page Title Strategic Report Our purpose-driven approach Our purpose Business model Culture & values Sustainability Governance Markets Long-term value for our stakeholders Strategy Risks To help our trade customers achieve exceptional results for their       Focus on climate  A clear governance     supported by UK manufacturing and        Effective risk monitoring  See page 13 See page 12 See page 10 See page 42See page 11 See page 72 See page 14 See page 36 Culture is aligned with purpose, values and strategy Our business model and strategy generate value for a range of stakeholders Sustainable behaviour preserves our culture, maintains focus on our business model, mitigates our risks and addresses the needs of our stakeholders Our governance framework guides all decisions and outcomes Our purpose drives our business model and shapes our strategic decisions We respond to external opportunities and mitigate threats Strategic Report Financial Statements Additional Information Governance 09 Howden Joinery Group Plc Annual Report & Accounts 2023 08 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Page Title Our purpose, our culture & values, our market, our strategy and our business model Strategic Report Our purpose Our culture and values    are clear that the purpose and future success of our business    Trade service and convenience      Product leadership  the right product styles that are attractive to consumers,   Trade value Best local trade prices enabled by in-house manufacturing,   To help our trade customers achieve exceptional results for their customers and to  Worthwhile for our trade customers •  •  •  •  •  •  Worthwhile for our staff •    •  •   Worthwhile for our suppliers •  •   •   Worthwhile for our other stakeholders • Delivering consistent long-term value for shareholders   •  •  •  •  Customers Environment and communities Shareholders Pensioners Staff Suppliers and landlords Government and local authorities Howdens was founded on the principle that the business should be worthwhile for all concerned — customers, homeowners, tenants, local communities, our suppliers, our investors,  This founding principle has shaped our business model and our strategic decisions   Strategic Report Financial Statements Additional Information Governance 11 Howden Joinery Group Plc Annual Report & Accounts 2023 10 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic ReportPage Title Page Title Strategic Report Our strategy The kitchen market     1         Reach more builders   Achieved through: Our long-term strategic objectives Supported by: Our medium-term strategic initiatives page 25 • Evolving our depot model • Improving our product range and supply management • Developing our digital platforms • Expanding our international operations Measured by: KPIs page 28 Product innovation The right amount of the best product,  Operational excellence   • Sales growth •  • Cash • Depot openings • Health & Safety • FSC® or PEFC  materials • Waste recycling   Our market UK Kitchens and joinery market is valued at £12bn 1  Structural drivers Recent trends •   2  •  Average age of UK housing stock is around  2  •     • Builders have remained optimistic in 2023 and  1  •  parents over last 10 years 2    • Consumers are more focused on design and  1  •     Our purpose To help our trade customers achieve exceptional results for their customers  2023 Market Value 1 Total UK kitchens & joinery market 1 Kitchens Joinery   £12bn Howdens UK  Competitors      Strategic Report Financial Statements Additional Information Governance 13 Howden Joinery Group Plc Annual Report & Accounts 2023 12 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic ReportPage Title Page Title Strategic Report  and environment • Employment opportunities and good neighbour in over  • Supporting local and  • Responsible ESG practices  • See our Sustainability report   • Long-term value creation, generating cash for further  business and to support a  • Surplus cash after investment and dividends is returned   Our resilient business model What we do The value we create • Our manufacturing and sourcing  attractive products that are trade  •      •  us to make in our UK factories   •  products from hundreds of trusted       • Our in-house distribution operation delivers from our factories and   •       • Our 2,100 specialist kitchen designers support the builder by visiting the end-user’s home, or  free virtual design service, and helping them choose, plan and   Homemakers  •  opportunities for training, development and  •  good salary, pension and    • Strong and enduring relationships  •  products and the scale necessary to support suppliers’ businesses   • Our business depends on entrepreneurial depot managers and  motivated and incentivised depot  •   for trade customers, and cheaper to   • Our in-stock model means that builders can get the products   •  excellent levels of service and trade      •      • Trusted personal relationships providing outstanding service, from kitchen design to delivery  •   their customer before they need to  and anytime ordering tools help the   Strategic Report Financial Statements Additional Information Governance 15 Howden Joinery Group Plc Annual Report & Accounts 2023 14 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic ReportPage Title Page Title Strategic Report Another year of strong progress  pleased to report the Company delivered another year of  outstanding product line up, industry-leading stock availability            entrepreneurial spirit and dedication to our customers make   Financial performance     vertically integrated approach and market leading distribution          Strong cash generation remains one of the great hallmarks      Strategic initiatives      investing commensurately in our consistent and proven   Our priorities are to invest in deeper vertical integration, depot       A milestone year for ESG The opportunity to have a positive impact on our environment,      right thing for our people, our customers, our suppliers, the          the targets underline our intent to go even further to reduce                            health in the construction industry, is particularly appropriate     Governance and Board changes As your Chair, one of my key responsibilities is to ensure   have continued to refresh the Board by rotation, ensuring  and experience in the team to complement the talents of our    maintain rigorous oversight of the strategic, operational and    nearly eight years of service, in particular as Senior        supplier of engineered components and access solutions to   Director, informed the Board of her intention to retire in          Vanda has over 20 years of senior management experience across a range of sectors, including manufacturing, industrial,  planning to recruit more non-executives over time to ensure     Another year of strong progress I am pleased to report the Company delivered another year of strong progress supporting our trade customers with an outstanding product line up, industry-leading stock availability and, as always,   Peter Ventress Chairman Financial Statements  Governance 17 Howden Joinery Group Plc Annual Report & Accounts 2023 16 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic Report Page TitleChairman’s statement Strategic Report  continued Capital allocation and returns  The Board recognises the importance of shareholder returns                    Looking ahead The Group has delivered another year of strong progress and     opportunities in our markets and our ability to generate       Peter Ventress Chairman 28 February 2024 Page See our Sustainability report 42 See my introduction to our Governance report 74 See our Board of Directors 76 Chief Executive  Our results demonstrate the strengths of our local, trade only, in-stock business model Andrew Livingston  Further reading In the UK we believe we gained market share by volume in 2023, which helped us mitigate a decline in the overall size of the  Q&A With Andrew Livingston,  The Group delivered a resilient performance in 2023, against record prior year comparatives and in, as we anticipated, a more challenging marketplace. Sales and  investment programme, which is focused on our key capabilities and gives us, end to end, a stronger business. All the questions in this section have been asked by institutional investors this year. Q Given the external challenges of   A             to provide competitive pricing across the board for our       our strategic plans for the UK business and sales at our        Financial Statements  Governance 19 Howden Joinery Group Plc Annual Report & Accounts 2023 18 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic ReportPage Title  Strategic Report  continued Q  this year in sustainability, where  A         External suppliers represent most of our total emissions and   be contractually obliged to have Net Zero targets in place  process, both for internally-generated products and those    also launched a plastic pledge initiative looking across all products to remove reduce or replace plastic packaging  Q How resilient is the business to  A Resilience is a key strength of our local, trade only in stock   The foundation for this is our strong product line-up, high stock availability, industry leading service levels and our          our next day ‘XDC’ delivery service to supplement in-depot  in places lacking suitable properties to accommodate the     from depot staff and customers alike and providing such an     are budgeted to pay back costs in less than four years and           Q Over the past couple of years there    A  competitively priced product for our customers to sell to   the latest trends that keep us front of mind for both builders       kitchens continued to contribute more to our kitchen mix     business continued to deliver volumes on our core products,      Q Are you running out of opportunities for  A               Q Turning to growth, how are the UK    A High service levels, including local proximity and immediate    in several forms, the format enables us to provide the best  and to make space utilisation and productivity gains in a    believe there is scope for around 1,000 depots in the UK and     reorganised our range architecture, removing duplications,      to order service is also informing our from stock ranging  available from stock comprised ranges brought to market    Price featured prominently in 2023, and given prevailing                 offering in the second half of 2023, has been very favourably  Strategic Report Financial Statements Additional Information Governance 21 Howden Joinery Group Plc Annual Report & Accounts 2023 20 Howden Joinery Group Plc Annual Report & Accounts 2023 21 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic ReportStrategic Report Page Title Strategic Report  continued Q Solid work surfaces was a new  developed in 2023 and how has this helped Howdens address the higher  A  strongly in 2023 and it’s been a priority for us to develop    ago and other investments, our in-house manufacturing          Q You are continuing to invest in  goal in terms of what products you  A                  second architrave and skirting line became operational this year, enabling us to service in-house more of the substantial     Q Being in stock is very important for    A  us that a high level of stock availability is one of the key    customer service levels and increase sales by optimising in-depot stock holdings of best-selling SKUs and associated  Sales of these are outperforming those of non-Daily Trader  including a reduction in customer back-orders and a higher proportion of stock being replenished via a depot’s core  utilisation of our XDC cross docking service introduced       to delivering the levels of high service and availability  replenishment enable depots to hold deeper stocks of faster selling lines, for example Daily Traders and makes it simpler  and availability, backed by certainty over lead time to delivery  Q What are the advantages of digital   A                            frequency and ease of trading and reduce time consuming   record and pick deliveries, check allocations, and determine     By mid-2024, the online account customers of all our depots  by-depot basis and make multiple purchases of products in  to place orders for collection at a time of their choosing, and    Q Can the Howdens model work in other  businesses in France and the Republic  A           sales in a market at least as challenging as the one in the     in France are less experienced in nurturing trusted trade    are investing in the business through enhanced offerings      the depot teams there supported by our UK infrastructure        23 Howden Joinery Group Plc Annual Report & Accounts 2023 22 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report  Financial Statements Governance Strategic Report Strategic ReportPage Title Page Title Evolve our depot model Improve our range and supply management Develop our digital capabilities and services Expand our international operations 1 2 3 4 Strategic Report  continued Q What are your expectations  A             have a programme of ‘Rooster Deals’ promotions in place to                              our strategic initiatives at  Results presentation on  We have made further progress on our medium-term strategic initiatives,   Our strategic initiatives 1 Evolve our depot model – we want to improve our depot network over time to ensure we use   High service levels, including local proximity and immediate          customers, a place for them to bring their customers to see        The updated depot format Updated front area creates the best environment for   25 Howden Joinery Group Plc Annual Report & Accounts 2023 24 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report  Financial Statements Governance Strategic Report Strategic ReportPage Title Page Title Strategic Report 2 Improving our range and supply management  improve service and to enhance productivity   As product lifecycles shorten, managing the number of    are offering the right number of range families, designed to       also innovating in other product categories to expand our   high level of stock availability is one of the key reasons they         XDC’s are a key enabler to delivering the levels of high  improvements to stock replenishment enable depots to hold deeper stocks of faster selling lines and makes it simpler and  availability, backed by certainty over lead time to delivery for           furniture, principally frontals and panels, but also skirting and       3 Digital – we are developing our digital platforms to raise brand awareness, support the business model and to deliver productivity gains and  Our digital strategy reinforces our model of strong local               surety this and other initiatives such as Daily Traders provide,         4 International – Expanding our presence in attractive kitchen and joinery markets outside     trade only local business models to other markets outside the               enhanced offerings of ‘footfall-promoting’ products and a     Our strategic initiatives continued  continued 27 Howden Joinery Group Plc Annual Report & Accounts 2023 26 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report  Financial Statements Governance Strategic Report Strategic ReportPage Title Page Title Strategic Report Key performance indicators Strategy Risk Remuneration Links to: Financial Non-Financial Sales Why we measure it    Links to strategy, risks and remuneration  Why we measure it   as it includes all of our operating, selling and distribution, admin  Links to strategy, risks and remuneration Depot openings Why we measure it    to take account of economic conditions and phase the speed of   Links to strategy, risks and remuneration Use of FSC® or PEFC  Why we measure it   ®     Links to strategy, risks and remuneration  Why we measure it     Links to strategy, risks and remuneration Health & Safety Why we measure it  our logistics operation, our support sites and our depots and  Links to strategy, risks and remuneration Progress  Progress  Progress    Progress    Progress     Depot staff bonuses are directly linked to their depot’s sales Reach more builders   bonuses are directly linked to PBT    Deterioration of model & culture £283m year end cash £119m capex £164m dividends & share buybacks   Return surplus cash to shareholders Invest in our strategic priorities  Cash Why we measure it     Links to strategy, risks and remuneration Progress     Deterioration of model & culture Reach more builders  Health & Safety Product innovation Product relevance Continuity of supply   All of chipboard & MDF used in our manufacturing processes is from FSC® or PEFC    2020 2020 20202021 2021 20212022 2022 20222023 2023 2023 £1.6bn £261m 41 £2.1bn £390m 40 £1.5bn £185m 19 £2.3bn £406m 55  £328m 42 Financial Statements  Governance 29 Howden Joinery Group Plc Annual Report & Accounts 2023 28 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic Report Page TitleKey performance indicators Strategic Report Financial results for 2023 1 Revenue             balancing pricing and volumes in an environment of high        of higher priced kitchens, make an attractive cash margin   delivered a number of productivity improvements in our           taken throughout the year more than offsetting cost increases  enabled us to protect our ongoing investments in our strategic      initiatives including the full year impact of our investment in      earnings per share         indicated, the Group expects an ongoing reduction of around       Cash                Revenue 1 £m 2023 No. of depots 2022       2, 4  777    63  3   840      Revenue €m  2      40                   2 Same depot basis for any year excludes depots opened in that year  Strategic Report Financial review • Maintained sector leading  environment • Continued investment in strategic initiatives • 21.0p 2023 full year dividend Paul Hayes  Tight cost control enables us to protect our investments in  Financial Statements  Governance 31 Howden Joinery Group Plc Annual Report & Accounts 2023 30 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic Report Page Title Strategic Report How we make cash and how we spend it Capital allocation and          is for the Group to be able to operate through the annual   year, particularly in advance of our peak trading period in the       capital requirements and ongoing investments in our strategic     Financial review continued        Pensions                 Technical guidance for 2024 Income statement • Continued operating expense investment to support our   •     •   • Patent box impact on the Group’s effective tax rate   •     •   •     Return surplus cash to shareholders: • After organic investment needs •  • Fund pension scheme •  Modest investment in adjacencies: •  • Land purchases for expansion Progressive ordinary dividend growth: •  Investing in organic growth: •  • Disciplined range management • Optimise manufacturing & logistics •     £m  0 Operating   Opening net cash Closing net cash  capital changes Lease Payments Capex Other       Cash generation and use Uses of cash -£107m -£46m -£17m -£64m -£119m -£50m -£114m +£488m +4m Tax paid Shares repurchased Dividends paid Pension contribution 2023 2022 DividendCapex Share buyback £156m £114m £250m £50m £114m £115m £283m £308m 2322 Financial Statements  Governance 33 Howden Joinery Group Plc Annual Report & Accounts 2023 32 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic ReportPage Title Page Title Strategic Report Interest rate risk   New accounting standards   Cautionary statement      uncertainties, actual results may differ materially from those     By order of the Board Paul Hayes  28 February 2024 Financial review continued  instruments, and exposure to              No speculative use of derivatives, currency or other    Foreign currency risk      The net adverse impact of exchange rates on currency    Counterparty risk Group Treasury policy on investment restricts counterparties     quality of counterparties, the limits placed on individual credit  Funding and liquidity   in terms of providing long-term returns to shareholders and safeguards the Group’s ability to continue as a going  capital structure by varying the amount of dividends paid to shareholders, the returns of capital to shareholders, the level  The Group has a committed, multi-currency, revolving credit      stress-tested for reasonably possible adverse variations in   foreseeable future as part of our going concern assessment,            sent in advance of each of their meetings and through  their duty as set out in section 172 of the Companies Act  other factors set out on page 82 and they also consider  our pensioners, regulators and the government, and the   they have had regard to stakeholders and the other factors       information  sections 414CA and 414CB of the Companies Act 2006 in    0    Average rate         1.27 1.14 1.21 1.23 1.24 1.17 22 2223 1.15 1.15 23 Financial Statements  Governance 35 Howden Joinery Group Plc Annual Report & Accounts 2023 34 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic ReportPage Title Page Title Strategic Report Risk management Low If the risk presents a hazard to our operations or strategy Higher If the risk presents us with a sale or service improvement opportunity Balanced For all other risks we carefully balance the risk and our mitigation efforts with the potential reward Our approach to risk    Risk appetite   Our approach to risk, and emerging risks Emerging risks         Short term     Medium term Risks that are tactically important to achievement of our  Long term Longer term trends that could impact on the development       •   •  Eastern Europe and China, and its potential impact on     The risk management process The main steps in the process are set out below: 4 Monitoring and reporting     The Board considers and agrees the key risks, appetites    3 Response Risks that require a response have additional mitigation strategies agreed and a future action   2 Assessment  that considers both the likelihood of occurrence and the  and an assessment of the level of exposure against our    Functional management and leaders formally identify      Key activities People responsible  Risk monitoring and reporting •    • Executive Committee and Board challenge and agree the Group’s key risks, appetites  • Key risks, assessments and responses are  Risk response •    Risk assessment •  scoring mechanism and are compared   •    •   Principal risks   consider could have a potentially material   Key risk report   scoring risks, emerging risk issues, the biggest    Risk register    information required to accurately capture the risk and is maintained on our risk management  for each risk register responsible for its  Board Executive Committee Audit Committee Risk team Functional leaders Operational management Risk team Risk governance Top-down Bottom-up Climate-related risk Climate-related risk is an emerging risk, but is not a principal   continued to develop our climate risk approach during 2023, and more detail on this can be found in our TCFD report at    stakeholders, including our insurers and suppliers,   Risk management   and tailored to meet our needs, so that it enables robust  Integration into our risk management framework    Financial Statements  Governance 37 Howden Joinery Group Plc Annual Report & Accounts 2023 36 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic Report Page TitleRisk management Strategic Report The arrows alongside each risk show the year on year change 2023 Principal risks  R O P F Risk and impact    depend on the demand for repair, maintenance, and improvement   Mitigating factors •   •   •  suppliers update us on their assessment of trading and market performance through   Risk appetite    R O P F  Risk and impact  key suppliers, manufacturing and distribution operations could affect our ability to service our customers’   Mitigating factors •   •   •   Risk appetite    R O P F Risk and impact Failure to recognise, innovate and exploit opportunities could impact on  model, risk appetite, structures, and   Mitigating factors •   •      Risk appetite    R O P F Risk and impact Our business could be adversely    Mitigating factors •   • The Executive Committee and senior leadership team assess succession plans for  • The Remuneration Committee and Board are regularly updated on key people activity   •   Risk appetite    R O P F Risk and impact  various activities that could cause harm to our staff, our customers, their customers and the communities  Mitigating factors •   •   •   Risk appetite   Principal risks and uncertainties Reach more builders Operational excellence Product innovation  Links to strategy Financial Statements  Governance 39 Howden Joinery Group Plc Annual Report & Accounts 2023 38 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic Report Page TitlePrincipal risks and uncertainties Strategic Report  R O P F Risk and impact     Mitigating factors • Our product team regularly refresh our offerings to meet builders’ and end-users’  •   •   Risk appetite    R O P F Risk and impact  operations and locations in    Mitigating factors •  •   •   •   Risk appetite    R O P F Risk and impact  could result in systems being unavailable, causing operational   Mitigating factors •    •   •   •   Risk appetite    R O P F Risk and impact   service the needs of the local small builder and their customers, and our  Mitigating factors • Our values, business model and culture are at the centre of our activities and decision-making processes, and they are led by the actions of the Board, Executive  • The Board and Executive Committee regularly visit our depots and factories,   •   Risk appetite   Principal risks and uncertainties continued The arrows alongside each risk show the year on year change 2023 Principal risks continued Reach more builders Operational excellence Product innovation  Links to strategy Financial Statements  Governance 41 Howden Joinery Group Plc Annual Report & Accounts 2023 40 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic ReportPage Title Page Title Strategic Report – Sustainability Matters Worthwhile for all concerned Sustainability matters Why Sustainability matters to us Our material sustainability issues Our TCFD reporting Our ESG strategy Renewable energy & sustainable operations Our SECR and Scope 3 reporting Net Zero Our impact on our stakeholders 44 48 60 45 50 67 46 58 44  45 Our ESG strategy 46 Our Net Zero commitment and targets 47  48 Our material sustainability issues 49  emissions together 50  51  52 Sustainable product offer and product innovation 54  56 Health & safety, carbon neutral,  58 Our impact on stakeholders 60  67 Our SECR and Scope 3 reporting Financial Statements  Governance 43 Howden Joinery Group Plc Annual Report & Accounts 2023 42 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic Report Page TitleSustainability matters Strategic Report – Sustainability Matters Why Sustainability matters to us Our ESG strategy Sustainability generates long-term value  preserves our culture, supports our business model, increases business resilience, mitigates our risks and addresses the  Sustainability is part of our culture   customers, our suppliers, the environment and the  Sustainability supports  Sustainable behaviour gives us a competitive advantage and    Being trusted partners to our suppliers and customers means      Sustainability mitigates our risks     this because it’s the right thing to do, but it also mitigates our  Developing and maintaining sustainable supplier relationships   considerations are built in as a pillar of the design process,  Our material sustainability areas     third party specialists, consulting both external and    pillars and foundation principles of our ESG strategy at page  Our sustainability KPIs, Our Net Zero SBTi targets, ESG and remuneration        Our PSP share plan includes ESG-related vesting targets   ESG strategic highlights of 2023 Road to Net Zero • Science-based targets submitted and approved  •   •  Climate resilience •  Materiality •  •  Charities and communities   The Board and Executive Committee lead our commitment to sustainability The importance of sustainable behaviour is recognised     Sustainability Committee met regularly throughout the year  Our vision Our strategy Our material SDGs Climate Resilience Strategic Objectives Net Zero  kitchen business A sustainable product offering, responsibly manufactured or sourced, that meets the needs of the builder and  A unique and sustainable culture    business that appeals to current and  Leader in risk and resilience governance An agile and resilient business, proactively managing ESG risks,   Strategic Pillars Foundations Governance EDI: Strategic priorities & wellbeing See pages 54 & 55 Effective reporting & disclosure  See page 57 Behavioural health & safety: Maintain & next steps See page 56 Emissions reductions: Carbon neutral See page 56 Sustainable product offer & innovation Renewable energy  operations Supply chain risk mapping & resilience Supply chain emissions Decarbonise  UN SDG description and relevant targets under each SDG ‘ Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all’  ‘ Take urgent action to combat climate change and its impacts’  ‘ Ensure sustainable consumption and production patterns’  ‘ Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests… and halt biodiversity loss’  See page 50 See page 49 See page 51 See page 52 See pages 49 & 66 Financial Statements  Governance 45 Howden Joinery Group Plc Annual Report & Accounts 2023 44 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic Report Page TitleOur ESG strategyWhy Sustainability matters to us % CO 2 Emission Reduction 10 11 16 15 13 14 12 9 7 5 8 6 4 1 2 3 Strategic Report – Sustainability Matters Our Net Zero commitment and targets Our emissions and how we plan to reduce them A – Distribution    Engaging logistics providers for solutions Scope 1 & 2 Scope 3 D – Supply chain    Capture emissions data Establish reduction plans   B – Renewable energy    Company car transition  Costs of change        “We are developing the options to meet our SBTi targets” Scope 3 – Purchased goods and services 40% Scope 3 – Use of sold products 34% Scope 3 – Other 14% Scope 3 – Investments (Pension scheme) 8% Scope 2 – Market based 1% Scope 1 4% TARGET: Net Zero by 2050 First steps to the target – against a 2021 baseline: • 42% reduction in Scope 1 and 2 emissions by 2030 • 25% reduction in Scope 3 emissions by 2030 • 90% reduction in all emissions by 2050 OUR JOURNEY TO ZERO WASTE ZERO EMISSIONS ROAD TO ZERO 57% Since 2012 we have reduced emissions by 1 Biomass boilers (in use since 1995) 2 FSC® & PEFC chain of custody introduced 3  4 Further investment in biomass for factory heating 5 Development and intro of 100% recycled and 100% recyclable cabinet legs 6  7 Introduction of renewable electricity in Supply 8 Carbon neutral status achieved at Howden and Runcorn manufacturing sites 9 Introduction of renewable electricity in depots 10 Committed to Science Based Targets initiative (SBTi) with Net Zero plan 11 Introduction of HVO alternative fuel 12 Introduction of EV trucks 13  fuels, materials and technologies 14 Approval for SBTi 15 Interim 2030 emission reduction targets (reduce by 50% vs 2021 baseline) 16 NET ZERO 2004 2008 20132012 2018 2021 2022 2023 2024 2030 2050 Total 2021 baseline emissions:  2 e  Financial Statements  Governance 47 Howden Joinery Group Plc Annual Report & Accounts 2023 46 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic ReportPage Title Page TitleOur emissions and how we plan to reduce themOur Net Zero commitment and targets Strategic Report – Sustainability Matters Our material sustainability issues Refreshing our ESG materiality assessment in 2023    Methodology and results of the materiality assessment and stakeholder engagement: 1. Desktop analysis  2. Stakeholder engagement  consolidation of issues Research into our initial internal    companies, sector guidance and      discuss the possible material issues     suppliers, depot managers, other employees, and members of the senior      existing ESG strategic pillars and  variations in some of the terminology    Stakeholder view  managers, employees, suppliers  Howdens View   Link to our ESG strategic pillars Link to our ESG foundation values  Correlation of material topics with our ESG strategy    Supplier engagement – addressing Scope 3 emissions together Why supplier engagement is important  relate to goods purchased from our suppliers and the use of    Engaging with our top suppliers in 2023       most critical to our business, they also covered a variety of  Engagement in action: supplier ESG summits     activities and to discuss solutions for future emissions   to the Tier 2 and further upstream suppliers and focus on   • Giving a strong demonstration of industry leadership  •   •    • Encouraging future investments in resource, technology     suppliers shared their ambitions and decarbonisation plans   Engagement in action: Net Zero commitments strengthen bonds with long-term supply partners     the data and turn it into meaningful sustainable actions          Engagement in action: ESG objectives included in standard supplier terms of business   to increase our understanding of the complexities around gathering and sharing good quality data, particularly around      Agenda for the future  •   •    •  encourage actions that support our Net Zero emissions  Supply chain risk mapping and resilience to climate change   that involves using a specialist climate diagnostic tool to  Physical climate-related risks are captured across multiple     Stakeholder view Howdens view Packaging Material and Waste Circularity Distribution Impact Sustainable Product and Brand Business Resilience and Compliance Climate Risk Manufacturing Impact Health and Safety Transparency and Disclosure Equality, Diversity and Inclusion Employee Development Board Accountability Employee Engagement Communities and Charity Employee Wellbeing Supply Chain and Materials Sourcing Carbon Footprint and GHG Emissions Higher importance for stakeholders Higher importance for HowdensModerate importance Forestry and Timber Supply Chain Waste Management Customer Relations Financial Statements  Governance 49 Howden Joinery Group Plc Annual Report & Accounts 2023 48 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic ReportPage Title Page TitleSupplier engagement – addressing Scope 3 emissions togetherOur material sustainability issues Strategic Report – Sustainability Matters Renewable energy & sustainable operations  Strategic importance and   a third of our Scope 1 baseline CO 2 emissions, so it’s a clear         Adopting new technologies       2        2    Sharing ideas and aims with     deliveries and is operated on our behalf by third party logistics          volume of product on each delivery and reduce the total       FSC ®      Emissions reduction developments in 2023 Waste heat recovery      600 TCO 2  Energy monitoring      ability to see the energy consumption at an individual process  reductions of over 300 TCO 2  Solar energy investment approved Solar panel investment has been approved in 2023 at our    2   emissions reduction is calculated to be 1,000 TCO 2    training and route planning               Metrics and targets      vesting at a total cumulative reduction from our 2021 baseline   Sustainable sourcing     All of our buyers and our compliance team have taken and     Recognising that our highest exposure to modern slavery is                                All of chipboard & MDF used in our manufacturing processes is from FSC® or PEFC         2021 baseline 2022 actual 2023 actual 2024  minimum  maximum Actuals CO 2  Target CO 2  Vesting target Financial Statements  Governance 51 Howden Joinery Group Plc Annual Report & Accounts 2023 50 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic ReportPage Title Page TitleDecarbonising the distribution fleetRenewable energy & sustainable operations 1 2 3 4 5 Strategic Report – Sustainability Matters Sustainable product offer           •  less CO 2  •                 end-users to accept our offer of sending an engineer to repair their appliance rather than replace  When the cabinet has come to the end of its life in the home it can be recycled and broken down to produce        factories, so this is a product where our choices can make a real   1 Cabinet guarantees and recycling 2 Recycled laminate worktops 3 New developments 4 Plastic pledge 5 Eco washing machines Financial Statements  Governance 53 Howden Joinery Group Plc Annual Report & Accounts 2023 52 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic ReportPage Title Page TitleSustainable product offer and product innovation Strategic Report – Sustainability Matters EDI & wellbeing Case study Women in Manufacturing and Engineering      During an event at the school, some of our female      At Howdens, we pride ourselves on being a place where every individual is actively encouraged to succeed,  business. This ethos is deeply rooted in our inclusive culture, which respects and values diverse backgrounds. Our Inclusion Strategy   Accessible for ALL    help career progression through apprentice programmes           apprenticeship levy to fund construction apprenticeships in small businesses across the UK, directly addressing a   2023 Update on Our EDI priorities Our Executive Committee sponsors continue to lead employee  Gender   The Gender group has also organised events and educational     Ethnicity  includes guidelines for considering the diversity of local communities in recruitment and learning resources on       Disability   Update on our wellbeing strategy    Financial Wellbeing     Mental wellbeing     Physical wellbeing         Thanks for a really great day! The students  a huge thank you to you and your teams for  Teacher at Longcroft School Rewarding careers, opportunities to develop and thrive  valued for who you are and where you can give the best of yourself, make meaningful  Andrew Livingston – CEO Support for ALL          Case study Counter Talk podcast Our Counter Talk podcast, featuring employees telling    open conversations about  the supportive culture   known I needed to keep it to myself, because  Howdens you know that if you open up there        Worthwhile for ALL          1 2 3 Worthwhile for ALL    Support for ALL    Accessible for ALL    Financial Statements  Governance 55 Howden Joinery Group Plc Annual Report & Accounts 2023 54 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic ReportPage Title Page TitleEDI & wellbeing  across all UK operations Strategic Report – Sustainability Matters Health & safety, carbon neutral,          safety management systems and actively encouraging the participation of all staff to help continuously improve Health           celebrating the positive impacts of employee participation  To maintain momentum on our safety culture improvement    engagement, of the human factors and cultural elements    and logistics operations.  this in 2020 through our approach of removing or minimising                    ISO 14001.     Sawdust-to-heat.                           Keeping our people safe and healthy Reducing waste Use of renewable energy sources changes to Route to Net Zero Standard  our total Scope 1 and 2 emissions, and is entirely under our                From 2023 the Carbon Trust is no longer offering Carbon   This standard aims to ensure transparency and clarity of   ambitious requirements and a focus on language to enhance      our commitment to climate leadership, moving on from the    to achieve our targets and adopting        HSE all-industry rate  100  0 200 300   2018 2020 2021 2022 2023 Financial Statements  Governance 57 Howden Joinery Group Plc Annual Report & Accounts 2023 56 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic ReportPage Title Page TitleHealth & safety, carbon neutral,  Strategic Report – Sustainability Matters 100% All of our chipboard is from sustainably managed UK forests Zero to  across our UK operations 10,000  to energy to heat our factories Environment £482m   £345m   445,000 small business customers supported by our trade account facility in our peak trading  The wider economy 492 apprentices in training 1 in 10 of our current employees started their  263 apprentices completed programmes in 2023 258   11% of our highest performing kitchen sales designers started their  Apprentices Over 12,000   Over 900  £656m  £269m cash contributed to our pension schemes  100%  10th  People Shareholders £114m dividends paid £50m share buybacks £1m three-year ‘Game Changer’ partnership   19th    Community & charity Strategic Report – Sustainability Matters Financial Statements  Governance 59 Howden Joinery Group Plc Annual Report & Accounts 2023 58 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Our impact on our stakeholders Strategic Report Strategic ReportPage Title Page TitleOur impact on stakeholders Strategic Report – Sustainability Matters Task Force on Climate-Related Financial Disclosures – building climate resilience Our approach to TCFD                 Compliance with the TCFD recommendations       TCFD recommended disclosure Our disclosure and developments in 2023 Focus areas for 2024 and beyond GOVERNANCE A Describe the Board’s oversight of climate- related risks and opportunities. • This process is led by the Board’s   • The Sustainability Committee met three times  the Sustainability Committee at each meeting and provided updates on the climate-related  • The Board considers climate risks together    •  proposition, the Board considers the likely  •   recommendations to the Board as  •   • The Board incorporated environmental  Remuneration Committee regularly monitor  Updated environmental measures are in  TCFD recommended disclosure Our disclosure and developments in 2023 Focus areas for 2024 and beyond GOVERNANCE B Describe management’s role in assessing and managing climate- related risks and opportunities. •  responsibility to execute Group strategy and to manage and mitigate climate risks and take   • The ExCo are responsible for delivering   • The Director of ESG advises both Board and ExCo on progress against targets and   •   •  the year to develop strategies to manage risks  • Our supplier engagement activities in 2023  leadership and provided clear messaging   • ExCo members have been assigned key responsibilities on managing climate risks  •   STRATEGY A Describe the climate- related risks and opportunities the organisation has  short, medium, and long term. •    •   •   additional information on ESG risks and  B Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy,  planning. •  over various timeframes in 2021, and     •  potential risks and opportunities into strategic  •   •   • Climate-related risk screening is being incorporated into the due diligence process  •  suppliers should give us additional data  that may inform our strategy and    Financial Statements  Governance 61 Howden Joinery Group Plc Annual Report & Accounts 2023 60 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic ReportPage Title Page TitleTCFD – building climate resilience Strategic Report – Sustainability Matters TCFD recommended disclosure Our disclosure and developments in 2023 Focus areas for 2024 and beyond STRATEGY C Describe the resilience of the organisation’s strategy, taking into consideration different climate – related scenarios, including a 2°C or lower scenario. •  scenarios in 2021, including a scenario     •   •   short or medium-term implications for our  •  •      RISK MANAGEMENT A Describe the organisation’s processes for identifying and assessing climate- related risks. •    and longer-term climate transitional and  •  Standards, based on risk impact and our  •   •  process for climate physical risks by using a modelling tool, covering all operations over a  •    •  process, incorporating more data streams  • Continue to assess key metrics and targets,  •     •   B Describe the organisation’s processes for managing climate- related risks. •    •  leads the relevant operational teams as they control day-to-day risk management and  • Challenge the business on the effectiveness and accuracy of mitigation plans, including  •   C Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation’s overall risk management. •   risk registers alongside our other operational,    •  •    •   • Continue to develop reporting to Exec  TCFD recommended disclosure Our disclosure and developments in 2023 Focus areas for 2024 and beyond METRICS AND TARGETS A Disclose the metrics used by the organisation to assess climate- related risks and opportunities  strategy and risk  •     •  ®    •       •     B Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions and the related risks. • See our emissions reporting, starting on page   •  as part of our overall climate risk reporting,  •  chain to gather additional data to inform our  C Describe the targets used by the organisation to manage climate- related risks and opportunities and performance  •   •   •     • Continue to monitor performance against targets including assessing the industry    TCFD – building climate resilience continued Financial Statements  Governance 63 Howden Joinery Group Plc Annual Report & Accounts 2023 62 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic ReportPage Title Page Title Strategic Report – Sustainability Matters Main risks and opportunities from our scenario modelling so far Details of the scenarios and time horizons                           of measures aimed at achieving the Paris Agreement  level of legislation and emphasis on mechanisms      social tipping points see a response to climate change       enforced, and may sometimes be overridden by political, commercial, or individual concerns in the short and medium term, requiring more severe policy action and  Overview of opportunities Most relevant time horizons Impact Mitigation actions OPPORTUNITY: Area of impact – Cost reduction Continuing to focus on energy  pushing through our targeted improvements and taking future steps on the path to decarbonisation could lead to   • Access to grants, subsidies and favourable tax treatment for adopting  • Absolute reductions in energy and  costs, particularly in times of rising energy prices, extended application of carbon pricing and an increase in the  Grants and subsidies: short to medium term  Absolute reductions in energy consumption: medium to long term  Deployment of Decarbonisation technologies such as hydrogen: medium to  Capitalise on energy opportunities: installation of solar   costs and lead to carbon  Own energy generation: by accessing grants and subsidies and deploying latest decarbonisation   help mitigate the impact of rising      OPPORTUNITY: Area of impact – Access to capital Building a climate resilient strategy and communicating it effectively to the market could increase the demand for our shares and could also give us access to  Short to medium term    Access to sustainable  Clearly communicating our sustainability and climate   OPPORTUNITY: Area of impact – Product design Taking the lead in producing sustainable products before our competitors could increase our    Support the future sustainability of our assets and the  Sustainable design is built in   RISK: Area of impact – Sourcing Future physical or legal barriers arising from climate change could bring challenges to sourcing some of our    •  • Pressure on supply chains to decarbonise, especially in  •  could increase in cost or become unavailable in the future, so  Carbon pricing: medium to long term  Pressure on supply chains to decarbonise: medium   Raw materials cost increase/ unavailability: medium   Carbon pricing:   2 e  Pressure on supply chains to decarbonise: as climate change is a global issue, our    Raw materials cost increase/ unavailability: there may be adverse    Our commitment to SBTi Net Zero  the impact of future carbon prices due to absolute reductions in our     increased understanding of potential supply chain impacts  suppliers to mitigate the potential  For instance, the supply chain data should give us a more   formulate mitigation strategies  TCFD – building climate resilience continued Results and next steps          Overview of opportunities Most relevant time horizons Impact Mitigation actions OPPORTUNITY: Area of impact – Brand Delivering on our aim to be the UK’s leading responsible kitchen business and creating a brand that is recognised as a leader in managing climate-related risk could result in increased sales, greater  share and increased attractiveness to     Greater brand   Stronger employee   sustainability and Net Zero ambitions to employees,  Sustainable customer offering and bringing the suppliers on the Net Zero and sustainability  Financial Statements  Governance 65 Howden Joinery Group Plc Annual Report & Accounts 2023 64 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic ReportPage Title Page Title Strategic Report – Sustainability Matters Overview of opportunities Most relevant time horizons Impact Mitigation actions RISK: Area of impact – Operations The physical risk to our operations from climate change can include   additional capital expenditure or could  The physical risk assessment:  potential risks in the short, medium and    the short or medium-   for more granular    Interruption to operations: physical impacts of climate change could cause  physical route   potential value at risk  Phase 2 of our physical   high level of expertise in supply chain planning and successfully planned for and dealt   Additional capital physical climate risks may require    To further understand the risks at    in the UK and our suppliers’     levels, heat stress and drought in certain regions and locations,    resilience option assessment  our Value at Risk for physical exposure and to understand our  RISK: Area of impact – Decarbonisation Decarbonisation of our distribution and could require transitional   Adjustments to current working practices: short to medium term  Transitional investment: medium to  Additional capital  to        incremental costs of meeting  three years, and neither the     Failure to meet customer demands for sustainable products could reduce  Failure to meet demands: medium to  Impact on future sales: from inability to meet  Our ESG strategic ambition is to be the UK’s leading responsible  commitment drives us to maintain a focus on sustainable product  TCFD – building climate resilience continued Our SECR and Scope 3 reporting  Emissions reporting methodology              Total CO 2  2023 2022   13,032   28,302  1,380   408  Scope 1 – Direct: Total     12,067 TOTAL Scope 1 and 2 absolute emissions – location-based    1,266  TOTAL Scope 1 and 2 – market-based   Turnover (£m)   Carbon intensity ratio (tCO 2 e per £m) gross, location-based    2 e per £m) gross, location-based    2     2       Proportion of CO 2        Restated data for 2022 2   2   SECR – Emissions reporting Financial Statements  Governance 67 Howden Joinery Group Plc Annual Report & Accounts 2023 66 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic ReportPage Title Page TitleOur SECR and Scope 3 reporting Strategic Report – Sustainability Matters SECR Reporting Category TCO 2 e % 1 Purchased goods and services   2 Capital goods 48,684  3 Fuel and energy related activities   4 Upstream transportation & distribution 43,166      6 Business travel   7 Employee commuting   8 Upstream leased assets       10 Processing of sold products   11 Use of sold products   12 End-of-life treatment   13    14 Franchises       Total     in our manufacturing and transport operations, our most  Use of renewable energy sources  Our 2023 Scope 3 emissions      Not applicable   Not applicable Source of data Status of data Key to Scope 3 data 1 2 3 4 7 9 11 12         sources on CO 2   Going concern and Viability statements The Directors have adopted the going concern basis in     Going concern review period     Assessment of principal risks The Directors have reached their conclusion on going concern after assessing the Group’s principal risks, as set out in detail in the ‘Principal risks and uncertainties’ section, starting on    directly affect going concern are the risks relating to continuity of supply, changes in market conditions, and   against supply chain disruption, and the Directors consider    Review of trading results,      2023, noting that the Group is debt-free, has cash and cash    Going concern  A ‘base case’ scenario. Group forecast, prepared in December 2023 and including              A ‘severe but plausible’ downside scenario based     This scenario models a reduction in most of the variable      manufacturing sites, investment in digital and expanding      economic conditions that the Company and its customers     A ‘reverse stress-test’ scenario. This scenario starts      Capital expenditure in this scenario has been reduced to  in proportion to the reduction in turnover on the same   Strategic Report Our SECR and Scope 3 reporting continued Relative importance of Scope 3 categories        2022 2023 2020 2021  2   2   2   2  Financial Statements  Governance 69 Howden Joinery Group Plc Annual Report & Accounts 2023 68 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic ReportPage Title Page TitleGoing concern and Viability statements Strategic Report Borrowing facility and covenants         therefore included the credit available under the facility  Results of scenario testing        The likelihood of this level of fall in sales is considered to  Conclusion on going concern Taking all the factors above into account, the Directors believe  other business risks satisfactorily and have a reasonable     Assessment of long-term prospects The Directors have assessed the Group’s long-term   Current position •  • Cash and cash equivalents balance at 30 December 2023  •    •   •  •   • Robust disaster recovery and business continuity  Strategy and business model •  • Demonstrated agility and resilience of the business  •  Robust assessment of principal risks •    •  robust assessment of the Group’s principal risks over the viability period on the basis already described in the going  Going concern and Viability statements continued Assessment of viability Time period and scenario modelling        facility covenants and the facility remains available under  the credit available under the facility in our assessment   The base case scenario takes the base case described in the discussion of going concern above and extends it       The severe but plausible downturn scenario takes the same decline over the going concern period as described in the discussion of going concern above, and then assumes a phased recovery over the rest of the three-year      The reverse stress-test scenario assumes a phased     no longer have headroom at any point in the viability    The Directors consider that the reasonably foreseeable  Group’s principal risks are unlikely to be greater than those   Results of scenario testing          Conclusion on viability Having considered the Group’s current position, strategy, business model and principal risks in their evaluation of the  of the scenario modelling, the Directors concluded that they  to operate and to meet its liabilities in full and as they fall due  Long-term prospects and viability Long-term prospects and viability continued Page Principal risks and mitigations 38–41 Trading results 16–35, and the Financial Statements Balance sheet 163  187  conclusions on going concern and viability 148–161 Further reading relevant to going concern and viability Going concern continued Financial Statements  Governance 71 Howden Joinery Group Plc Annual Report & Accounts 2023 70 Howden Joinery Group Plc Annual Report & Accounts 2023 Strategic Report Strategic Report Strategic ReportPage Title Page Title How we preserve value Governance Nominations Committee report Board of Directors Remuneration Committee report Sustainability Committee report 74 9876 108 140 Audit Committee report 132 Corporate governance report 74 Corporate governance report 76 Board of Directors 78 Key Board activity 80 Executive Committee and Company Secretary 82 Directors' duties (Section 172(1) statement) 84 Stakeholder engagement 92 2018 UK Corporate Governance Code: application and compliance 98 Nominations Committee report 108 Remuneration Committee report 132 Audit Committee report 140 Sustainability Committee report 143 Directors’ report 144 Directors’ statements 145  73 Howden Joinery Group Plc Annual Report & Accounts 2023 72 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report GovernanceGovernance GovernancePage Title Page Title Governance Introduction from the Chairman Howdens is a resilient and well-run business. In my Chairman’s statement at the beginning of this Annual Report and Accounts (pages 16 to 18), I spoke of the many challenges facing our business and the corresponding effect of these challenges on our end markets. During such periods, it is vital that boards provide clear and consistent leadership, underpinned by robust corporate governance practices. The work of this Board and its Committees are set out on the following pages and I hope that is showcases our governance achievements and priorities for the year ahead. I was pleased when Howdens rejoined the FTSE 100 in  Board we recognise the additional scrutiny from a corporate governance perspective that this will bring but we are prepared to live into the high standards expected of us. We will also take time to consider the revisions to the UK Corporate Governance Code and what that will mean for us as a Board going forward. Fundamentally, we remain committed to the high governance standards which we have set ourselves and supporting the fundamental principle that Howdens should be worthwhile for all concerned. Board succession During the 2023 we announced the retirement of three of our experienced Non-Executive Board members: Geoff Drabble, Debbie White and Karen Caddick as part of our wider succession plans to refresh the Non-Executive Board. Whilst these Directors all contributed hugely to the success of Howdens during their respective tenures, we have already appointed two highly experienced Non-Executive Directors in Louis Eperjesi and Vanda Murray who bring a vast amount of experience to the board table as well as a fresh perspective. More information on Louis and Vanda’s appointments can be found in the Nominations Committee Report beginning on page 98. We will continue to work with the Nominations Committee during 2024 to further refresh the Board, mindful of   Strategy The Board discussed strategy and its strategic initiatives throughout the year. We continued to invest in deeper vertical integration, the depot expansion and refurbishment programme, product innovation and digital expansion, as well as supporting continued investment into the international businesses. ESG and the work of the Sustainability Committee were also a key feature of the work of the Board during the year. We continued to build out the remit of the Sustainability Committee and were pleased to receive approval from the Science Based Targets Initiative (SBTi) of our Net Zero targets. Our environmental commitments are as important strategically to the Board as our other strategic initiatives and we will continue to monitor our performance and hold management to account on delivery of these targets. Roles Further information about the role of the Board, the Executive and Non-Executive Directors, external advisors and individuals may be found on our website: www.howdenjoinerygroupplc. com/governance/division-of- responsibilities Andrew Livingston  Paul Hayes  Peter Ventress Chairman Louise Fowler Non-Executive Director Louis Eperjesi Non-Executive Director Vanda Murray Non-Executive Director Andrew Cripps Senior Independent Director Karen Caddick Non-Executive Director Forbes McNaughton Board meeting attendance Peter Ventress (7/7) Karen Caddick (6/7) 1 Andrew Cripps (7/7) Geoff Drabble (3/4) 2 Louis Eperjesi (3/3) Louise Fowler (7/7) Paul Hayes (7/7) Andrew Livingston (7/7) Debbie White (7/7) Board of Directors Executive Directors Company Secretary Executive Committee Board and Executive Committee structure Corporate governance report Stakeholders This report details how we have engaged with our stakeholders and how, as a Board, we balance their respective needs. Throughout 2023, we were in regular dialogue with the Pension  the shock volatility in the gilts market in the autumn of 2022, we engaged with the Trustees on their updated investment   plan and in November the Board and the Trustees completed  recovery plan for the next three years. The Board is looking forward to further engagement with the Trustees, and all our other stakeholders, in the year ahead. Guy Eccles Group HR Director Julian Lee Operations Director David Sturdee  Theresa Keating Group Finance Director Stuart Livingstone Trade Director Richard Sutcliffe Supply Chain Director Andy Witts Chair of International The Board in 2024 I am pleased with how the Board’s agenda has developed during 2023 and the introduction of ‘spotlight sessions’ was widely welcomed in the Board evaluation feedback. We have a full programme of spotlight sessions in 2024 (details of which can be found on pages 78 and 79) which builds on the updates presented in 2023. The Board will also work with the Remuneration Committee on updating the Directors Remuneration Policy and I look forward to working with our new Remuneration Committee Chair, Vanda Murray, in engaging with shareholders on the draft policy in the second half of the year. I also look forward to engaging with our shareholders at the AGM in May. Peter Ventress Chairman 2024 Annual General Meeting (AGM) Details of the 2024 AGM may be found in the 'Additional information' section on page 214.  Disclosures may be found in the ‘Additional information’ section on pages 214 and 215. Using the corporate governance report   Board activity during the year. Part 2: Directors' duties and section 172 disclosure. Part 3: Stakeholder engagement. Part 4: UK Corporate Governance Code compliance. 1 Karen was unable to attend the November Committee meeting due  2 Geoff retired from the Board following the AGM in May. The Board meeting was held immediately before the AGM and therefore he did not attend. 75 Howden Joinery Group Plc Annual Report & Accounts 2023 74 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Corporate governance reportGovernance Governance Page Title Governance Andrew was appointed to the  on 2 April 2018. Peter was appointed to the Board as an independent Non- Executive Director in July 2022 and became Chairman and Chairman of the Nominations and Sustainability Committees in September 2022. Karen was appointed to the Board in September 2018 and became Chair of the Remuneration Committee in September 2019. Louis was appointed Non- Executive Director in June 2023. Andrew has a strong track record of performance, execution and driving change through improving digital capability, ranges and new site openings. He also has knowledge of key European geographies, is a competent French speaker, and has an entrepreneurial mindset. This  culture which has served the Company well and is fundamental to its success. He was previously the  MBA from the London Business School. As former Chairman of Galliford Try Plc and current Chairman of Bunzl Plc, Peter has in-depth knowledge of UK listed companies and the associated high corporate governance standards required by such companies. He was also formerly Chief Executive  and has held several senior executive roles including International President of Staples Inc and Chief Executive  NV, meaning he has extensive experience in international distribution businesses and brings a wealth of relevant  level management experience to the Board. Karen’s professional experience provides her with a strong diversity of perspective and  leadership of the Howdens business. Having served as the Group Human Resources Director of large listed organisations such as Saga Plc and RSA Insurance Group Plc (now RSA Insurance Group Limited), Karen has particular strengths in organisational development, delivery of diversity programmes, and executive remuneration. These attributes have stood Karen in good stead for her role as Chair of the Remuneration Committee and has made her a valuable addition to the Nominations Committee. Louis has a strong background of manufacturing and supply of building products in international markets, together with commercial, strategy development, and change management experience. He is currently a non-executive director of Ibstock Plc, Trifast Plc, and AIM-listed Accsys Technologies Plc. Louis has had a long career in the building materials sector, most recently serving as CEO of Tyman Plc, a leading international supplier of engineered components and access solutions to the construction industry. He has also held senior executive roles in Kingspan Plc, Baxi Group Ltd, Lafarge SA and Caradon Plc. Paul was appointed to the  on 27 December 2020. Andrew was appointed to the Board in December 2015 and became Chair of the Audit Committee in May 2016 and Senior Independent Director in July 2023. Vanda was appointed to the Board in February 2024.  executive and has a proven track record in consumer and manufacturing businesses. From 2017 until its acquisition by Recipharm AB in February 2020, Paul was CFO of Consort Medical Plc, a leading drug and device manufacturing business. Before this, he was the Group Finance Director of Vitec Group Plc from 2011 to 2017. Paul has extensive experience in senior  UK and US listed companies including Signet Jewelers, RHM Plc and Smiths Group Plc. He is a Chartered Accountant having   in Mechanical Engineering, Manufacture & Management. Andrew brings extensive experience as a non-executive director and audit committee chair with particular knowledge of branded consumer and business-to-business products, manufacturing and distribution in the UK and continental Europe. His experience of multisite wholesale distribution to small business customers at Booker Group Plc is valuable to the Board’s decision-making process. He is a Chartered Accountant and former Finance Director with extensive  experience. Vanda has over 20 years of senior management experience across a range of sectors, including manufacturing, industrial, and support services in Europe, the USA, and Asia. She has previously  of Blick Plc, and UK Managing Director of Ultrafame Plc, and she is currently the Chair of Marshalls Plc and is the Senior Independent Director and Chair of the Remuneration Committee at Bunzl Plc. Vanda’s extensive experience in both executive  Howdens from both a leadership and a strategy perspective, and her tenure as a remuneration committee chair means she will be able to transition easily into the Howdens Remuneration Committee Chair role when Karen Caddick retires from the Board in May 2024. Corporate governance report continued Board of Directors Non-Executive Directors Independence The Board considered that all of the Non-Executive Directors were independent for the full duration of the period being reported on and that Peter Ventress was independent upon his appointment as Chairman. Key to Board Committee membership Andrew Livingston  Peter Ventress Non-Executive Chairman Karen Caddick Independent Non-Executive Director Louis Eperjesi Independent Non-Executive Director Paul Hayes  Andrew Cripps Senior Independent Director Vanda Murray OBE Independent Non-Executive Director Non-Executive Director of LondonMetric Property Plc Chairman of Bunzl Plc None Non-Executive Director of Ibstock Plc, Trifast Plc, and Accsys Technologies Plc Non-Executive Chair of Marshalls Plc and Non- Executive Director of Bunzl Plc None None Contribution to the long-term sustainable success of the Company Contribution to the long-term sustainable success of the Company Other listed company appointments Other listed company appointments Neither Executive Director is a member of any Board Committee. Committee Membership Committee Membership Appointed Appointed Executive Directors Audit Committee A Nominations Committee N Remuneration Committee R Sustainability Committee S Chair of Committee S A AAAN R RRR N NNNS S S Louise was appointed to the Board in November 2019. Louise has over 25 years’ customer, brand and digital experience at a senior level. Her experience encompasses publicly listed and private businesses, the mutual sector  Louise’s strong background in consumer experience and reputation is valuable to the Company as it strives to provide a strong aftersales service to further support the builder customer. Her digital experience also provides valuable insight given the investment the Company continues to make in its digital programme. Louise is an Honorary Professor in Marketing at Lancaster University Management School. Louise Fowler Independent Non-Executive Director Non-Executive Director of Assura Plc A RN SSS 77 Howden Joinery Group Plc Annual Report & Accounts 2023 76 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Board of DirectorsGovernance Governance Page Title Governance Corporate governance report continued Key Board activity January • Health and safety update • CEO and CFO updates • Investor relations update • 2023 Budget review • Principal Risks review 2 • Whistleblowing update January • Health and safety update • CEO and CFO updates • 2024 Budget review • Investor relations update • Principal Risks review 2 • Whistleblowing report Spotlight: Digital Strategy Spotlight: Trade Service and Convenience Spotlight: Product Leadership: Sourcing Spotlight: Product Leadership: Vertical Integration Spotlight: Product leadership Spotlight: Trade Convenience Spotlight: Trade Service and Convenience April • Health and safety update • Board evaluation feedback • CEO and CFO updates • Pensions update • Investor relations update • Broker update May • Approval of Louis Eperjesi’s appointment April • Health and safety update • Pensions update • CEO and CFO update • Investor relations update • Broker update • Group policies • Strategic planning (separate session) July • Health and safety update • CEO and CFO update • Investor relations update • Draft 2024 Interim results and announcement, including consideration  • Broker update • Key risks review • Whistleblowing report • Employee engagement update May – AGM • All resolutions were passed with the requisite majority. Further details about the meeting may be found on page 90. May – AGM • Further details can be found on page 214 July • Health and safety update • CEO and CFO updates • Investor relations update • Draft 2023 Interim results and announcement, including consideration  • Key and principal risks review 2 • Broker update • Whistleblowing update February • Health and safety update • CEO and CFO updates • Investor relations update • Draft 2022 preliminary results, draft 2022 Annual Report and Accounts and 2023 AGM documents • Shareholder and capital returns • Board evaluation review • NED fees review • Group policies • Principal advisors February • CEO and CFO updates • Investor relations update • Draft 2023 preliminary results, draft 2023 Annual Report and Accounts and 2024 AGM documents • Shareholder and capital returns • Board evaluation review • NED fees review • Principal advisors September • Health and safety update • CEO and CFO updates • Manufacturing and logistics capex approval • Investor relations update • Director training session (provided by the Group’s corporate lawyer) November • Health and safety update • CEO and CFO updates • Pensions update 1 • Investor relations update • Schedule of Matters Reserved for the Board and Board Committee Terms of Reference • 2024 Board calendar approval • Approval of Vanda Murray's appointment Set out below and on the facing page are highlights of the matters the Board considered in 2023 and will consider in 2024. Not all of the matters the Board considered or will consider are listed, therefore this should not be considered  In addition to the matters shown on the 2023 timeline, at each meeting the Board received strategic, operational and  considered aspects of Group culture and strategy at various points during the year. 2023 2024 Governance and risk The Board received governance, legal, and regulatory updates   Risk remains a matter reserved for the Board and a detailed review of our risk management processes and principal risks can be found on pages 36 to 41 and on page 96. We have reviewed our risk management processes and remain  The annual review of the risk and control framework was presented to the Audit Committee in September 2023 Reporting from our whistleblowing helpline is also considered  Shareholder engagement Information about how we engage with shareholders can   Executive Committee presenters: Executive Committee presenters: Executive Committee presenters: JL RS DS DS DS JL RS 1 The Company’s actuaries reported to the Board on routine funding and investment matters and the Chair of the Pension Trustees attended to provide an overview of the Trustees’ funding and investment strategy and to seek approval from the Board of its long-term strategy proposal. 2 The review includes an assessment of mitigation of the key and principal risks of the Group as appropriate and the Board provides challenge on these to the Executive Directors. The outcomes are fed back to the Executive Committee for implementation. During 2023, the Board also considered areas of emerging risk, such as AI governance, and provided challenge to the Executive Directors on the inclusion of these areas. Executive Committee presenters Julian Lee (Operations Director) Richard Sutcliffe (Supply Chain Director) David Sturdee  Spotlight: International development Spotlight: Entrepreneurial Culture September • Health and safety update • CEO and CFO update • Employee engagement • Investor relations update November • Health and safety update • CEO and CFO update • Pensions update • Related parties and  register • Board Committees’ Terms of Reference and the Schedule of Matters Reserved for the Board • 2025 Board calendar • Employee engagement update Spotlight: Trusted trade relationships Executive Committee presenters: DS Spotlight sessions   • Trade service & convenience • Product leadership • Trade value • Entrepreneurial culture • Trusted trade relationships 79 Howden Joinery Group Plc Annual Report & Accounts 2023 78 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Key Board activityGovernance Governance Page Title Governance Corporate governance report continued Executive Committee and Company Secretary Executive Committee members  may be found on page 76. Theresa joined Howdens in September 2000 and   February 2012. Stuart joined Howdens in April 2023 and was appointed to the Executive Committee in September 2023. Andy joined Howdens in July 1995 and has been a member of the Executive Committee since September 2008. Theresa was appointed Group Finance Director in May 2014, having been Group Financial Controller since 2007. She joined the Group Finance team in 2000 having previously held  roles at Waterstones, HMV and Heals. Theresa is also a trustee of E-Act, a multi-academy trust. Theresa's role as Group Finance Director includes leading the key controls project, which is improving the business's capability to identify  controls which mitigate our key and principal risks. Prior to joining Howdens, Stuart was Operations Director at Pets at Home and before this he was  six years. He has also held senior positions at American Golf, Kwik Fit, and Whitbread. Stuart has overall responsibility for the performance and culture of the depots in the UK. He oversees the evolution of our depot estate, including our strategically important depot reformatting and the opening  Andy was one of the founding members of the Howdens depot management team, having joined from Magnet in 1995. Andy was promoted to Sales Director in January 2007 and was appointed Chief Operating  In November 2023, following a handover period with Stuart Livingstone (Trade Director), Andy became Chair of Howdens’  Andy’s main function as Chair of the international businesses is to provide executive oversight of and counsel to the maturing French, Belgian and Irish businesses. He also supports the Chief Executive  opportunities and other  Julian joined Howdens in 2003 and was appointed to the Executive Committee in  Richard joined Howdens in January 2019 and was appointed to the Executive Committee in July 2020. David joined Howdens in March 2022 and was appointed to   Forbes joined Howdens in July 2012 and was appointed Group Company Secretary in May 2014. Prior to joining Howdens, Julian worked in a number of strategic and operational roles within the Silentnight Group. He joined Howdens in 2003 as a leader of the Manufacturing Division and from 2005 to 2009 was head of international sourcing and supply chain in Asia. Since 2009, Julian has made a major contribution to the transformation of our supply chain and operations and in 2020, he was appointed Operations Director, encompassing both manufacturing and logistics. Julian leads our strategic manufacturing investments, including increased in-house manufacturing capability  Prior to joining Howdens, Richard was Director of Supply  he held senior supply chain  Hobbycraft, Wyevale Garden Centres and B&Q. Richard's role as Supply Chain Director encompasses optimising stock holdings across the business and ensuring Howdens maintains market leading stock availability. He lead the highly successful XDC project, which is delivering superior service levels and availability to depots. Richard is also acting Commercial Director. This role includes range management, a key strategic initiative. Balancing choice and new product with disciplined range management is crucial   Prior to joining Howdens, David   Brands, responsible for Pizza Hut Europe across 25 countries and over 1,500 outlets. He was with  roles in the Middle East & North  David is responsible for developing a longer-term customer strategy at Howdens to support our depot teams in managing their relationships with customers and to deliver our ambitious growth plans. David’s role also encompasses leading our IT, Digital, and Marketing teams to continually develop  Howdens brand. Forbes joined the Company as Deputy Company Secretary in 2012 following a period of secondment from KPMG. He is a fellow of the Chartered Governance Institute (CGI) and is Secretary to the Executive Committee as well as to the Board of Directors. Forbes is the link between the Executive Committee and the Board and is responsible for managing a number of external stakeholder relationships such as with the Pensions Trustees and external regulators. He is the head of the legal function in addition to his corporate governance responsibilities. Company Secretary Theresa Keating Group Finance Director Stuart Livingstone Trade Director Andy Witts Chair of International Julian Lee Operations Director Richard Sutcliffe Supply Chain Director and acting Commercial Director David Sturdee  Forbes McNaughton Company Secretary Executive Directors Appointed Contribution to the long-term sustainable success of the Company Andrew Livingston  Paul Hayes  Guy joined Howdens in April 2020 and was appointed Group HR Director and a member of the Executive Committee in February 2024. Guy joined Howdens as Interim Group HR Director in 2020. Previously he had been running his own consultancy providing HR support to numerous privately-owned and publicly- owned companies across a range of sectors including retail, healthcare and hospitality. Prior to that he was HR Director of  Guy has overall responsibility for all HR matters. Guy Eccles Group HR Director 81 Howden Joinery Group Plc Annual Report & Accounts 2023 80 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Executive Committee and Company SecretaryGovernance Governance Page Title Governance Directors' duties Corporate governance report continued Howdens was founded on the principle that the business should be worthwhile for all concerned. It's a principle that on the business continues to live into today. But balancing the needs and views of all of our stakeholders can be challenging as there are often  foremost considers our purpose, our culture, our mission and our strategy to ensure all decisions have a clear and consistent rationale. For details on the matters which the Board discussed and debated during 2023, please see pages 78 and 79. The Board regularly considers feedback from the Company’s stakeholders. These are set out in detail on pages 84 to 91. This engagement is effective and in keeping with the Company’s culture. For example, much of the feedback is through face-to-face conversations rather than being written but where there is need for  provided. Stakeholder feedback can directly affect the Board’s decision making, such as feedback received from investors in relation to the operation of the Directors’ Remuneration Policy for 2023 and direct employee feedback at Regional Board meetings, but it also provides the context for decision making, particularly where there are competing stakeholder interests. As Directors, when we discharge our duty as set out in section 172 of the Companies Act 2006 (‘Section 172’), we have regard to the other factors set out on the previous page. In addition to these factors, we also consider the interests and views of other stakeholders, including our pensioners, regulators and the Government, and the customers of our trade customers. We have set out some examples below of how the Directors have had regard to the matters in section 172(1)(a)–(f) when discharging their Section 172 duty and the effect on certain decisions taken by them in 2023. Shareholder returns  2022 of 15.9p per ordinary share and, in July 2023, it further recommended an interim dividend of 4.8p per ordinary share. In line with its capital allocations policy (more detail about which can be found on page 32), in February 2023, the Board also approved a £50m share buyback programme. In making its capital returns decisions, the Board considered its long-term strategy of continuing to invest in depots, manufacturing and logistics capabilities, and related strategic investments whilst delivering a progressive dividend. The Board takes regular feedback from its shareholders on the most appropriate method of returning capital, including at the AGM where all shareholders, regardless of the size of their shareholding, are invited to attend and ask questions of the Board. Our CEO and CFO also discuss this during investor roadshows following results announcements. Howdens has a prudent risk appetite towards balance sheet management, an approach which has provided a source of great strength in challenging recent years. As markets recovered from the shock of COVID-19, the Company prudently reinstated its capital priorities, including the return to paying dividends in 2021, and the return of surplus capital in the second half of the year. These returns were only initiated after having repaid all government support received early in the pandemic.  and triennial valuation The Board meets with the independent Chair of the Pension Trustees at least annually and is mindful of its obligations to all employees and former employees in all its pension arrangements.  and resilience of the Company) is the Board’s primary objective  scheme. However, the Board is also committed to supporting the funding position of the scheme in proportion to its responsibilities to all of its stakeholders. Following the expiry at the end of June 2023 of the previous   payments of £1m per month until the conclusion of the triennial actuarial valuation which was ongoing at the time. The triennial valuation (as at 31 March 2023) was completed in November 2023.  repair contributions at the rate of £12m per year and renewed the 'switch off' mechanism if full funding on the Technical Provisions basis was met. Full funding on this level was achieved at the date  were suspended. At the end of January 2024, the scheme was in a  suspended at that time. The Company and Trustee Board continue to work together on the long-term investment strategy for the scheme with the aim to reduce reliance on the Company and the CFO reports to the Board on these matters as appropriate. Investment in strategic initiatives The Board believes that it is in the best interests of all stakeholders to invest in long-term, sustainable initiatives for the business. This includes continued investment in the depot network (both new depots and reformats), in digital infrastructure, and the international business. It also includes investment in our manufacturing and logistics capabilities. In September 2023, the Board approved investment in panel   success of our in-stock offer and the Board keep under review the mix of product bought-in versus that manufactured in-house,  In considering its approval of the investment, the Board considered the payback on investment and that the investment supported the Group’s strategic plans to support core manufacturing processes, which in turn represented good value for shareholders. Furthermore, it was noted that, with ever-improving machinery safety requirements, the new machinery would possess enhanced safety features which were in the interests of the workforce working on the lines, and that, whilst the panel machining investment would lead to fewer panels being bought in from external suppliers, because demand was expected to grow, the reduction in bought-in panels would occur over the long-term allowing suppliers time to adjust their plans. Section 172(1) statement A director of a company is required to act in a way they consider, in good faith, would most likely promote the  amongst other matters, to the following: ...Customers Reputation The desirability of the company for maintaining a reputation for high standards of business conduct. Long-term thinking The likely consequences of any decision in the long term. Workforce The interests of the company’s employees. Suppliers The need to foster the company’s business relationships with (amongst others) suppliers and… Investors The need for every member to be treated fairly and for no member to be favoured over another member. Environment and community The impact of the company’s operations on the community and the environment. 83 Howden Joinery Group Plc Annual Report & Accounts 2023 82 Howden Joinery Group Plc Annual Report & Accounts 2023 GovernanceAdditional Information Financial Statements Strategic Report Directors' duties (Section 172(1) statement)Governance Governance Page Title Governance Corporate governance report continued Stakeholder engagement Howdens' stakeholders C o m m u n i t i e s P e n s i o n e r s W o r k f o r c e S u p p l i e r s T r a d e c u s t o m e r s S h a r e h o l d e r s G o v e r n m e n t a n d s o c i e t y C u s t o m e r s o f o u r t r a d e c u s t o m e r s INDIRECT DIRECT Stakeholder and forms of engagement Trade cusandmers pages 84 and 85 Workforce pages 86 and 87 Suppliers pages 88 and 89 Pensioners pages 88 and 89 Shareholders pages 90 and 91 Engagement with our trade customers includes the following: • Local depots • Customer research • Customer surveys Twice a year, to ensure we keep abreast of any emerging  (depots, builders, and end-users), we carry out 'Voice of the Customer' research. During 2023, we received around 2,500 responses from this research. This has helped inform the prioritisation within our brand strategy. Brochure research focus group In 2023, we carried out research with both end-users and our depots to understand the purchase journey and role of the brochure, the brochure's performance versus competitors', and perceptions of Howdens. A mix of qualitative and quantitative methodologies was used, including focus groups and online surveys. Follow up surveys were also completed to assess improvements made in our follow-up edition of the brochure. Cabinet research study As part of our continual efforts to make builders' lives easier, we undertook a cabinet research study with our builder customers to understand the importance and perception of our cabinet quality.  part in four focus groups across two sites – one in the North and another in the South. The outcome focused on ensuring Howdens' cabinets remain best in class for our customers, with options for future improvements being investigated. Local depots The primary method of engaging with our trade customers since Howdens opened its doors in 1995 has been through conversations at the local depot. The relationship between the depot manager and the trade customer has always been at the heart of what we do. Our depot managers feed back our trade customers' views to management at Regional Board meetings (see 'Workforce' on page 86 for further information), which the Trade Director is present at and which the CEO and other members of the Executive Committee frequently attend. Feedback from  decisions. However, it also reinforces our strategic decisions on new depot openings, ensuring that we are maintaining excellent customer service and investing in new product. From these meetings, managers were able to feedback directly to the CEO, Trade Director and other senior executives about any matters affecting their depots and their customers. Board members, Executive Committee members and senior managers regularly visit depots to ensure they hear from  Trade customer surveys In addition to the face-to-face conversations we have with our customers in our depots, we run monthly trade customer surveys to better understand our trade customers' sentiment, price and value perceptions, purchase behaviour, business prospects, 'cost of living impacts', and forecasted activity. Ad hoc 'deep dive' surveys are also used to ask trade customers about various product categories, including what is important to them within those product categories, what more they need from us, and what could cause them to shop elsewhere. In 2023, we completed deep dive surveys for all of our core categories. We received around 10,000 responses from our customers which has helped inform category strategy including supporting with brand and ranging direction, and depot training. Trade customers 85 Howden Joinery Group Plc Annual Report & Accounts 2023 84 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Stakeholder engagementGovernance GovernancePage Title Page Title Workforce Engagement with our workforce includes the following: • Employee engagement survey • Regional Board meetings • Townhalls and feedback sessions • Trade union and works council meetings • Whistleblowing helpline Governance Corporate governance report continued Stakeholder engagement continued Our CEO also attends a majority of these Regional Board meetings. Certain support functions (including Supply, Commercial, Finance, and HR) also regularly attend. Members of the Board periodically attend Regional Board meetings.  Regional Board meetings held per region per year, providing many opportunities each year for two-way discussions about critical business issues. Townhalls and feedback sessions The Operations Director continues to hold at least two business updates each year for all employees based at our manufacturing and logistics locations, supported by members of the Operations Leadership Team. The Operations Leadership Team also hold ‘Ask away’ sessions with groups of employees. All new starters are invited to a 'Meet and Greet' session with members of the Operations Leadership Team and, as part of that, all new starters are asked for their feedback about what they are enjoying and what we could do better. At each of our manufacturing and logistic sites regular feedback sessions are held with employees. It was through these channels that employees continue to express any concerns or opportunities for improvement. Following some of these sessions, we have committed to improving our agreement for ‘Flexible Working Arrangements’, ensuring people have a better balance, whilst also ensuring we continue to maintain our excellent service levels. Monthly townhalls are hosted by our Supply Chain Director, who is also acting Commercial Director, and separately by   Employees are given the opportunity to ask questions and the meetings also act as an opportunity to give recognition to employees who are going 'above and beyond' in their work. Informal feedback sessions are hosted by area managers to address local issues in depots. These sessions are usually organised by job role, but may also be organised by depot or  are resolved locally. Where there are broader issues, area managers will liaise with the wider business for a resolution. These forums also act as an opportunity to exchange best practice as well as to meet colleagues from other depots. Engagement with the Trade Union and works councils Howdens respects the collective bargaining of its employees and actively engages with the Trade Union and works councils collectively at least quarterly. Local sites host Trade Union representative meetings and works councils meetings monthly. Site leadership and HR attend these meetings. In 2023, we continued to engage with the collective groups and undertook training together, facilitated by ACAS to help build even more productive and effective working relationships. As a result of the feedback from our trade union and works council groups, we have made enhancements to payslip access and remuneration information, launched the new in-house Occupational Health service, expanded and developed our wellbeing support framework including new wellbeing rep training via  and provision. In 2023, a new Employee Engagement Forum was created in HWS West (Normanton) to ensure that as we harmonised terms and conditions we did it in a way that included, involved, and had the employee voice at the heart of what we did. This Forum meets on a regular basis to focus on the issues and opportunities most important to our workforce. We strongly believe direct communication is the best method of engagement. The Howdens Show In January 2023, we hosted the Howdens Show, which welcomed over 1,100 employees to the International Convention Centre in Wales. Our CEO hosted the event, which was a chance to set the scene for the year ahead and it featured business, charity and community updates from senior members of staff from across the business. The Board's workforce engagement arrangements Following the retirement in 2023 of Geoff Drabble, who was the Non-Executive Director Responsible for Workforce Engagement, a review of workforce engagement by the Board was undertaken. Given the complexity of Howdens operations (when considering the variety of role types in our vertically integrated business and its various geographies), it was agreed by the Board that workforce engagement would become a collective responsibility for the all the Board members. This will ensure that the diversity of Howdens workforce are properly and proportionately represented. Further detail about the new arrangements is set out on page 92. Whistleblowing helpline  whistleblowing helpline. The helpline is multilingual and available 24 hours a day. The Company Secretary provides the Board with a bi-annual report which details the number and nature of whistleblowing instances made during the  Board attention, the governance processes are in place should this be deemed necessary. Best Companies survey As a result of the Best Companies survey in March 2022, we have remained focussed on providing more support for employee wellbeing, an area that was highlighted for improvement. In 2023: • We expanded our provision of employee wellbeing representatives. Nine new representatives were trained across our Support functions. This is in addition to those already at our manufacturing and logistics sites. • We have partnered with a new provider, the Retail Trust, for our Employee Assistance Programme providing a 24/7 helpline, counselling services and signposting to other support. • We have continued our focus on Mental Health, working  new partnership with Movember has further bolstered this support. As referenced on page 55, we now have a mental health toolkit and our Counter Talk podcast on mental  about mental health and to support each other. • Once again, in July 2023, we gave employees access to 'Know your numbers' (pre-peak blood pressure and resting  of Heart Month. 825 employees attended these sessions. • We continued our menopause awareness training, partnering with Wellbeing of Women and Henpicked to give us access to a range of webinars on broader women’s health issues and support tools. We have developed a Menopause e-learning package which will launch in 2024. More information is included on page 55.   employees and a further 80 attended pre-retirement sessions. We launched a new workplace ISA, a Cycle to Work scheme and a new retail discount platform via Retail Trust. We have a wellbeing calendar for 2024, which continues to build on the themes of men’s and women’s physical health,  internal comms and a hub on our intranet site. Further information on inclusion and wellbeing may be found on pages 54 and 55 of the Sustainability matters report. Regional Board meetings Regional Board meetings are a forum for the depot leadership team and Executive Committee members to discuss strategy and day-to-day business matters on a regular basis. Our Trade Director (and, previously, our COO of Trade) attends all meetings and all regional directors, area managers, and depot managers attend the meetings applicable to their region. 87 Howden Joinery Group Plc Annual Report & Accounts 2023 86 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title Governance Suppliers Category team relationships and supplier management Our internal commercial structure is organised into categories. The use of categories provides clearer accountabilities for product ranging decisions and with greater internal accountability comes the fostering of stronger relationships with our suppliers. Suppliers are engaged with focused teams within the organisation   In addition, we have also partnered with SAP Ariba to further strengthen the way we do business with our suppliers in an  Supplier Life Cycle Performance (SLP) has helped improve the onboarding and management of our suppliers and allows  In November 2023, we applied the successful format of the July summit to a further collaboration summit with one of our appliance suppliers and their parent company. Further information about the supplier engagement activities we undertook in support of our Net Zero plans, and the outcomes of these, can be found on page 49 within our  Supplier conferences Maintaining strong supplier relationships based on trust is a key facet of our resilient business model (see page 15). Co-operative engagement with suppliers on new products and the scale necessary to support suppliers' businesses and investment plans helps us to ensure the relationships are enduring and worthwhile for both parties. Supplier engagement is also key in our plans to achieve our Net Zero SBT Plans (further detail about our Net Zero SBT Plans can be found on pages 46 and 47). In July 2023, we  partnership with one of our largest cabinet frontal suppliers. Engagement with our suppliers includes the following: • Supplier conferences and meetings • Category team relationships Pensioners Engagement with our pensioners includes the following: • Board engagement with the Trustee Board • Newsletters • Triennial valuations  ‘DB Plan’) has over 10,300 members, of whom c.5,700 are deferred members, and c.4,600 are pensioners  Board engagement with the Trustee Board The Trustee Board, chaired by an independent trustee, is responsible for investment strategy and for the day-to- day running of the DB Plan. There are a number of matters reserved for the Company as sponsor under the Trust deed, and the Board invites the Chair of the Trustees to present  affecting the membership. The Company and Trustees  reviewed annually. In 2023, the Company engaged with the Trustee Board on a number of matters outside of the normal engagement cycle of investment and funding strategy, including: •  •  •  The triennial actuarial review as at 31 March 2023 was completed in November 2023. The Company agreed to  £12m per year and continued the ‘switch off’ mechanism if full funding on the Technical Provisions basis is met for two consecutive periods. The Company and the Trustees agreed that, as the Plan was fully funded on a Technical Provisions basis at the date the  payments should cease and resume only if there were two  Technical Provisions basis). Since November, there have not   have not resumed. •   • enhanced monitoring of LDI collateral headroom and  •  • preparations for the pensions dashboard roll out. Newsletters In October 2022, a newsletter was sent to all members of the DB Plan. The newsletter provided updates on matters such as Trustee Board changes, appointment of a new Plan actuary, changes to the online member portal, latest funding position  Triennial valuations Ensuring that there is an appropriate balance between  priority for the Board.    Corporate governance report continued Stakeholder engagement continued 89 Howden Joinery Group Plc Annual Report & Accounts 2023 88 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title Governance Engagement with our shareholders includes the following: • Annual General Meeting • Shareholder meetings and roadshows Annual General Meeting (AGM) The 2023 AGM was held in-person and was an opportunity for the Board members to be able to converse with shareholders and to present their updates to them directly. Members of our Executive Committee and senior leadership team were also present to meet with shareholders outside of the formal business of the meeting. During the Q&A session at the AGM, the Board was asked questions on the following topics: stock availability and team incentives. The questions raised were answered fully on the day and no further action or considerations were required. In addition to the in-person meeting, shareholders were provided with the opportunity to submit any questions they had of their Board of Directors through a question facility on the Company’s corporate website. This facility remained open throughout the year following the conclusion of the AGM. During the year the major activities were as follows: • Engagement with the 15 sell side analysts who cover the Company and maintenance of Company compiled consensus forecasts. •  shareholders and the Executive Directors and Director of Investor Relations. • Ad hoc in-person and virtual one-to-one meetings as requested by shareholders and non-holders. • Site visits to our factory in Howden and depots with small groups of institutional holders and non holders to highlight our key strategic initiatives. • Site visits to London based depots to highlight the capabilities of our new reformatted depots and small format depots. • Supporting industry conferences held by the major banks selling equities. • Targeted marketing roadshows to major investor hubs internationally. Shareholder meetings During 2023, we continued to focus our approach working with our corporate brokers to identify potential target investors located in the major investor hubs internationally. This included domestic investors in the UK but also international funds buying equities in North America and Europe. For  investors, which includes a mix of both existing holders that are underweight in our stock and non-holders who are already invested in distribution peers. This targeting work has been used to prioritise meetings for the investor programme throughout the year. Following each period end, the Board is provided with an investor relations update, which gives an overview of investor feedback. The Director of Investor Relations regularly provides feedback at Board meetings on the investor relations programme. Following the half-year and full-year results, more detailed feedback sessions were held with the  Company’s strategy. In summary, investors continue to be supportive of the Company’s strategic initiatives and the resilience of Howdens' business model despite challenging market conditions. Shareholders Corporate governance report continued Stakeholder engagement continued 91 Howden Joinery Group Plc Annual Report & Accounts 2023 90 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title Governance Corporate governance report continued 2018 UK Corporate Governance Code: application and compliance 2018 UK Corporate Governance Code: application of Principles The Financial Reporting Council (FRC) published the 2024 UK Corporate Governance Code on 22 January 2024. This iteration of the UK Corporate Governance Code will, in the  commencing 1 January 2025. This Annual Report and Accounts has been prepared under the 2018 UK Corporate Governance Code (the ‘Code’), which applies to accounting periods beginning on or after 1 January 2019. We are pleased to report that the Company applied all the Principles of the Code throughout the period, and   was compliant with all Provisions of the Code, except for Provisions 5, 12, 40, and 41. Provision 5 provides that boards should understand the views of the company’s other key stakeholders and that, for engagement with the workforce, one or a combination of the following methods should be used: (i) a director appointed  (iii) a designated non-executive director. From the beginning of the reporting period until 4 May 2023, the Company was compliant with Provision 5 having appointed Geoff Drabble as the Non-Executive Director Responsible for Workforce Engagement in 2019. Following Geoff’s retirement from the Board, a review of workforce engagement by the Board was undertaken and it was agreed that, given the complexity of Howdens operations (when considering the variety of role types in our vertically integrated business and its various geographies), workforce engagement would become a collective responsibility for the Board. This will ensure that the diversity of Howdens' workforce is properly and proportionately represented. The Board will consider employee engagement at two dedicated sessions each year and a dashboard of key employee engagement metrics will be developed for these meetings. In keeping with Howdens’ culture of open and direct feedback, an annual programme of employee engagement events will be collated, which will  listening sessions, EDI listening sessions, town hall sessions and other engagement activities. Non-Executive Directors will be expected to attend a minimum number of sessions each year and to provide feedback formally after each session.  satisfy Provision 5 of the Code, and an explanation of the effectiveness of the new arrangements will be reported in the 2024 Annual Report and Accounts. During the period of review of workforce engagement by the Board during 2023, members of the Board continued to attend Regional Board meetings across the country (further information on these  Managers were able to directly engage with the Directors   and Board members actively engage with each of these groups. A detailed explanation of our engagement with our shareholders and wider stakeholder base, and how this engagement has informed the Board’s decision making processes can be found on pages 82 to 91. How the Board members discharged their ‘Section 172’ statutory directors' duties is described on pages 82 and 83. The Board and its committees review workforce policies and practices on a regular basis. A Group policy framework has been established and is reported on to the Board on an annual basis, as well as any updates needed for Group policies. Part of this review includes ensuring that policies remain aligned to the Howdens culture and support long-term success. One example of this is how our Remuneration Committee considers the pay policies and practices of the wider workforce when determining Executive reward. More information in this regard can be found on page 122. All employees are able to raise any matters of concern using  available 24 hours a day, it is multilingual, and it is operated by an independent third party. The Board receives reporting  concern are escalated as appropriate by the Company Secretary who oversees the helpline with support from the internal audit team. Section 1: Board leadership and company purpose In order for the company to meet its responsibilities to shareholders and stakeholders, the board should ensure effective engagement with, and encourage participation from, these parties. The board should ensure that workforce policies and practices are consistent with the company’s values and support its long-term sustainable success. The workforce should be able to raise any matters of concern. E D Howdens’ founding principle of being worthwhile for all concerned supports the premise that its role is to ensure long-  Further information on our resilient business model and strategy can be found on pages 8 to 15. Our contribution to wider society and our statement of the extent of consistency with the TCFD framework can be found in our Sustainability matters report beginning on page 42. Governing in an effective way ensures the framework and controls needed to align our operations with our strategy are in place. It is only by doing this that we can ensure long-term strategic success of the Company for our stakeholders. We discuss throughout the Governance section how our actions help to preserve the value that the business generates and how they support the strategy. For example, we have set out the way our remuneration structure supports our strategic aims on pages 113 to 116. An explanation of our purpose, values and strategy are set out in the strategic report which starts on page 8. The Board regularly discusses the importance of Howdens’ unique culture and are mindful that it remains aligned with its purpose, values and strategy. Workforce engagement is also an important part of the Board’s agenda and more information about the methods of engagement with the workforce may be found on pages 86 and 87. Integrity and sympathy to the Howdens culture are paramount when the Board recruits new members to the Board. More information about our recruitment and inductions process can be found on page 103. A B A successful company is led by an effective and entrepreneurial board, whose role is to promote the long-term sustainable success of the company, generating value for shareholders and contributing to wider society. The board should establish the company’s purpose, values and strategy, and satisfy itself that these and its culture are aligned. All directors must act with integrity, lead by example and promote the desired culture. The Board considers the attendance at Regional Board meetings (which are Howdens’ primary method for direct   effective measure of employee sentiment. The Board has also received regular updates from management on matters such as trade union and workers council relations. Provision 12 provides that the board should appoint one of the independent non-executive directors to be the senior independent director (SID). Until 4 May 2023, Geoff Drabble held this role. The role is now held by Andrew Cripps, who was appointed to it on 13 July 2023. Whilst there was a technical breach of this provision for a short period during this reporting period, this occurred during a quiet time in both our Board and corporate calendars and, should an urgent need have arisen, the Board had long-serving members with previous    Provision 40 provides that when determining executive director remuneration policy and practices, remuneration committees should address whether remuneration arrangements promote effective engagement with the workforce. Provision 41 provides that the annual report of remuneration committees should include a description of the engagement that has taken place with the workforce to explain how executive remuneration aligns with wider company pay policy. The Remuneration Committee did not directly consult with the workforce on Executive Director   across the workforce to ensure that there is good alignment on remuneration across the organisation as a whole. In addition, the Company's Share Incentive Plan (SIP), which is a UK all-employee share plan, allows all employees with shares held in the SIP trust to exercise voting rights on those shares. This means our UK employees with SIP shares (the majority of the workforce) are able to vote on the Directors' remuneration report and the Directors' remuneration policy (when applicable) at general meetings of the Company. The UK Corporate Governance Code 2024 has removed Provision 40 of the 2018 Code and therefore there will be no non-compliance with this provision when the 2024 version of the Code is adopted. The Remuneration Committee will keep under review the need to engage the workforce more directly on Executive remuneration arrangements. Details of how Executive Director pay is considered in the context of the workforce is set out on page 122.  place to ensure that the Company meets its objectives and measures performance against them. Our KPIs and how we have performed against them can be found on pages 28  More information on our risk processes, including our principal and emerging risks, can be found on pages 36 to 41. Our Audit Committee report provides a summary of our internal control framework on page 138. The board should ensure that the necessary resources are in place for the company to meet its objectives and measure performance against them. The board should also establish a framework of prudent and effective controls, which enable risk to be assessed and managed. C 93 Howden Joinery Group Plc Annual Report & Accounts 2023 92 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report 2018 UK Corporate Governance Code: application and complianceGovernance GovernancePage Title Page Title Governance Corporate governance report continued 2018 UK Corporate Governance Code: application of Principles continued At least half of the Board was made up of Independent Non-Executive Directors (not including the Chairman) throughout the reporting period. The Non-Executive Directors that the Board considered to be independent are shown  the Non-Executive Directors (excluding the Chairman) were independent during the reporting period and that the Chairman was independent on appointment. There is a clear division of responsibilities between the leadership in the organisation. The responsibilities of the Chairman, Chief Executive, and Senior Independent Director may be found on the Company’s website (www. howdenjoinerygroupplc.com/governance/division-of- responsibilities) and the function of the Board Committees may be found in the respective committee terms of reference, also available on the Company’s website (www. howdenjoinerygroupplc.com/governance/tor-and- schedule-of-matters). All of the Directors of the Company have access to the advice of the Company Secretary, who is responsible for advising the Board on all governance matters. The Board has implemented a Group policy framework which is considered by the Board on an annual basis. Individual policies and associated practices are considered alongside  As stated in the Schedule of Matters Reserved for the Board (which may be found at www.howdenjoinerygroupplc.com/ governance/tor-and-schedule-of-matters) the appointment  Board as a whole. Section 2: Division of responsibilities continued Section 2: Division of responsibilities continued The board, supported by the company secretary, should ensure that it has the policies, processes, information,  The Nominations Committee engages external search consultancies when searching for Board position candidates. Further information about the appointments process is available on page 103 of the Nominations Committee report and the Board’s diversity policy is available on page 102. The Nominations Committee regularly reviews the skills matrix and the tenure of each Board member (see pages 100, 103 and 104 for further details). This ensures the Board’s succession plan remains aligned with the natural rotation of Directors off the Board and the strategic objectives of  The succession plans for the senior management team are regularly reviewed by the Nominations Committee. The Board uses a skills matrix to ensure it has the necessary combination of skills, experience and knowledge to meet its strategic objectives, business priorities and to ensure the unique Howdens culture is maintained. The skills matrix may be found on page 100. The tenure of each Director may be found on pages 103 and 104. The Board has a good balance of new and longer-serving Directors. As at the year end date, tenures of the Non- Executive Directors (including the Chairman) range from 6  Section 3: Composition, succession and evaluation Appointments to the board should be subject to a formal, rigorous and transparent procedure, and an effective succession plan should be maintained for board and senior management. Both appointments and succession plans should be based on merit and objective criteria and, within this context, should promote diversity of gender, social and ethnic backgrounds, cognitive and personal strengths. The board and its committees should have a combination of skills, experience and knowledge. Consideration should be given to the length of service of the board as a whole and membership regularly refreshed. G I K J The board should include an appropriate combination of executive and non-executive (and, in particular, independent non-executive) directors, such that no one individual or small group of individuals dominates the board’s decision-making. There should be a clear division of responsibilities between the leadership of the board and the executive leadership of the company’s business.  appointment when assessed against the circumstances set out in Provision 10 of the Code. The roles of Chief Executive and Chairman are not held by the same individual and the Chairman has never held the position of Chief Executive of the Company. These factors help ensure that the Chairman demonstrates objective judgement throughout his tenure. The Chairman is mindful of his role in facilitating constructive Board relations and promoting a culture of openness and debate amongst the Board. This in turn encourages the  The 2023 internal Board evaluation concluded that the Board was effective, supportive of management and doing well. Further information about the outcomes and process of the evaluation may be found on pages 106 and 107. The Chairman is also mindful of the need for the Directors to receive information which is accurate, timely and clear. He is supported in this by the Company Secretary, who ensures the  Board and senior management. The chair leads the board and is responsible for its overall effectiveness in directing the company. They should demonstrate objective judgement throughout their tenure and promote a culture of openness and debate. In addition, the chair facilitates constructive board relations and the effective contribution of all non-executive directors, and ensures that directors receive accurate, timely and clear information. F The number of Board meetings which were held during the reporting period and the attendance at each of these meetings may be found on page 74. Similarly, the number of meetings of each Board Committee and the attendance may be found on the following pages: 98 (Nominations Committee), 108 (Remuneration Committee), 132 (Audit Committee), and 140 (Sustainability Committee). When reviewing the Nominations Committee’s recommendation to appoint a new Director, the Board will always assess whether the candidate is able to allocate enough time to the role. Similarly, when assessing the acceptability of an existing Director’s wish to take on external appointments, the Board will assess the additional demand on that Director’s time before authorising the appointment. This occurs within the Board's agreed existing protocol whereby  Director of the Company must be approved by the Board before they are entered into. This is set out in the Schedule of Matters Reserved for the Board which may be found on the Company’s website (www.howdenjoinerygroupplc. com/governance/tor-and-schedule-of-matters). During the reporting period, no existing Directors took on additional external appointments. Members of the senior management team regularly presented to the Board (see pages 78 and 79 for a timeline of Board meetings and information regarding any Executive Committee attendees), which provided an opportunity for the Board to constructively challenge and to provide advice to our senior management team.  duties Directors owe the Company and either their personal interests or other duties they owe to a third party may be found on pages 135 and 139.  time to meet their board responsibilities. They should provide constructive challenge, strategic guidance, offer specialist advice and hold management to account. H Details of the 2023 internal Board evaluation process and outcomes may be found on pages 106 and 107 of the Nominations Committee report.  Director’s contribution is, and continues to be, important to the Company’s long-term sustainable success may be found   accompany the resolutions to elect or re-elect Directors in the 2024 AGM Notice. The Board recommends that shareholders vote in favour of the election or re-election of all the Directors. Annual evaluation of the board should consider its composition, diversity and how effectively members work together to achieve objectives. Individual evaluation should demonstrate whether  L 95 Howden Joinery Group Plc Annual Report & Accounts 2023 94 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title Governance The Board has established formal and transparent policies and procedures, which ensure the external auditor and internal audit function are independent and effective and are accountable to the Audit Committee. The Board also  statements of the Company through the Audit Committee. Further information about the work of the Audit Committee, including the subjects above, may be found in the Audit Committee report, which begins on page 132. A statement regarding the Directors’ responsibility for preparing the Annual Report and Accounts and the Directors’ assessment of the Annual Report and Accounts, taken as a whole, as being fair, balanced and understandable and providing the necessary information for shareholders to assess the Company’s position, performance, business model and strategy, can be found on page 144. The Board is responsible for the Group’s systems of internal control and risk management, and for reviewing their effectiveness. The Board is assisted with these responsibilities by the Audit Committee. Such a system is designed to manage rather than eliminate the risks of failure to achieve business objectives, as well as to help the business take appropriate opportunities. The Board has conducted reviews of the effectiveness of the system of internal controls through the processes described within the 'Risk management' and ‘Principal risks and uncertainties’ sections (see pages 36 to  the Guidance on Risk Management, Internal Control and Related Financial and Business Reporting. As described in the Audit Committee report on page 138, the management team continued to strengthen our overall control framework. This work to further enhance internal controls will lead to better  and automate controls and improve visibility to the Executive Committee, Audit Committee and Board in a consistent way across the Group. The assessment of the principal and emerging risks, the uncertainties facing the Group, and the ongoing process for  faced by the Group is set out in the 'Risk management' and ‘Principal risks and uncertainties’ sections (see pages 36  assessment of the principal and emerging risks. Section 4: Audit, risk and internal control The board should establish formal and transparent policies and procedures to ensure the independence and effectiveness of internal and external audit functions and satisfy itself on the  The board should present a fair, balanced and understandable assessment of the company’s position and prospects. The board should establish procedures to manage risk, oversee the internal control framework, and determine the nature and extent of the principal risks the company is willing to take in order to  By order of the Board Peter Ventress Chairman 28 February 2024 The way the Remuneration Committee has ensured our remuneration policies and practices are aligned with our culture, our strategy and risk management is discussed in the  The Remuneration Committee has delegated responsibility for setting the Executive Directors’ remuneration under the shareholder-approved Directors' remuneration policy (the full policy is set out in full at www.howdenjoinerygroupplc. com/governance/remuneration-policy). The Remuneration Committee also has delegated responsibility for setting the Chair of the Board’s remuneration and the remuneration of senior management (i.e. the members of the Executive Committee and the Company Secretary). No Director is able to determine their own remuneration outcome. The Remuneration Committee reviews workforce remuneration and related policies when setting Executive Director remuneration. Ensuring these factors are always considered means our remuneration policies are clear and as predictable as possible. Further information can be found in the Remuneration Committee report on page 122. The Remuneration Committee membership is made up of only independent Non-Executive Directors. Details of whether the Remuneration Committee exercised its discretion during the year can be found on page 109 of the Remuneration Committee report. Section 5: Remuneration Remuneration policies and practices should be designed to support strategy and promote long- term sustainable success. Executive remuneration should be aligned to company purpose and values, and be clearly linked to the successful delivery of the company’s long-term strategy. A formal and transparent procedure for  determining director and senior management remuneration should be established. No director should be involved in deciding their own remuneration outcome. Directors should exercise independent judgement and discretion when authorising remuneration outcomes, taking account of company and individual performance, and wider circumstances. Corporate governance report continued 2018 UK Corporate Governance Code: application of Principles continued M P Q R N O 97 Howden Joinery Group Plc Annual Report & Accounts 2023 96 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title GovernanceGovernance 2023 Nominations Committee activity Introduction from the Nominations Committee Chair I am pleased to present this report covering the work of the Nominations Committee in 2023.  Committee and we have made good progress during the year. One of the main features of the role of the Chairman of the Board is to take a leading role in determining the composition and structure of the board. I was very fortunate to inherit an engaged and well-balanced Board with a good mix of skills and experience when I took on the role in 2022, but with routine retirements during 2023 and coming in 2024 we have an opportunity to build a Board of Directors to support Howdens and the management team in the next phase of its development. There is also an opportunity to address some of the wider diversity issues that all companies are currently facing. The Nominations Committee primary function is to enable the Board to put the right people in the right places, both at Board and senior management level. It must do so in a way that is transparent and procedurally fair to ensure the avoidance of bias and I am pleased that the Committee has been engaged and challenged throughout the year. Succession During 2023 two directors retired from the Board and two were appointed. Geoff Drabble and Debbie White retired with nearly 15 years of Howdens’ experience between them. They have been replaced by Louis Eperjesi and Vanda Murray who bring a huge amount of relevant sector and executive experience to the table. Details of the appointment processes for both Louis and Vanda are contained in this report on page 103. Karen Caddick also expressed her intention to retire from the Board following the AGM in 2024 and therefore Vanda will additionally take on the role of Remuneration Committee Chair following Karen's retirement. The Committee was also involved with new appointments to the Executive Committee and received an update from the Chief Executive on his senior management succession strategy. We have included a case study in this report on the induction of the new Trade Director (page 105). Composition and diversity The Nominations Committee remains mindful of the  that it brings to our teams. More information on Howdens’ ongoing equality, diversity and inclusion programmes can be found on pages 54 and 55 of the Sustainability matters report. In 2023, the Committee committed to meeting the gender and ethnicity targets contained in the FTSE Women Leaders Review and the Parker Review. We remain committed to these targets but, following Howdens’ readmission to the FTSE 100 in September 2023, we are no longer in line with the recommendations of the Parker Review. It is our intention to be compliant with the recommendations of the Parker Review and appoint at least one director from an ethnic minority background before the end of 2024. Similarly, it is the Committee’s intention to be compliant with the recommendations of the FTSE Women Leaders Review to have at least 40% female representation on the Board and to have  SID, CEO and CFO) by the end of the year. I look forward to providing an update on our progress in the 2024 Nominations Committee Report. Evaluation In line with the Board’s stated practice, we conducted an  a third-party platform was used to collate more quantitative data on the Board’s perceptions of its priorities, strategic objectives, and leadership, as well as governance structures and process. More information on the Board evaluation process and outcomes is set out on pages 106 and 107. I look forward to answering any questions on the work of the Nominations Committee from shareholders at our AGM in May. Peter Ventress Nominations Committee Chair Committee meeting (out of cycle) • Non-Executive Director succession – recommendation to appoint Louis Eperjesi to the Board and the Audit, Nominations, Remuneration and Sustainability Committees Committee meeting • Board evaluation process and outcomes • Non-Executive Director succession update • Board recommendations for AGM elections • Draft 2022 Nominations Committee report Committee meeting • Senior management talent update • Board Diversity policy • Board succession planning, including consideration of diversity, tenure and skills matrix • Internally facilitated Board evaluation approval • 2024 Nominations Committee calendar • Nominations Committee Terms of Reference Committee meeting (out of cycle) • Non-Executive Director succession – recommendation to appoint Vanda Murray to the Board and the Audit, Nominations, Remuneration and Sustainability Committees Nominations Committee report Key activities in the year ahead • All current Directors will stand for election or re-election at the AGM on 2 May 2024. • Regular updates on Executive Committee and senior management succession and talent planning will be provided to the Committee. • The Committee will undertake its review of skills, composition and size of the Board. • Review of the Boardroom Diversity Policy. • Board evaluation planning. • Review of the Committee’s Terms of Reference. Board gender split Board ethnicity split 1 Figures correct as at 30 December 2023. 2 Figures derived from the February 2024 FTSE Women Leaders Review. 1 Figures correct as at 30 December 2023. 2 Figures derived from the March 2023 Parker Review update 'Improving the Ethnic Diversity of UK Business'. February May September November 0% Howdens 1 director positions No ethnic minority representation Ethnic minority representation 2023 meeting attendance Peter Ventress (4/4) Karen Caddick (3/4) 1 Andrew Cripps (4/4) Geoff Drabble (1/2) 2 Louis Eperjesi (2/2) Louise Fowler (4/4) Debbie White (4/4) Peter Ventress Nominations Committee Chair 1 Karen was unable to attend the November Committee meeting due  2 Geoff retired from the Board following the AGM in May. The out-of-  before the AGM and therefore he did not attend. Howdens 1 37.5% Females: Male Female FTSE 100 2 42.6% Females: 18% FTSE 100 2 director positions 99 Howden Joinery Group Plc Annual Report & Accounts 2023 98 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Nominations Committee reportGovernance GovernancePage Title Page Title Governance Nominations Committee report continued Composition Skills and experience matrix The Nominations Committee used a skills matrix when assessing its Non-Executive Director succession plans. The matrix highlights where the skills and experience of our Non-Executive Directors are particularly strong, where there are opportunities to further grow the Board’s collective knowledge, and to inform the Board’s future composition as Non-Executive Directors naturally rotate off the Board. High Importance Medium Diversity Board and Executive Committee Diversity Listing Rule 9.8.6R(9) requires that a company state whether it has met certain targets on diversity. These targets and whether the Company has met them as at the reference date 1  changes to the membership of the Board have occurred between the reference date and 28 February 2024 that have affected the Company’s ability to meet one or more of the targets. Target: (i) At least 40% of the individuals on the Board of Directors are women. (ii) At least one of the following senior positions on the Board of Directors is held    (iii) At least one individual on the Board of Directors is from a minority ethnic background. Has the target been met by the Company? The Company has not yet met target (i). The Board is made up of 37.5% women. The Company has not yet met target (ii). The Company has not yet met target (iii). If the target has not been met, why this is the case: Debbie White retired as a Non- Executive Director at the end of 2023 after seven years on the Board to focus on her new role as Chair of the Co-operative Group. Had Debbie remained on the  three-year appointment period, the Board would have been compliant with this target from  stated intention to meet this target by the end of 2024. The Board has a well established CEO and CFO and appointed a new Chair in 2022. Whilst the SID role became vacant during 2023, two of the female Non-Executive Directors had indicated that they would retire from the Board in the near future and it was determined that Andrew Cripps had the most relevant experience to perform this role in the short-term whilst a longer-term   candidate for one of the roles listed above before the end of 2024. As part of its succession process, the Board considered candidates from minority ethnic backgrounds in 2023. The Board determined that alternative candidates were better suited (due to relevant sector experience, for example) for those roles at that time. However, the Company is committed to the appointment of at least one individual from an ethnic minority background before the end of 2024. The data below is presented in accordance with the FCA’s Listing Rule 9.8.6R(10). The applicable reference date 1 for this data is 30 December 2023. To collect this data, the Company asked members of the Board and Executive Management 2 to complete a  Gender identity or sex: Board Members Number of senior positions on the board (CEO, CFO, SID and Chair) Executive Management 2 Number Percentage Number Percentage Men 5 62.5% 4 6 85.7% Women 3 37.5% – 1 14.3%  – – – – – Ethnic background: Board Members Number of senior positions on the board (CEO, CFO, SID and Chair) Executive Management 2 Number Percentage Number Percentage White British or other White (including minority white groups) 8 100% 4 7 100% Mixed/Multiple Ethnic Groups – – – – – Asian/Asian British – – – – – Black/African/Caribbean/ Black British – – – – – Other ethnic group, inc. Arab – – – – –  – – – – –   change year-on-year. 2 'Executive Management' means members of the Executive Committee (not including the Executive Directors) and the Company Secretary. Skills and experience Importance Number of Non-Executive Directors Direct experience Indirect experience Industry/Sector Business-to-business H 6 0 Manufacturing H 5 1 Logistics, distribution and supply chain management H 4 2 Consumer goods H 5 1 Geographic exposure UK H 6 0 Europe M 5 1 Governance UK listed companies H 6 0 Company chair experience M 4 1 Remuneration committee chair experience M 5 1 Audit committee chair experience M 2 2 Senior independent director experience M 4 0 Policy development M 5 1 Technical Accounting and Finance H 1 5 Audit H 1 3 Executive management H 6 0 Risk management H 5 1 HR/Remuneration M 2 4 Ecommerce M 3 3 Marketing M 5 1 IT/Cyber security M 0 5 Legal M 0 4  Vertical integration H 5 1 Multisite depot operation H 3 3 HM 101 Howden Joinery Group Plc Annual Report & Accounts 2023 100 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title Governance Boardroom Diversity Policy The Board recognises the importance of ensuring that there is diversity of perspective, background, and approach in its management team and on its Board. Since the business was established in 1995, it has sought to enable individuals to progress within the organisation regardless of age, gender, socio-economic background,  We believe that it is in the interests of the business and of its shareholders for us to build a Board whose membership is diverse in perspective and experience, as this facilitates better decision-making. We are also mindful of the outputs and recommendations from both the Parker Review and the FTSE Women Leaders Review when making appointments to the Board. It is the Board’s aspiration that it will have at least one member from an ethnic minority by year end 2024. The Board will also target having a minimum female  woman director for one of the ‘Big 4’ roles (those being Senior Independent Director, Chair, CEO, and CFO) by year end 2024. The Nominations Committee will continue to seek diversity of mindset as well as of gender, race, ethnicity, and socio-economic background when considering new appointments in 2024, and it will continue to review this policy on an annual basis to ensure it remains appropriate. This policy shall also apply to each of the Audit, Nominations, and Remuneration Committees of the Board and we will ensure that at least 40% of members of each of these committees are female. More widely, we are committed to developing a long-term pipeline of executive  its stakeholders. As at 30 December 2023, 37.5% of Board members were women. Both of the Executive Directors were male. There were no members of the Board from ethnic minority groups as at 30 December 2023. Composition continued Succession An integral part of the work of the Nominations Committee is to establish and maintain a stable leadership framework and to proactively manage changes and their impacts on the future leadership needs of the Company, both in terms of Executive and Non-Executive leadership. Ensuring the correct leaders are in place enables the organisation to compete effectively in the marketplace and therefore to meet its various obligations to its stakeholders. As detailed in the rest of the report, the Nominations Committee has managed succession programmes for both the Board and senior management, which have ensured that the necessary skills, expertise and experience are present in the leadership of  Board succession The Nominations Committee regularly reviews the skills and expertise that are present on the Board and compares these to the expertise that it believes are required given the strategy, business priorities and culture of the organisation. Since Howdens began trading in 1995, its core strategy has remained largely unchanged. The market, the size, and the stage of maturity of our organisation however have changed, and so our Board has needed to evolve through sensible and well-managed succession planning that does not compromise the stability of the Board. The process normally used in relation to Non-Executive Director appointments is set out below. We continue to manage a phased succession programme for Non-Executive Directors and are pleased with the balance of length of tenure, as well as of diversity, background and perspective of our current Non- Executive Directors. Retirement The Nominations Committee is progressing a phased transition on Board succession and, as part of this process, following nearly 8 years of service, Geoff Drabble retired at the Annual General Meeting (AGM) in May 2023. In July 2023, it was announced that Debbie White would retire from the Board in December 2023. This followed the announcement that Debbie would be appointed to the board of the Co-operative Group (the 'Co-op') as an Independent Non-Executive Director in August 2023 and in February 2024 would be appointed Chair of the Co-op board. In November 2023, it was announced that Karen Caddick, who currently chairs the Remuneration Committee, would retire at the AGM in May 2024. Vanda Murray (whose appointment was also announced in November 2023) will become Chair of the Remuneration Committee following the 2024 AGM. Appointment  that a Non-Executive appointment is required to the Board, the Nominations Committee will engage an external search consultancy to undertake the process of recruiting a new Non-Executive Director. The external search consultancy would be made aware of our Boardroom Diversity Policy (if they were not already) and the  producing a diverse shortlist of candidates for the position. The skills matrix (the current version of which may be found on page 100), together with the collective knowledge, experience and diversity of the Board and the length of service of the Directors, would be used by the Committee to highlight where there were opportunities for a new Non-Executive Director to contribute to the skillset of the Board and would inform the search that external search consultancy undertake. Following longlisting and shortlisting processes, and prior to any recommendation being made by the Nominations Committee to the Board, the preferred candidate would meet with each existing member of the Board. During the year, the Nominations Committee recommended the appointment of Louis Eperjesi and Vanda Murray to  Group Diversity Policy We want Howdens to be a place where everyone is welcomed and has the opportunity to thrive, being Worthwhile for ALL concerned. We’re committed to encouraging diversity, inclusion and equality amongst our workforce and to eliminating unlawful discrimination. We value the difference a diverse workforce brings and want each employee to be respected, able to be themself and give their best. Howdens will aim to: • Create a working environment free of bullying, harassment, victimisation and unlawful discrimination, promoting dignity and respect for all, and where individual differences and the contributions of all workers are recognised and valued regardless of background. • Seek to ensure that no one is unlawfully discriminated against or harassed inside or outside the workplace (when dealing with customers, suppliers or other business contacts or when wearing Howdens branded clothing) and on work related trips or events, including social events. • Encourage equality, diversity, and inclusion in the workplace by providing training opportunities, booklets and toolkits and facilitating open conversations. • Take seriously complaints of bullying, harassment, victimisation and unlawful discrimination by employees and other workers, customers, suppliers, visitors, the public and any others during the organisation’s work activities. • Make opportunities for training, development and progress available to all staff, who will be helped and encouraged to develop to their full potential, so their talents and resources can be fully utilised to maximise  • Make decisions concerning employees based on merit, apart from those limited exemptions and exceptions set out under Equality Act 2010. • Ensure recruitment practices are fair and transparent,  • Monitor the make-up of the workforce regarding information such as age, sex, ethnic background, sexual orientation, religion, or belief, so that we continue to meet the aims and commitments set out in this policy. Nominations Committee report continued Group Gender Diversity The Nominations Committee reviews the gender statistics shown in the table below. Where other data is available, this is presented to the Committee in order to determine whether there are any implicit diversity issues. The reference date for the data below is 30 December 2023. Board of Directors Senior Management 1 Grades 1 to 3 2 Group 3 Number % Number % Number % Number % Men 5 62.5% 6 85.7% 131 74.4% 8,438 69.5% Women 3 37.5% 1 14.3% 45 25.6% 3,705 30.5% 1 Members of the Executive Committee, excluding Executive Directors and including the Company Secretary. 2 These are generally the direct reports of Senior Management and includes Grades 1 to 3 equivalents. 3 Calculated on an individual basis, not on an FTE basis. Includes UK, France, Belgium, the Republic of Ireland, and the Isle of Man. Non-Executive tenure as at 30 December 2023 8 976543210 Karen Caddick Andrew Cripps Debbie White Peter Ventress Louis Eperjesi Louise Fowler Years 103 Howden Joinery Group Plc Annual Report & Accounts 2023 102 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title Governance Nominations Committee report continued Induction Working with the Company Secretary, new Directors undertake an induction programme tailored to the needs of the individual. However, they will generally include a number of site visits and meetings with members of the Executive Committee, key employees and advisors. Site visits include our manufacturing sites, our distribution centre and depots. New Directors will also be provided with a mixture of documentation including Company publications, Board materials and some formal information on the role and responsibilities of UK-listed company directors. The Group’s induction programme for newly appointed Directors will continue to be centred on familiarisation with the Group’s operations, key individuals and external advisors.    Succession continued Senior management succession The Committee received regular updates regarding senior management 1 succession planning. These updates included the planning and processes involved with the appointment of a new Trade Director. Trade Director Stuart Livingstone joined Howdens as Trade Director in April 2023 and was appointed to the Executive Committee in September 2023. A detailed case study on his induction into the business is set out on the opposite page. The Nominations Committee will continue to work with the CEO and Group HR Director on senior management succession and development in 2024. Case study Trade Director appointment As reported in the 2022 Nominations Committee Report, Stuart Livingstone was appointed Trade Director in early 2023 with a view to taking over key aspects of Andy Witts’  following a thorough induction and handover process. Below, we set out further detail on the selection process for the role and the tailored induction and handover programme put in place for Stuart. Recruitment  and rigorous given the strategic importance of the role. From the outset of the recruitment process, we were clear that candidates needed to possess broad leadership skills, a strong sense of the importance of Howdens’ unique culture and the ability to build long term relationships  During the recruitment process, a diverse pool of candidates was considered. Short-listed candidates were  the process, both in depot and manufacturing operations. In addition to the CEO’s and Andy Witts’ involvement, selected members of the Board and Executive team met with candidates to provide better understanding  candidates performed a psychometric assessment. Stuart has a strong track record of running large scale multi-site operations in a wide range of businesses. Prior to joining Howdens, he was Operations Director at Pets at  for six years. Stuart has also held senior positions at American Golf, Kwik Fit, and Whitbread. Induction and handover When Stuart joined Howdens, he immediately began his  of his induction was divided into three distinct phases, centred around the Trade team: 1. Time in depots  in a range of depots shadowing all depot roles. A key objective of this time was to ensure that he understood  manager autonomy and entrepreneurialism, and high- quality, local trade relationships play in our business model. Another key objective was to ensure that Stuart understood the value and part each depot role plays in contributing to the success of that depot.    directors and area managers visiting around 200 depots and attending Regional Board meetings (more information about Regional Board meetings can be found on page    strategically important metrics within their teams. 3. Time with Andy Witts Over his more than 28-year tenure, Andy has amassed a vast knowledge and experience of matters relating to Howdens’ culture, the workings of the Trade team, our  of Stuart’s induction in Trade was therefore spent working shoulder-to-shoulder with Andy Witts. Stuart also closely shadowed Andy in the lead up to, and throughout, our crucial peak trading period during the autumn. In addition to his time spent with the Trade team, Stuart spent time with our Supply team. As our Supply team’s only customer is our Trade team, it was important that Stuart was able to gain a thorough understanding of how the relationship between the teams works, and that he could gain an appreciation for the scale and capabilities of the in-house manufacturing facilities as well as the goods and materials which are brought in from external partners. Stuart spent several days visiting our manufacturing and logistics sites across UK. Stuart continues to build and forge relationships with leaders across the business, including within the commercial, property and corporate teams. Since September 2023, Stuart has been an Executive Committee member and has attended the fortnightly meetings of the Committee. At the end of October 2023, following the autumn peak trading period, he fully took over primary responsibility for the Trade Division from Andy Witts. Andy remains a member of the Executive Committee in his new role as Chair of the International Businesses but he remains on hand to provide counsel to Stuart and the business as and when required. 2824 2620 2216 1812 144 620 8 10 Executive CommitteeExecutive Directors Years Company Tenure Executive Committee Tenure Andrew Livingston Paul Hayes Company and Executive Committee tenure as at 30 December 2023 David Sturdee Julian Lee Andy Witts Theresa Keating Richard Sutcliffe Stuart Livingstone 105 Howden Joinery Group Plc Annual Report & Accounts 2023 104 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title Governance Evaluation Nominations Committee report continued Methodology The process is outlined below: • Instructions were sent to Board members on how to create an account and access the platform. • All Directors were invited to provide feedback on the Board and the Committees of the Board of which they were members. Each section contained a mix of rating questions based on scale of 1 to 7 as to how much the participant agreed or disagreed with a particular statement and free text questions where the participant could provide an answer in their own words. Some roles were automatically excluded from participating in certain questions (generally where this pertained to their own role, such as the Chair). Following the external Board effectiveness review in 2022, and in line with the Board’s policy to undertake an external effectiveness review every three years, the 2023 Board effectiveness review was conducted internally. Whilst previous internal reviews had been conducted by the Senior Independent Director with support from the Company Secretary, the Nominations Committee agreed to use a third-party platform (BoardClic) to facilitate the review. Unlike previous internal reviews which relied heavily on the qualitative data provided through interviews with each of the Board members, Executive Committee members and advisors, the BoardClic platform enabled the Committee to collate more quantitative data on the Board’s perceptions of its priorities, strategic objectives, and leadership, as well as governance structures and process. The new platform also greatly streamlined the board evaluation review process and enables the Committee to benchmark its review data against other boards. It is intended to use the platform in future years (both for internal and supporting external reviews) and thereby create a more iterative process, with trends from prior years being available in future years. • Directors were also invited to provide their observations of the Board evaluation review and any other points they wanted to raise outside of the platform. • The observations and conclusions of the evaluation were presented to the Chairman and the detailed report was presented to the Nominations Committee and the Board at their meeting in February 2024. • The Chairman, CEO, and Company Secretary prepared recommendations for development and actions to be presented to the Nominations Committee at a future meeting. Conclusions and recommendations Feedback from the Board was positive overall and reiterated that Howdens is a high-functioning, high-performing Board with strong individual committees. The overall conclusion was that the Howdens Board has the requisite knowledge and experience required to support the Group’s strategy and to monitor crucial operations and manages risk well. The Board’s ‘BoardClic Value Benchmark’ (a score that encompasses a number of key aspects of value-creating  performance) was higher than the value benchmark and the Board also achieved above benchmark scores in relation to the strategy index and ESG index. The highest scores (indicating areas of particular strength) were received for questions relating to whether the Board   capacity and the prioritisation of the most important strategic topics during board meetings. Recommended areas for development and actions going forward The Chair, CEO and Company Secretary are developing a list  development highlighted by the review. These will include recommendations relating to: • Diversity. Building on the review of the talent pipeline by the Nominations Committee in 2023, the diversity opportunities at both Board and senior management  data sets. • Employee engagement. To be reviewed and a refreshed approach to employee engagement at board-level to be implemented during the year. • Board composition and culture. Initiatives to be considered to better leverage the aggregated competencies of the Board effectively. • Board succession. Prioritising the appointment of a high- calibre replacement for the Audit Committee Chair and ensuring a smooth transition at the end of 2024.  Members of the Board discussed the updated recommendations of the Parker and FTSE Women Leaders Reviews. In 2024, the Nominations Committee will continue its focus on Board and senior management succession planning and will ensure that when it looks to recommend new appointments to the Board, that the process has been inclusive not only of a broad range of mindsets, but also a variety of age, gender, socio-economic background, sexual orientation, disability and  on page 102. Nominations Committee evaluation Feedback from the Nominations Committee evaluation demonstrated that the Committee continues to deliver on its objectives and role. The Committee receives effective support as and when required from the Company Secretary and other advisors and it liaises well with the Board and  In line with the Board evaluation feedback, Committee members believe that more time should be spent on the equality, diversity and inclusion agenda. A more structured and pro-active approach to Board-level succession planning was also cited as being helpful to increasing the diversity and skills base of the Board. By order of the Board Peter Ventress Nominations Committee Chair 28 February 2024 Purpose and strategy Chair Talent and culture Risk management Board composition and dynamics Information and reporting Board agenda and meetings Relationship with senior management Evaluation areas of focus 107 Howden Joinery Group Plc Annual Report & Accounts 2023 106 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title GovernanceGovernance I am pleased to present the Howden Joinery Group Plc Remuneration Committee report for 2023. The report has been prepared in compliance with the requirements of the Large and Medium-sized Companies and Groups Regulations 2013 and incorporates changes made under the updated EU Shareholder Rights Directive (SRD II). Using this report We have sought to make our Remuneration Committee report as straightforward to access as possible. The content of the report is governed by various legislation and listed company disclosure requirements and, on occasion, this results in duplication of information. We have tried to reduce this wherever possible and present the information in an accessible and more intuitive way. The report is split into  1. This Committee Chair’s statement 2. Summary of the Directors’ remuneration policy 3. The Directors’ remuneration report We have divided the Directors’ remuneration report into four parts: Part 1 Company performance and stakeholder experience Part 2 Application of policy in 2023 Part 3 Implementation of policy in 2024 Part 4 Additional disclosures We believe that this format clearly differentiates each of the relevant sections of the Remuneration Committee report, directs users to the sections relevant to their use, and is also fully compliant with all applicable rules. 2023 2023 was a challenging year for Howdens. Relative performance was strong and the Remuneration Committee were particularly pleased with management’s performance   that were in line with market expectations, increased market share and continued to invest in strategic initiatives. It was a quieter year for the Remuneration Committee, with the changes announced in 2022 to annual bonus and long-term incentives now embedded in our annual cycle of work. There   Committee continued to monitor changes in average FTE salaries and bonuses across all operational and support roles to ensure that there remained alignment on pay between our senior management and that of the wider workforce.  to Howdens’ unique incentive culture across all roles and  a number of factors, which include pay across the wider workforce, CEO and gender pay gap ratios and the experience of our shareholders. As in previous years, the Committee also received updates  Group pension scheme. Given the importance of alignment on pensions between senior management and the wider workforce, we have included a case study on our Group pension scheme. It can be found on page 121. Howdens’ gender pay gap increased year on year from 3.9% to 5.1%. The gender pay gap report can be found on www. howdenjoinerygroupplc.com/governance/gender-pay-gap- reports. The Committee continued to challenge management to address this further. More information on our broader diversity and inclusion priorities can be found on pages 54  One area of change during 2023 was signposted in the case study in last year’s report on our review of incentives below Executive Committee level. Following the review, the Committee agreed to replace the long-term incentive plan for Grade 1s and 2s with a deferred bonus share award. This award replaced the PSP and was intended to remove some of the complexity in measures being included in the Executive awards and to result in greater retention for this group of key employees. Disappointingly, due to challenging market conditions, the performance conditions for this award were not met and as such did not result in the purchase of any deferred bonus shares. However, the Committee remains  this important cohort. Annual Remuneration Committee Chair’s statement As in previous years and reported on page 92, the Remuneration Committee did not consult with the wider workforce on Executive Director pay arrangements in 2023. The Committee has safeguards in place (as considered in this report), which ensure good alignment on remuneration across the organisation as a whole. It is worth remembering that all eligible employees with shares in the Share Incentive Plan,  Free Shares are granted to all UK employees each year, have a de facto say on Executive Director pay when such matters are considered at general meetings. 2023 reward outcomes Annual bonus Consistent with prior years, the 2023 annual bonus   As previously mentioned, market conditions were challenging  had been forecast when the budget had been determined. Despite this, PBT performance for the bonus has resulted in an above threshold outcome. In considering this outcome, the Committee noted that expenditure during the year on strategic initiatives continued and will generate future growth. The part of this expenditure that was invested in future growth rather than into 2023 PBT, attributable to the market reducing   as it is considered an exceptional cost.   exceptional expenditure and the strong overall performance Howdens has delivered relative to market. Having considered these factors, the Committee concluded that a fair and appropriate outcome under the PBT element in these circumstances would be to exercise discretion to reduce the outcome to threshold performance, which delivers 10% of the part of the bonus weighted to PBT. The Committee applied judgment in considering whether this outcome under the PBT element was appropriate, taking into  the total cost of the expenditure and the strong overall performance Howdens has delivered relative to market. The Committee concluded that a fair and appropriate outcome under the PBT element in these circumstances would be threshold performance which delivers 10% of the  exercised discretion to reduce the payout under the PBT element to threshold. Remuneration Committee report 2023 meeting attendance Karen Caddick (4/5) 1 Andrew Cripps (5/5) Geoff Drabble (2/2) Louis Eperjesi (3/3) Louise Fowler (5/5) Debbie White (5/5) Key activities in the year ahead • Governance updates from advisors. •  • Agree fees for Chair of the Board. •   • Review the Group’s Gender Pay Gap data and action plans. • Planning for 2025 incentives (taking into account risk and other matters). • Review of the Directors’ Remuneration Policy  2025 AGM. • Review of the Remuneration Committee Terms  • Approval of the 2025 Remuneration Committee calendar. Karen Caddick Remuneration Committee Chair 1 Karen was unable to attend the November Committee meeting due to illness. Andrew Cripps chaired the Committee in Karen's absence. 109 Howden Joinery Group Plc Annual Report & Accounts 2023 108 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Remuneration Committee reportGovernance GovernancePage Title Page Title Governance Remuneration Committee report continued  the continued focus of management on this key measure. The  target for this measure resulting in a bonus of 15% of the maximum annual bonus opportunity being achieved. This strong relative performance meant that a total annual bonus of 24% of the maximum annual bonus opportunity for our Executive Directors was earned. Performance Share Plan (PSP) The 2021 PSP was based on the delivery of both a three-year PBT growth measure and a relative total shareholder returns (TSR) measure. The weightings for the two performance measures were 67% PBT and 33% TSR. PBT performance targets for the period required 5% per annum PBT growth to achieve threshold vesting and 15% per annum PBT growth to achieve maximum vesting. The 2021 PSP  year period, PBT increased by 21% per annum, which equated to vesting at 100% of the total opportunity for this measure. To determine TSR performance, Howdens is ranked against a comparator group of similar sized companies, those being 50 above and 50 below Howdens by market capitalisation in the FTSE All Share index at or shortly before the start of the performance period (excluding Investment Trusts). There is zero pay out for below median performance and threshold vesting at 15% of the maximum opportunity at median. 100% of the opportunity is paid out when performance is equal to or more than upper quartile performance and there is straight-line vesting between the threshold and maximum opportunities. Howdens TSR performance during the three- year period equated to vesting at 100% of the total opportunity for this measure. In aggregate, the 2021 PSP will vest at 100% of the maximum opportunity. 2024 reward and incentives Our approach to executive remuneration recognises the need to balance the views of our shareholders with our ambitions to retain and incentivise a strong performing Executive team over the economic cycle and to live into our remuneration philosophy to pay above-market levels of reward for above- market levels of performance. In 2024, we have maintained the principles, measures and quantums used in 2023. We believe that consistency through the remuneration cycle is important for both shareholders and Executives and we are pleased that this year we have been able to maintain our core methodologies. Salary Salary increases for the Executive Directors will be no higher than the wider workforce. These will be effective from 1 April  effective date of 1 January. This timing is also aligned to increases for the wider workforce. The Committee continues to review the Executive Director remuneration packages annually against companies that operate in the same or similar sectors to Howdens and companies of a similar size and complexity. Annual bonus The Committee has maintained the annual bonus opportunity of 200% of base salary for Executive Directors. The Committee believes that this remains appropriate having reviewed the position, taking into account market data for companies that operate in the same or similar industries and UK listed companies of a similar size and complexity. For the 2024 annual bonus, we replicated the methodology  bonus. The measures retain their previous weighting of 85% of maximum opportunity for PBT and 15% of maximum  incentives and alignment with the depots, whilst maintaining a healthy stretch between target and maximum bonus levels to ensure strong shareholder alignment.  annual bonus in 2024. PSP In 2023, two new measures were introduced to the PSP in addition to the existing performance measures. The four measures: PBT, relative total shareholder returns (TSR), Return on Capital Employed (ROCE) and a basket of complementary Environmental (ESG) measures were intended  with Howdens’ culture and depot incentives), whilst adding additional focus on returns and strategically important environmental goals. The Committee also wanted to retain a relative measure that aligned Executives’ experience with that of our shareholders. The weightings were PBT 60%, TSR 20%, ROCE 10% and ESG 10% of the maximum opportunity. The Committee believes that these measures and their respective weightings remained appropriate for the 2024  addition, the Committee retained the methodology for  Annual Remuneration Committee Chair’s statement continued We signposted in last year’s report that we would be moving  the base for targets for future grants. Instead, the Committee has adopted a methodology for the PBT target range which  internal forecasts and our long-term strategic goals. We believe that this approach provides better alignment between vesting outcomes and performance and reduces the risk of volatility in the payment cycle. To ensure that our remuneration philosophy is upheld, the Committee will continue to ensure that all performance targets are suitably stretching for the level of remuneration available within the context of our internal expectations and external forecasts. Further details of the measures, targets and weightings are set out on page 127. No changes are proposed to long-term incentive opportunity for 2024, and therefore the CEO will receive an award equivalent to 270% of salary and the CFO will receive an award of 220% of salary. Pensions  have been aligned with the wider workforce. This was in line with the Committee’s commitment that there would be alignment by the time of the Company’s next policy cycle. The Directors' remuneration policy provides that new Executive Directors will only participate in the Company’s pension arrangements with contributions in line with those of the wider workforce. A case study on pension arrangements at Howdens can be found on page 121. Senior management and the wider workforce In addition to the Executive Directors, the Howdens Remuneration Committee also sets remuneration for senior management. We classify ‘senior management’ as members of the Executive Committee (excluding Executive Directors), the Company Secretary and the Head of Internal Audit  The Committee also received updates on all-employee remuneration related policies in order to provide the context for, and to ensure alignment with, the policy on Executive Director remuneration. In 2019, the Committee adopted a dashboard in line with Provision 33 of the UK Corporate Governance Code 2018, which shows some of the key internal and external measures that the Committee members are aware of when determining Executive Director and senior management remuneration (further detail on the dashboard may be found on page 122). I hope the information presented within this report provides a clear explanation as to how we have operated our Directors' remuneration policy over 2023 and how we  that the policy has operated as intended in terms of pay for performance, taking into account the exercise of Committee discretion in relation to the 2023 annual bonus outcome. We continue to be committed to an open and transparent dialogue with our stakeholders, and the Committee would welcome any feedback or comments you have on this report, our policy or how we implement the policy in 2024. We are due to review our Directors’ remuneration policy during 2024 and our new Committee Chair, Vanda Murray, will be consulting with shareholders in the second half of the year. In the meantime, I look forward to answering any questions on the work of the Remuneration Committee from shareholders at our AGM in May. Karen Caddick Remuneration Committee Chair 111 Howden Joinery Group Plc Annual Report & Accounts 2023 110 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title Governance Summary of the Directors’ remuneration policy Fixed Variable Howdens’ Directors' remuneration policy, as it is set out in our 2021 Annual Report and Accounts, was approved by shareholders at our 2022 AGM. Below is a summary of that policy, how that policy links to strategy, and consideration of some of the factors the Committee addressed when formulating the policy. How the policy has been applied during 2023 and will be applied during 2024 can be found on subsequent pages in the report. The full Directors' remuneration policy can be viewed at www.howdenjoinerygroupplc.com/governance/remuneration-policy. Executive Directors The table below sets out the key components of Executive Directors’ pay packages, including why they are used and how they are operated in practice. Remuneration is benchmarked against rewards available for equivalent roles in a suitable comparator group. In addition to benchmarking, the Committee considers general pay and employment conditions of all employees within the Group and is sensitive to these, to prevailing market conditions, and to governance requirements. Element and how it supports our strategy Operation Opportunity Performance measures Base salary Recognises the market value of the Executive Director’s role, skill, responsibilities, performance and experience. Salaries are reviewed annually, and are effective from 1 January each year. Salaries will not be changed outside of the annual review, except for in exceptional circumstances, such as a mid-year change in role.  wider employee population. Salaries are set with consideration of each Executive Director's performance in role and responsibilities, and within a range  comparable size operating in a similar sector. The peer group used is reviewed whenever benchmarking is performed, and the Committee applies judgement in identifying appropriate peer group constituent companies. The individual’s level of total remuneration against the market is considered at the same time. Reviews will also take into account the performance of the individuals, any changes in their responsibilities, pay increases for the wider workforce and internal relativities. 2023 and 2024 salary levels are detailed on page 126. None.  Provides a competitive level  Howdens pays the cost  on a monthly basis or as required for one-off events.  car allowance, health insurance and death-in-service insurance payable by the Company. None. Share award grants • Replacement share award made to incoming senior manager • PSP grant to Executive Directors and selected senior management • Grant of retention awards for certain Executive Committee members (not Executive Directors) Committee meeting •  • Annual bonus outcome and performance update on awards vesting in 2022 • Shareholder feedback on proposed changes to Executive Directors’ Remuneration not necessitating a change to Directors’ Remuneration Policy • 2023 incentive considerations (including workforce reward, shareholder alignment, CEO pay ratio and gender pay gap) • Approval of an alternative equity structure for senior managers below Executive Committee level • Draft 2022 Directors’ remuneration report • 2023 share awards planning • Chair fee review AGM • 2022 Directors' remuneration report approved by shareholders Committee meeting •  awards • Governance update • Review of the treatment of post-vesting holding period for Good Leavers Committee meeting •  awards • Risk and rewards consideration • 2024 incentives • Review of LTIP measures • 2024 Remuneration Committee calendar • Review of Committee’s terms of reference Committee meeting • Review of Annual Bonus and LTIP measures • Review of package for incoming Executive Committee member Committee meeting • Shareholder feedback on proposed changes to Executive Directors’ Remuneration not necessitating a change to Directors’ Remuneration Policy • Executive Director and senior management salary review • Approval of additional retention awards for certain Executive Committee members (not Executive Directors) Shareholder communication • Conclusions of the Remuneration Committee in relation to proposed changes to Executive Directors’ Remuneration not necessitating a change to Directors’ Remuneration Policy January February May July November September March/April Remuneration Committee report continued Annual Remuneration Committee Chair’s statement continued Share award grants • SIP Free Shares grant to all eligible UK employees • Retention award granted for senior manager (not Executive Director) August 2023 Remuneration Committee activity 113 Howden Joinery Group Plc Annual Report & Accounts 2023 112 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title Governance Element and how it supports our strategy Operation Opportunity Performance measures Annual bonus Incentivises annual performance  year. Deferral links bonus payout to share price performance over the medium-term. Performance is assessed annually against targets made up of  At least 30% of any bonus earned is deferred into shares. Shares are paid out on the second anniversary of deferral date. The Committee has the discretion to adjust the bonus outcome in light of overall underlying performance. Any adjustment made using this discretion will be explained in the following Annual Report on Remuneration. Payment is subject to continued employment. Malus provisions apply for the duration of the performance period and to shares held under deferral. Clawback provisions apply to cash amounts paid for two years following payment. Therefore clawback and/or malus will operate on the award for a total period of up to two years after the performance period. Clawback may be applied in the following scenarios: •  •  • where the number of plan shares under an award was  • gross misconduct by a Director. The threshold for the annual bonus will be dependent on the individual measures used each year. For 2024, the annual bonus will be based on PBT and  payout being 20% of salary. The maximum opportunity under the annual bonus is 200% of salary.  bonus level will be 200% of salary, with the position reviewed each year. For 2024 the annual bonus will be based on PBT  measures. The Committee retains the  use alternative measures during the life of this policy, subject to at least 75% of the bonus being based on  Performance Share Plan (PSP) Focuses management on longer-term  than addressed by the annual bonus. Long-  growth is key to the generation of shareholder value. Executives have the opportunity to participate in the PSP on an annual basis. The PSP operates over a three-year vesting cycle. Under the PSP, awards will generally be granted towards the beginning of the performance period and vest based on performance over the following three-year performance period. Malus provisions apply for the duration of the  The Committee has the discretion to adjust the PSP outcome in light of overall underlying performance. Any adjustment made using this discretion will be explained in the following Annual Report on Remuneration. Vested awards are subject to a two-year holding period following vesting, during which no performance  Clawback provisions apply for the duration of the holding period, through which vested awards maybe reclaimed in the event of: •  •  • where the number of plan shares under an award was  • gross misconduct by a Director. No dividends accrue on unvested shares. The threshold for the PSP will be 15% of maximum. This may be amended by the Committee dependent on the maximum opportunity  The maximum opportunity under the PSP is 270% of salary and the grant level for the CEO will be 270% and for the CFO will be 220%. For 2024, the PSP will be based on PBT growth, relative TSR, return on capital employed, and an environmental measure. The Committee retains the  use alternative measures during the life of this policy, subject to at least 75% of the PSP being based on  Summary of the Directors’ remuneration policy continued Remuneration Committee report continued Element and how it supports our strategy Operation Opportunity Performance measures Shareholding requirement Shareholding requirement strengthens alignment of interests between participants and shareholders. Executive Directors are expected to retain vested shares from deferred bonus and long-term incentive awards (net of income tax and national insurance contributions) until they reach the minimum requirements. Unvested deferred bonus and long-term incentive shares are not taken into account. PSP shares within a holding period are counted towards the requirement. Executive Directors will be required to retain 100% of their shareholding requirement (i.e. 200% of base salary or full actual holding if lower) for two years post-cessation from the Board of Howden Joinery Group Plc. Pension Provides competitive long- term savings opportunities. Executive Directors will be entitled to participate in the Howdens Retirement Savings Plan with contribution rates in line with the wider workforce. The level of salary supplement is  None. All-employee share incentive plan To encourage employee share ownership. Executive Directors are able to participate in the tax- advantaged Share Incentive Plan available to all eligible UK employees. The maximum participation levels will be set based on the applicable limits set by HMRC. None. Remuneration policy for other employees  Committee believes it is appropriate that all reward received by senior management is directly linked to the performance of the Company and aligned with shareholder value. Accordingly, Executive Committee members and selected senior managers participate in the same incentive schemes as the Executive Directors, at a reduced level, to ensure alignment between the  Below Executive Committee level, certain senior management grade participate in a similar annual bonus plan that is linked to  a deferred bonus share arrangement replaced the PSP for these employees. Given the variable pay-outs of the LTIP in recent years and the increasing complex measures being introduced for the Executive award, it was felt that an alternative structure would be more effective, providing a greater level of understanding and engagement, and therefore retention, among this cohort of employees. Free shares grants are made at a reduced level to a wider population within Howdens that do not use performance conditions to encourage share ownership throughout the Company. Employees can also purchase additional shares in the Company in a tax  Fixed Variable 115 Howden Joinery Group Plc Annual Report & Accounts 2023 114 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title Governance Non-Executive Directors' remuneration policy  Element and how it supports our strategy Operation Opportunity Performance Measures Fees To attract NEDs who have a broad range of experience and skills to oversee the implementation of  The fees for the Non-Executive Directors are determined by the Board Chair and Chief Executive and approved by the Board. The fee for the Board Chair is determined    No other services are provided to the Group by Non-Executive Directors. Fees for Non-Executive Directors are set out in the statement of implementation of policy on page 126.  responsibilities of the roles. Accordingly, committee chair, Senior Independent Director (SID) and the Non-Executive Director responsible for employee engagement fees are paid in addition to the NEDs’ basic fee. Committee chair fees apply only to the Audit and Remuneration Committees. The Board Chair receives no fees in addition to the Chairman’s fee. Fees may be reviewed every year, and are set  comparably sized companies and having regard to the base salary increase payable to the wider workforce. Benchmarking is typically undertaken every three years. NEDs are not eligible to participate in any performance related arrangements.  To attract NEDs who have a broad range of experience and skills to oversee the implementation of  Non-Executive Directors are entitled to receive expenses in respect of reasonable travel and accommodation costs. None. Underlying principles When determining the Directors' remuneration policy, the Committee was mindful of its obligations under Provision 40 of the UK Corporate Governance Code to ensure that the policy and other remuneration practices were clear, simple, predictable, proportionate, safeguarded the reputation of the Company and were aligned to Company culture and strategy. Set out on the following page are examples of how the Committee addressed the factors. Summary of the Directors’ remuneration policy continued Remuneration Committee report continued Clarity Remuneration arrangements should be transparent and promote effective engagement with shareholders and the workforce. In 2021, the Company invited its principal shareholders and shareholder representative groups   contacted its principal shareholders to consider various changes to remuneration practice  All UK employees are awarded Free Shares in the Company through the Share Incentive Plan (SIP). UK employees are also able to participate in a partnership and matching shares programme which also operates through the SIP. All employees with shares held in the SIP trust are able to exercise voting rights on those shares and vote on the Directors' remuneration report and the Directors' remuneration policy (when applicable) at general meetings of the Company. Further information on workforce engagement can be found on pages 86 and 87. Simplicity Remuneration structures should avoid complexity and their rationale and operation should be easy to understand. The Directors' remuneration policy has received positive feedback from stakeholders in relation to its simplicity. The Committee’s approach to performance measures had always been that they must be understandable for participants in the schemes in order to ensure they are effective. Risk Remuneration arrangements should ensure reputational and other risks from excessive rewards, and behavioural risks that can arise from target-based  and mitigated. Whilst the Committee has consciously not set an absolute annual quantum on Executive remuneration, this is something that the Committee will keep under review. The total pay of the Executive Directors is considered by the Committee as well as pay ratios with the wider workforce and shareholder returns. Predictability The range of possible values of rewards to individual directors and any other limits or discretions should  at the time of approving  The range of possible values of rewards for the Executive Directors is considered on page 125. The range of possible values of rewards for the Executive Directors was also communicated in the 2021 Remuneration Committee report when a revised Directors' remuneration policy was communicated to shareholders. The Committee has a wide range of discretion in relation to variable pay awards, new joiners,  Proportionality The link between individual awards, the delivery of strategy and the long-term performance of the company should be clear. Outcomes should not reward poor performance.  and long-term performance are working as intended and that they are delivering outcomes in line with our wider stakeholder experience.   vesting percentage for the long-term incentive share plan was 100%, which was due to the strong  good alignment of Executive Director remuneration with the long-term performance of the Group. Alignment to culture Incentive schemes should drive behaviours consistent with company purpose, values and strategy.  remuneration policy are aligned with purpose, values and strategy.    Directors and senior management. Fixed Variable 117 Howden Joinery Group Plc Annual Report & Accounts 2023 116 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title Governance In this section of the Directors’ remuneration report, we detail some of the considerations the Committee has regard to when   Director remuneration relative to average employees.  The graph below illustrates the Company’s historical PBT performance. Howdens historical PBT (£m)Howdens historical TSR Total shareholder return (TSR) The graph below illustrates the Company’s TSR performance relative to the constituents of the FTSE 350 (excluding investment trusts) of which the Company is a constituent. It shows that over the past 10 years Howdens  350 (excluding Investment Trusts). Group performance 1 See consolidated income statement on page 162.   Relative importance of spend on pay The graph below sets out the change in the Group’s total remuneration spend from 2022 to 2023 compared to  Director pay Our corporate performance and remuneration    From 2016 to 2022, the maximum bonus opportunity reduced from 200% of basic salary to 150%. In 2023, following consultation with shareholders, the maximum bonus opportunity returned to 200% of basic salary. Year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023  6,221 5,225 3,098 1,268 2,569 1,391 816 3,951 2,571 2,517 Annual bonus (% of maximum) 64% 56% 48% 35% 75% 76% 0% 100% 100% 24% LTIP vest (% of maximum) 100% 100% 100% 0% 0% 0% 1 0% 100% 43% 100% 1 Andrew Livingston was appointed as CEO in April 2018 and therefore he was not granted an award under the LTIP in 2017. Remuneration Committee report continued Directors’ remuneration report – Part 1: Company performance and stakeholder experience 250 400 450 350 300 200 100 50 0 Howdens FTSE 350 (excluding Investment Trusts) 2013 201620152014 20 17 2018 2019 2020 2021 2022 2023 50 350 300 250 100 150 200 0 400 500 700 600 300 100 200 0 Total spend on pay 23 £656.0m PBT 1 -19.3%  2 -9.6% £m Total returns to shareholders -55.0% £164.1m 23 2322 £327.6m £405.8m  Annual bonus (% of maximum) LTIP vest (% of maximum) Single Figure (£’000s) % of maximum 1,000 2,000 3,000 6,000 7,000 5,000 4,000 0 20 40 100 80 60 0 2016 2017 2019201820152014 2020 2021 2022 2023 £188.8m £219.6m £237.0m £232.2m £238.5m £260.7m £185.3m £390.3m £405.8m £327.6m 201620152014 20 17 2018 2019 2020 2021 2022 2023 22 £498.0m £452.7m 22 £624.1m £365.0m 22 23 +5.1% 150 119 Howden Joinery Group Plc Annual Report & Accounts 2023 118 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title Governance CEO pay ratio table Howdens has calculated the CEO pay ratio for 2023 in line with the Directors’ Remuneration Reporting Regulations. The data used to calculate the CEO pay ratio was accurate as at 31 December 2023. In accordance with section 17 of The Companies     statistically accurate method for identifying the pay ratios. Year Method 25th percentile pay ratio 50th percentile pay ratio 75th percentile pay ratio 2023 A 76:1 65:1 54:1 2022 A 74:1 64:1 53:1 2021 A 135:1 113:1 93:1 2020 A 31:1 25:1 21:1 2019 A 71:1 58:1 48:1 2018 A 122:1 100:1 81:1 It should be noted that the CEO did not receive any remuneration relating to long-term incentive share awards in 2019 or 2020 as he was appointed to the Board in 2018. He also did not receive any annual bonus in 2020 during which time all other employees received variable performance bonus pay. The combination of these factors resulted in a lower than anticipated CEO pay ratio in 2019 and 2020. In 2021, the CEO pay ratio increased due to the vesting in full of the 2019 long-term incentive share award. In 2022, the ratio reduced as the 2020 long-term incentive share award vested at 43% of maximum and the share price upon which the award was valued was lower than in 2021. As the total incentive payout level for 2023 performance is broadly similar to 2022, and there was no share price appreciation in relation to the 2021 LTIP vesting, the 2023 ratio represents only a slight increase from the prior year's ratio.   25th percentile 50th percentile 75th percentile  £33,278 £38,735 £46,836 Salary (including overtime) (FTE) £23,916 £28,055 £34,694  calculations we used actual pay from 1 January 2023 to 31 December 2023. Joiners, leavers and part time employees’ earnings have been annualised on an FTE basis (excluding any payments of a one-off nature). Where bonus payments are made on a  payments, we estimated the bonus due to employees for the 2023 compensation year (payment is due in March 2024). P11D values are based on the 2022/23 reportable values, however, they have been annualised accordingly. Howdens’ vertically integrated business means that our workforce is made up of a wide range of roles from kitchen designers to skilled engineers, from warehouse staff to senior management. We work on the premise that Howdens must be worthwhile  outperformance we expect from every individual. Our pay structures vary between roles to deliver an appropriate balance  to provide some alignment of reward across the business. It is a feature of our pay structure that senior management often receive a larger proportion of their total pay through incentives and the outcome of incentives is likely to be the main cause of variability in the ratio in future years. The Remuneration  and fairness are two key principles and important drivers for change. Case study Pensions at Howdens Alignment of Executive remuneration with our depot staff has always been culturally important at Howdens. This   First and foremost, Howdens should be worthwhile for   pension in 2020 (it had been closed to new members since 2012), it recognised that there was an opportunity to improve the fairness of pension provision at Howdens  Remuneration Committee also recognised that, following the decision taken in the 2019 remuneration policy to  those of the wider workforce, there was an opportunity   Retirement Savings Plan or HRSP). The resulting HRSP  Executives but also throughout the whole of Howdens. In 2023, Howdens contributed £42m towards employee pensions. This was more than any other incentive during the year. Participation in the HRSP is high with opt-out levels at 2% at the end of December 2023. One feature of the HRSP is that it enables employees to reduce their contributions below the default contribution   This has been particularly important with household incomes squeezed in recent years and means that employees can continue to increase their retirement savings without compromising their take-home pay. Employees are encouraged to contribute themselves  and are annually enrolled back on the default employee contribution but they have the option to   resulted in very low opt-out levels. At the end of December  level below the default contribution level. Employees paying more than the default employee contribution level is high at 45%, with 27% maximising their employer contribution of 12%.  62% of employees who were not automatically enrolled opted to join and 32% of those are contributing more than the default contribution level. The Remuneration Committee will continue to receive regular updates from management on participation and employee engagement with the HRSP in the coming year and continue to ensure alignment with the wider workforce and fairness remain central tenets when determining Executive pay. Remuneration Committee report continued Directors’ remuneration report – Part 1: Company performance and stakeholder experience continued 121 Howden Joinery Group Plc Annual Report & Accounts 2023 120 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title Governance Directors’ Remuneration Report – Part 2: Application of policy in 2023 In this section of the Directors’ remuneration report we set out how the Committee has executed policy for 2023. Disclosures in this section are retrospective and where applicable are shown against prior year comparator. All-Director remuneration relative to average employees Listed companies are required to disclose the annual change in each director’s pay in comparison to the average change   there is only a requirement for a listed entity to provide employee pay information for that entity (i.e. not on a group-wide basis), a ‘Group’ comparator has also been included in the table below as this provides a more representative comparison, noting that Howden Joinery Group Plc did not employ any individuals during 2019 to 2023. Footnotes have been included beneath the table in relation to the 2022 to 2023 period. Footnotes relating to prior years can be found in the previous applicable annual report. % change in Basic Salary  % change in Bonus 2022–23 2021–22 2020–21 2019–20 2022–23 2021–22 2020–21 2019–20 2022–23 2021–22 2020–21 2019–20 Average Howdens Group employee remuneration 9% 5% 1% 4% 5% (9)% (15)% 9% (18)% (4)% 38% 12% Executive Directors Andrew Livingston 1 6% 3% 12% 3% 40% 5% (85)% 84% (67)% 3% 100% (100)% Paul Hayes 6% 3% – – (6)% 80% – – (67)% 3% – – Non-Executive Directors Karen Caddick 4% 6% 3% 18% 0% 100% 0% (89)% – – – – Andrew Cripps 2 11% 6% 3% 5% 0% 0% 0% 0% – – – – Louis Eperjesi 3 – – – – – – – – – – – – Louise Fowler 0% 3% 4% 515% 25% 300% 0% 100% – – – – Peter Ventress 4 101% – – – 0% – – – – – – – Debbie White 1 0% 3% 4% 3% 600% (100)% (50)% 390% – – – – Former Directors Geoff Drabble 5 (64)% 4% 3% 22% 100% 0% 0% 0% – – – –   expectations in absolute terms. 2 Andrew Cripps was appointed Senior Independent Director in July 2023 and therefore received an additional pro-rated fee for this role in 2023. The increase shown in his fees for '2022 to 2023' is due to this change.   4 Peter Ventress was appointed to the Board in July 2022 and therefore did not receive a full year of fees until 2023. The percentage change between 2022 and   5 Geoff Drabble retired from the Board in May 2023 and therefore did not receive a full year of fees in respect of 2023. The percentage change between 2022 and   Wider workforce considerations The Remuneration Committee received updates from the interim Group HR Director in respect of average salary of an employee  and variable pay awards for the Executive Directors and senior management, the Committee had regard to the information contained in a Provision 33 Dashboard, which includes information such as the CEO pay ratio, gender pay gap statistics, and  Remuneration Committee report continued  £000s Fixed Variable Total RemunerationSalary/Fees Taxable  Pension Total Fixed Bonus LTIP Total Variable 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 Executive Directors: Andrew Livingston 710 670 28 20 85 84 823 774 334 1,004 1,360 793 1,694 1,797 2,517 2,571 Paul Hayes 464 438 34 36 56 48 554 522 218 657 889 – 1,107 657 1,661 1,179 Total 1,174 1,108 62 56 141 132 1,377 1,296 552 1,661 2,249 793 2,801 2,454 4,178 3,750 Non–Executive Directors: Karen Caddick 77 74 2 2 – – 79 76 – – – – – – 79 76 Andrew Cripps 82 74 0 0 – – 82 74 – – – – – – 82 74 Geoff Drabble Retired May 2023 27 76 1 0 – – 28 76 – – – – – – 28 76 Louis Eperjesi Appointed June 2023 36 – 0 – – – 36 – – – – – – – 36 – Louise Fowler 60 60 5 4 – – 65 64 – – – – – – 65 64 Peter Ventress Appointed July 2022 325 162 0 0 – – 325 162 – – – – – – 325 162 Debbie White 60 60 6 0 – – 66 60 – – – – – – 66 60 Total 667 506 14 6 – – 681 512 – – – – – – 681 512     Executive Directors Salary Salaries will not be changed outside of the annual review, unless there are exceptional circumstances, such as a mid-year change in role. Increases will normally be only for   derived from companies in a similar sector. Salaries for 2024 can be found on page 126. The peer group used is reviewed whenever benchmarking is performed, and the Committee applies judgement in identifying appropriate peer group constituent companies. The individual’s level of total remuneration against the market is considered at the same time.   and include receipt of a car allowance, health insurance, and  Executive Directors are entitled to receive expenses in respect of reasonable travel and accommodation costs. Pension  of pension during the year. More information about Executive  study on pensions may be found on page 121. Directors’ remuneration report – Part 1: Company performance and stakeholder experience continued Fixed Variable 36% 64% 33% 67% Fixed Variable 2022 2023 123 Howden Joinery Group Plc Annual Report & Accounts 2023 122 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title P B T 8 5 % Governance Remuneration Committee report continued Fixed elements of remuneration consist of the annual salary that the Executive Director will receive for 2024, alongside their 2024 pension entitlement, and actual  Annual bonus is based on a maximum opportunity of 200% of salary and an on-target opportunity of 100% of salary. LTIP is based on a maximum opportunity of 270% of salary for Andrew Livingston and 220% of salary for Paul Hayes. The overall policy maximum is 270% of salary. Target opportunity is calculated as 50% of maximum (135% of salary for Andrew Livingston and 110% of salary for Paul Hayes). The ‘maximum +’ includes share price appreciation of 50%. This column is calculated on the same basis as the maximum column however includes an uplift of 50% total over three years for the PSP. Directors’ remuneration report – Part 2: Application of policy in 2023 continued Annual bonus (audited) Targets Our annual bonus for 2023 was based on PBT and cash   weighted as follows (percentages are of salary): PBT component  Threshold £340m (17%) £407m (3%) Target £350m (85%) £419m (15%) Outperformance £389m (170%) £431m (30%) 70% of any annual bonus is paid in cash and 30% is deferred as shares, which vest two years following the deferral date (subject to continued employment). Outcomes for the year  is £340m. As explained in the Chair's annual statement, the Committee applied judgment in reviewing whether the PBT outcome was appropriate taking into account all relevant factors, and it determined that it would be appropriate to exercise discretion to reduce the outcome for the PBT component to threshold performance. The  was £452.7m. In aggregate, the Executive Directors will receive an annual bonus of 47% of salary for 2023, which is equivalent to 24% of the maximum bonus opportunity. 30% of the bonus will be deferred into Company shares for two years. Andrew Livingston Paul Hayes PBT (% of salary) 17% 17% Cash Flow (% of salary) 30% 30% Total Bonus (% of salary) 47% 47% Total Bonus (£'000) 334 218 Opportunity (% of salary)Opportunity (% of salary) Target reachedTarget reached Target not reachedTarget not reached Performance Share Plan (PSP) (audited) Targets The 2021 PSP award is measured against PBT growth and relative total shareholder returns (TSR) over a three-year  under the PSP award are subject to a two-year post-vest holding period for serving Executive Directors. Outcomes for the year 67% of the 2021 PSP award was based on a PBT growth threshold requirement of 5% p.a. and a maximum requirement of 15% p.a. At the threshold requirement, 15% of the PBT growth component of the award would vest. The PBT for 2023, calculated on an unadjusted basis,  p.a. This component of the award will vest at 100% of maximum opportunity. 33% of the 2021 PSP award was based on a relative TSR measure. The threshold vesting for the TSR component of the award was where the Company was ranked 'median' compared to the comparator group of companies. The maximum vesting was where the Company ranked 'at or above upper quartile'. At threshold, 15% of the TSR  2023, the Company was ranked 'upper quartile' compared to the comparator group and therefore 100% of the TSR component of the award will vest.  of the maximum opportunity. The share price at the date of grant was 745.4p and the three month average to 30 December 2023, the price on which the value of the award is calculated, was 708.9p. Therefore, none of the  attributable to share price appreciation. Directors’ remuneration report – Part 3: Implementation of policy in 2024 In this section of the Directors’ remuneration report we set out how the Committee has implemented policy for 2024. Disclosures in this section are forward looking. The outcome of any variable award for Executive Directors will be reported  2024 remuneration scenarios    supports the Company’s strategic ambitions and does not incentivise inappropriate risk-taking. The Committee reviews this on an annual basis. The composition and value of the Executive Directors’ remuneration packages in a range of performance scenarios are set out in the charts below. These show that the proportion of the package delivered through long-term performance is in line with our  the achievement of superior long-term performance and aligns the interests of the Executive Directors with those of other shareholders. A brief description of each remuneration scenario is set out beneath the charts.  continued Fixed Variable Paul HayesAndrew Livingston Value of package £’000 2,000 2,5001,500 3,001 5,108 4,150 2,305 815 2,491 1,400 542 1,000500 Fixed elements of remuneration Annual bonus LTIP LTIP (attributable to 50% share price appreciation) 0 Maximum Maximum + On-target Minimum £’000 4,000 6,0005,0003,0002,0001,0000 Maximum Maximum + On-target Minimum 3,5003,000 T S R P B T g r o w t h 3 3 % 6 7 % 6 7 % PSP outcome 3 3 % 6 7 % C a s h F l o w 1 5 % 16% 20% 35% 100% 28% 34% 23% 42% 37% 46% 19% 18% 39% 22% 100% 31% 37% 25% 37% 33% 41% 17% 7 6 . 5 % 1 5 % Annual bonus outcome 8 . 5 % 125 Howden Joinery Group Plc Annual Report & Accounts 2023 124 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title Governance Remuneration Committee report continued Directors’ remuneration report – Part 3: Implementation of policy in 2024 continued Performance Share Plan (PSP) measures Set out below are the performance measures and relative weightings for each of the measures. Further detail about the  Annual Report and Accounts. The maximum opportunity under the PSP is 270% of base salary for Andrew Livingston (CEO)  years. See page 130 for scheme interests awarded in 2023. Under the terms of the Directors' remuneration policy approved by shareholders at the 2022 AGM, the 2024 PSP awards will be subject to a two-year post-vesting holding period. PBT – 60% weighting PBT component vesting schedule PBT performance condition Payout level £420m 100% of maximum Straight-line vesting between these points £340m 15% of maximum Less than £340m 0% of maximum Relative TSR – 20% weighting Comparator group and averaging period for TSR performance • Companies ranked up to 50 above and 50 below Howdens by market capitalisation in the FTSE All Share index  •   Performance assessment Performance against comparator group Payout level Equal to or above upper quartile 100% of maximum Straight-line vesting between these points Equal to median 15% of maximum Below median 0% of maximum Return on Capital Employed (ROCE) – 10% weighting ROCE component measurement details  expressed as a percentage. The capital employed will include investments in assets, working capital and related    Performance assessment ROCE performance condition Payout level 28% 100% of maximum Straight-line vesting between these points 23% 15% of maximum Less than 23% 0% of maximum Environmental measure – 10% weighting Environmental component measurement details All carbon emission and waste targets to be achieved by 31 December 2026. Base year for all targets is 2021. Performance condition Payout level Improving our carbon intensity ratio  Scopes 1 and 2 carbon emissions reduction, based on tCO 2 e per £m 4.2% p.a. reduction 50% of maximum Straight-line vesting between these points 4.0% p.a. reduction 7.5% of maximum Below 4.0% p.a. reduction 0% of maximum Fleet emissions reduction  CO 2 KG/km 15% reduction 50% of maximum Straight-line vesting between these points 12% reduction 7.5% of maximum Below 12% reduction 0% of maximum   Non-Executive Director fees Current fee levels for Non-Executive Directors are set out in the table below. They will next be reviewed during 2024 with any increase taking effect from 1 April 2024. Basic NED fee 1 Chair fee SID fee NED Responsible for Workforce Engagement fee Committee Chair fee 2024 Annual Fee £60,250 £325,000 £10,600 N/A £17,000 Effective date Until 31 March 2024 2023 Annual Fee £60,250 £325,000 £10,600 £5,400 £17,000 Effective date 1 January 2023 1 The Chair of the Board of Directors does not receive the basic Non-Executive Director fee or an additional fee for chairing the Nominations and Sustainability Committees. Executive Director base salaries Executive Directors' base salary increases from 1 April 2024 are set out in the table below. The rationale for the increases may be found in the Annual Remuneration Committee Chair statement on page 110. For 2024, salary increases for the wider workforce will be, on average across the Group, 3% of salary. Executive Directors 2024 2023 Salary (£'000) Effective date Salary (£'000) Effective date Andrew Livingston 731 1 April 2024 710 1 January 2023 Paul Hayes 478 1 April 2024 464 1 January 2023 Annual bonus measures The table below sets out annual bonus measures for 2024. Targets for these measures are considered commercially sensitive by the Board and so are not disclosed here. Performance targets, together with achievement against them, will be set out in full in the 2024 Remuneration Committee report. Bonus measure  Performance level Pay out level PBT  Threshold Target Maximum 17% of salary 85% of salary 170% of salary Cash Flow   adjusted for exceptional items Threshold Target Maximum 3% of salary 15% of salary 30% of salary Fixed Variable 127 Howden Joinery Group Plc Annual Report & Accounts 2023 126 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title Governance Remuneration Committee report continued In this section of the Directors' remuneration report, more detail is provided in respect of a number of key disclosures. These disclosures include Executive Director pension entitlements, shareholdings, external appointments and contractual arrangements. More detail is also provided on the operation of the Remuneration Committee and AGM voting performance. Consideration by the Directors of matters relating to Directors’ remuneration  of reference, which are reviewed on an annual basis, the Committee is responsible for determining the broad policy and  Committee, the Company Secretary and the Head of Internal Audit and Risk), including pension rights and, where applicable, any compensation payments. The Committee is also regularly updated on pay and conditions applying to other employees  Service contracts and letters of appointment    be paid monthly for a maximum of twelve months. Such payments will be equivalent to the monthly salary that the Executive Director would have received if still in employment with the Company. Executive Directors will be expected to mitigate their loss within a twelve month period of their departure from the Company. In their service contracts, Executive Directors have the following remuneration-related contractual provisions: • Receipt of a salary, which is subject to annual review. • Receipt of a car allowance. • Health insurance and death-in-service insurance payable by the Group. • Eligibility to participate in any bonus scheme or arrangement which the Company may operate from time to time, subject to the plan’s rules. • Participation in the Company’s pension plan. Non-Executive Director appointments are for an initial period of three years. They are subject to re-appointment annually at the Annual General Meeting in accordance with the UK Corporate Governance Code. Non-Executive Directors are not entitled to any form of compensation in the event of early termination for whatever reason. Copies of the Directors’ service contracts and    External appointments It is recognised that Executive Directors may be invited to become non-executive directors of other companies and that  Directors and other appropriate senior employees to accept a maximum of one external non-executive appointment outside the Company, subject to permission from the Committee, provided this is not with a competing company nor likely to lead to  Andrew received £58,687 in fees in respect of his role as Non-Executive Director. Andrew held this position upon appointment. Paul Hayes does not have any external appointments. Executive Directors may retain the fees paid to them in respect of their non-executive duties. Directors’ remuneration report – Part 4: Additional disclosures Total pension entitlements (audited) Executive Directors are invited to participate in the Howdens Retirement Savings Plan (the 'Plan') or receive an amount in lieu of membership of the Plan. More information on pension entitlements for Executive Directors can be found on pages 111 and 115 and in the Directors' remuneration policy at www.howdenjoinerygroupplc.com/governance/remuneration-policy. The table below sets out the payments made in lieu of membership of the Plan for the Executive Directors who served during the year.  Executive Directors Andrew Livingston Paul Hayes Accrued pension at 30 December 2023 (£'000) – – Normal retirement date – –  – –  – – Pension value in the year from cash allowance (£'000) 85 56 Total 85 56 Director shareholdings (audited) In order that their interests are aligned with those of shareholders, Executive Directors are expected to build up and maintain  unvested Performance Share Plan awards and those held subject to deferral conditions. Neither of the Executive Directors held share options that were subject to performance conditions or held share options that were vested but unexercised. Current Executive Directors Andrew Livingston Paul Hayes Shareholding requirement (% of salary) 200% 200% Shareholding requirement (number of shares) 1 200,226 130,907 Shares owned outright (including by connected persons) 2,5 387,863 23,694 Current shareholding (% of salary)¹ 387% 36% Guideline met  N Unvested deferred bonus shares 42,968 28,094 Share awards subject only to continued employment 3 181 153 Share awards subject to performance conditions and continued employment 4 714,669 403,978 1 Based on a share price of £7.089, being the three-month average price to 30 December 2023, and basic salary as at 30 December 2023. This is calculated by using only those shares owned outright by the Executive Directors and their connected persons at 30 December 2023 and the Executive Director’s salary at  2 Includes Share Incentive Plan (SIP) partnership and dividend shares. 3 Includes only SIP free and matching shares. 4 Performance Share Plan awards under the Long-Term Incentive Plan. 5 Between 30 December 2023 (the end of the period) and 28 February 2024, Andrew Livingston has acquired 38 SIP Partnership Shares. No other changes to the Executive Directors' total shareholdings (including any holdings of their connected persons) have occurred between the end of the period and 28 February 2024. Non-Executive Director shareholdings (audited)  by connected persons. With the exception of Debbie White and Geoff Drabble, who were not members of the Board as at  1   Non-Executive Director Karen Caddick Andrew Cripps Geoff Drabble 1 Louis Eperjesi Louise Fowler Peter Ventress Debbie White 1 Shareholding: 6,000 7,500 3,000 3,100 470 20,316 4,562 1 Geoff Drabble retired from the Board on 4 May 2023 and Debbie White retired from the Board on 30 December 2023. Their respective reported shareholdings are therefore given as at the date they each retired from the Board. Fixed Variable 129 Howden Joinery Group Plc Annual Report & Accounts 2023 128 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title Governance Remuneration Committee report continued  During 2023, the Executive Directors were invited to participate in the Performance Share Plan (PSP) and Share Incentive Plan  note 23 beginning on page 199: Nature of award: Conditional Shares under the PSP CEO CFO Number of shares under award: 288,310 153,601 Face value of award 1 : £1,916,108 £1,020,832 Performance Period Grant Date Vest Date Additional Holding Period See individual Performance Conditions below 6 April 2023 6 April 2026 Two years Performance Conditions:  vesting schedule (60% weighting) Performance Period:  PBT at end of Performance Period Proportion of PBT component of Award that may vest £484m 100% Straight line vesting between these two points £400m 15% Less than £400m 0% Relative Total Shareholder Returns (TSR) vesting schedule (20% weighting) Performance Period:  Howdens' rank versus comparator group Proportion of TSR component of Award that may vest At or above upper quartile 100% Straight line vesting between these two points At median 15% Below median 0% Return on Capital Employed (ROCE) vesting schedule (10% weighting) Performance Period:  ROCE achieved Proportion of ROCE component of Award that may vest 30% 100% Straight line vesting between these two points 25% 15% Less than 25% 0% Environmental measure (EM) vesting schedule (10% weighting) Performance Period: All carbon emission and waste targets to be achieved by 31 December 2025. Base year for all targets is 2021. Improving our carbon intensity ratio Fleet emissions reduction Carbon neutral status of manufacturing sites Waste avoiding  Per annum reduction Proportion of EM that may vest Reduction Proportion of EM that may vest Number of sites Proportion of EM that may vest A target of a minimum average over three years of  across UK operations will apply which, if not achieved, will result in  the outcome under this Environmental measure. 4.2% 33.3% 15% 33.3% Four 33.3% Straight-line vesting between these points Straight-line vesting between these points Straight-line vesting between these points 4.0% 7.5% 12% 7.5% Below 4.0% 0% Below 12% 0% Two 0% 1 Based on a share price of £6.646, being the closing price on 5 April 2023. Nature of award: Free and Matching Shares under the SIP 1 Award type Award date Vest date Number of shares under award Award price 2 Face value of award 2 CEO Matching Shares 19 May 2023 19 May 2026 7 £6.880 £48.16 Matching Shares 19 Jun 2023 19 Jun 2026 7 £6.832 £47.82 Matching Shares 19 Jul 2023 19 Jul 2026 7 £6.798 £47.59 Matching Shares 18 Aug 2023 18 Aug 2026 6 £7.392 £44.35 Free Shares 29 Aug 2023 29 Aug 2026 35 £7.030 £246.05 CFO Free Shares 29 Aug 2023 29 Aug 2026 35 £7.030 £246.05   during which time the participant must remain employed by a UK Howdens Group company to avoid forfeiting the award. 2 The face value of the award is calculated using the share price at grant (the 'Award price'). Directors’ remuneration report – Part 4: Additional disclosures continued Advisors to the Committee The Committee regularly consults with the CEO, CFO and the Interim Group HR Director on matters concerning remuneration, although they are never present when their own reward is under discussion. The Company Chair attends the Remuneration Committee by invitation except when his own remuneration is determined. The Company Secretary acts as secretary to the Committee but is never present when his own reward is determined. The Committee also has access to detailed external information and research on market data and trends from independent consultants. A representative from the Committee's independent advisor usually attends each meeting of the Remuneration Committee. Korn Ferry was appointed by the Committee as its retained independent advisor in September 2022. Korn Ferry is a member of the Remuneration Consultants’ Group, which operates a code of conduct in relation to executive remuneration consulting, and it does not provide any other services to the Group.  year for the Committee included updating the Committee on trends in compensation and governance matters and advising the Committee in connection with benchmarking of the total reward packages for the Executive Directors and other senior members of staff. Total fees paid to Korn Ferry in relation to remuneration services provided to the Committee totalled £77,388 with fee levels based on the quantity and complexity of work undertaken. Voting at the 2023 AGM The results of the advisory vote in respect of the Directors’ remuneration report ('Report') at the 2023 AGM is shown in the chart below. The 2021 AGM results and the 2022 AGM results (which included a binding vote on the Directors’ remuneration policy ('Policy')) are also shown in the chart below. By order of the Board Karen Caddick Remuneration Committee Chair 28 February 2024 Fixed Variable 2022 Report Policy For 90.72% For 90.67% Against 9.28% Against 9.33% Withheld 2 55,715 Withheld 2 3,928,507 AGM voting outcomes For¹ Against 1 A vote 'for' includes those votes giving the Chair discretion. 2 A vote 'withheld' is not a vote in law. 2021 2023 For 95.36% For 86.06% Against 4.64% Against 13.94% Withheld 2 147,941 Withheld 2 2,392,924 Report Report 131 Howden Joinery Group Plc Annual Report & Accounts 2023 130 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title GovernanceGovernance Introduction from the Audit Committee Chair I am pleased to present this report covering the work of the Audit Committee.  late. There have been differences in opinion as to whether the UK Corporate Governance Code should focus on promoting  jurisdictions, or as has happened, on broader operational controls over the whole business. Over the last several years Howdens has been working hard to enhance controls on a number of fronts. This year's progress includes improving   The Committee has been overseeing these activities closely and providing appropriate support. Next steps will include identifying which of the large number of controls are most  that reporting is appropriately prioritised. The Committee has also been encouraging the Company’s  already had a strong foundation, as is appropriate in the current economic climate. We have included a case study in this report on the Audit Committee’s role in overseeing the controls that mitigate our cyber and information security risk, one of our principal risks. The case study can be found on page 136. Receiving updates from management and the security team has become a regular feature of the Committee as the Company adapts to this increasing and evolving risk. I hope that the case study provides some insight into the Committee’s level of oversight and some of the important work we consider. The Audit Committee also continued its programme of inviting  business. In April 2023, we received an update from the Supply Operations Finance Director. The Committee were able to gain valuable insight into not just Supply Operations'  investment plan. The annual update from the Head of   safety, inventory management, and fraud. The HR Director presented to the Committee on the evolution of HR controls  These updates from operational management are vital   The Committee received updates on compliance in our French business and we have invited the Finance Director in France to present to the Committee in 2024. The Committee also undertook its regular governance reviews, reviewing external  the effectiveness of the external audit process. Audit Committee report 2023 Audit Committee activity AGM • The re-appointment of KPMG LLP as the external auditor and authority for the Directors to determine the auditor’s remuneration were approved by shareholders Committee meeting • Cyber security update • Internal audit report • Effectiveness of the external auditor and audit processes • 2023 external  • Supply Operations Finance Director update • Discussion with Head of Internal Audit (without management present) Committee meeting •  including going concern considerations • External auditor Half  • Key controls and Half  update • Internal audit report •  review • Discussion with external auditor (without management present) Committee meeting • Cyber security update • Internal audit report • HR controls update • Depot compliance update • 2023 Annual Report timetable • Lead audit partner succession • Key controls and fraud controls • Annual review of risk and control framework • Discussion with Head of Internal Audit (without management present) Committee meeting • 2022 draft Annual Report and Accounts  Announcement • External audit report • External audit policies • Internal audit report • Key controls • Audit Committee effectiveness • Discussion with external auditor (without management present) Committee meeting •  • External Audit update • Key controls: year end assurance April September May Our external reporting continued to receive external accolades and we were particularly pleased that the Corporate and Financial Awards commended Howdens on its authentic communication that was aligned with our culture. As I stated in last year’s report, receiving external recognition is gratifying, and in some respects reassuring, but the Audit Committee recognises the primary importance of maintaining  gives our stakeholders. The Committee is committed to   Robert Brent, our audit partner, is retiring at the end of this audit cycle. I would like to take this opportunity to thank Robert for his efforts and for overseeing the transition from Deloitte to KPMG. We look forward to working with our new audit partner, Kamran Walji, who shadowed Robert through this year’s audit. I also look forward to answering any questions on the work of the Audit Committee from shareholders at our AGM. Andrew Cripps Audit Committee Chair Committee meeting • External audit plan update • Internal audit charter • Internal audit report • 2024 Internal audit plan and budget • Key controls and fraud controls • Terms of reference review • 2024 Audit Committee calendar November 2023 meeting attendance Andrew Cripps (6/6) Karen Caddick (5/6) 1 Geoff Drabble (3/3) Louis Eperjesi (3/3) Louise Fowler (6/6) Debbie White (6/6) Key activities in the year ahead • Review of the Annual Report and Accounts  • Review of Audit Committee effectiveness. • KPMG’s reappointment as auditor to be recommended to shareholders at the Annual General Meeting (AGM). • Review of the 2024 interim results. • Consideration of internal audit’s annual plan,  • Review of key controls. • Approval of the 2025 Audit Committee calendar. Andrew Cripps Audit Committee Chair 1 Karen was unable to attend the November Committee meeting due to illness. February January July 133 Howden Joinery Group Plc Annual Report & Accounts 2023 132 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Audit Committee reportGovernance GovernancePage Title Page Title Governance Financial reporting Results review The Audit Committee reviewed the Group’s 2023 Annual Report and Accounts published in March 2023 and the half-  As part of these reviews, the Committee scrutinised papers  judgement, the Group's key risks, going concern considerations and longer-term viability. The Committee also discussed reports from KPMG on their audit of the Annual Report and  The Committee considered whether the Annual Report and Accounts were fair, balanced and understandable and contained the information necessary for shareholders to assess the Company’s position, performance, business model, and strategy.  The Committee received the results of management's key control assessments prepared by Group and Divisional management half yearly as well as a report from the Head of Internal Audit and Risk on the scope of those controls and adequacy of evidence retained. The effectiveness of the  to controls in place on a divisional basis) and the disclosures made in the Annual Report and Accounts on this matter were reviewed by the Audit Committee. The Committee also debated regular updates in respect of the wider key controls programme during the year. More information on the key controls programme can be found   The Committee exercises its judgement in deciding the areas  external auditor's report details the results of their procedures in relation to these areas to the Committee. The matters shown below have been discussed with the Chief  auditor. The Committee has challenged the underlying  and adequately addressed by the Executive Committee, appropriately tested, and reviewed by the external auditor, and the disclosures made in the 2023 Annual Report and Accounts are appropriate.  Inventory obsolescence provisioning  Inventory obsolescence provisioning The Group’s in-stock model (further information about which can be found in the Strategic report beginning on page 2) and the scale of our product range necessitates tight management of inventory to ensure local availability of stock while at the same time minimising obsolescence and wastage. In 2023, management continued to take a strategic position on stock holding. The Committee reviewed management's conclusions on stock valuation and provisioning. The external auditor provided reports to the Committee which considered the appropriateness of provisions held against the carrying value of inventory, while also having regard to the age of discontinued lines and volumes of continuing lines relative to the expected usage and the levels of historical write-offs. The Committee considered the processes used to value each category of inventory, including the assumptions  judgements made. Actuarial valuation of pension fund liabilities As part of the triennial actuarial valuation of the pension plan, changes were made to demographic assumptions, including those for mortality assumptions. The methodology for all other assumptions remained the same. The Committee met with the Company's actuaries and carefully reviewed their report, concluding that: • the actuarial assumptions applied to pension fund   • they concurred with the views of the external auditors. Other key judgements Valuation of pension fund assets The Audit Committee also considered processes to value pension fund assets. At 30 December 2023, 57% of total pension fund assets (2022: 76%) were assets for which there is no observable market value (see note 22 on page 195). Some of the asset valuations required judgement because manager valuations at the balance sheet date were not  report. To minimise the risk that the valuations were not in line with assumptions, the asset managers were contacted to check for indicators of impairment or expected impairments,   in fund composition which would lead them to think that there had been any impairment since the most recent valuation date. The Committee concurred with the approach taken. Audit Committee report continued Governance Governance updates Updates on the latest governance practices for audit committees and changes in reporting requirements were reviewed with the external auditor. This included the FRC's minimum standard guidance for audit committees' oversight responsibilities for the external audit. In addition to other resources, members of the Audit Committee are members of the KPMG Board Leadership Centre and other bodies, which  During the year, the Committee received regular updates on the proposed corporate governance reforms. This included the withdrawal of proposed secondary legislation  ‘Restoring trust in audit and corporate governance’ in October and the publication of the updated UK Corporate Governance Code 2024 by the FRC in January 2024. External audit and internal controls remain live topics and the Committee will continue to monitor any proposed audit or wider corporate governance reforms. Committee effectiveness An effectiveness review was carried out on the Committee and its members as part of the wider internal Board evaluation process. The review concluded that the current mix of  Audit Committee, and that of its advisors, was such that the Committee could effectively exercise its responsibilities to the Group in relation to risk and controls.  The Committee reviewed its policies in relation to allocation of non-audit work (further detail on this policy may be found   interest register. Further information about the Committee's   Competition and Markets Authority Order     Audit Committees and the External Audit: Minimum Standard (the 'Minimum Standard') Since the introduction of the FRC's Minimum Standard in May 2023, and in undertaking its role and responsibilities during the year, the Audit Committee has complied with the Minimum Standard throughout the year. Committee membership Independence is critical for fair assessment of the management team and the external and internal audit functions. The Committee is composed entirely of independent Non-Executive Directors. Committee Chair Andrew Cripps was appointed Audit Committee Chair in May 2016. He is responsible for determining the Committee’s agenda and for maintaining the key relationships between the Group’s senior management, Head of Internal Audit and Risk, the Company Secretary and senior representatives of the external auditor. He is also responsible for ensuring that  timely manner and that they are reported to shareholders in the Annual Report.   has held executive director roles in the UK and Europe with Rothmans International, where he was Corporate Finance Director. More recently, Andrew has been Audit Committee Chair of a number of FTSE 250 and other public companies. Competence relevant to the sector The unique business model of Howdens means it does not  undertook an assessment of its skills and experience it assessed them against a number of sectors relevant to the Company. These included building and construction, multi- site wholesale, manufacturing and logistics, and service  The Committee concluded that competence relevant to these sectors was well represented within the current membership. Thorough inductions are provided to the Committee members and opportunities to meet with senior management and Executives further enhance their working knowledge of the way the Company operates. 135 Howden Joinery Group Plc Annual Report & Accounts 2023 134 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title Governance Case study Cyber Security and Information Security Risk Governance As is the case for the majority of companies, cyber security is treated as one of Howdens’ principal risks (see page 40). Howdens’ systems are fundamental to the day- to-day secure running of the business and the Board has set a very low risk appetite for cyber security risk. As such, one of the key roles of the Audit Committee during the annual cycle is to evaluate updates from management on the threat landscape and the actions take to mitigate this risk as far as possible. The Audit Committee received two updates on cyber and information security during 2023 (at the April and  Director of Infrastructure and Service Delivery, and Head of Information Security. The security team updated the Committee at its meeting in April on progress to date against strategic deliverables. These included an update on cyber security strategy and control governance, progress towards securing the ISO27001 Information Security Management standard and aligning to the IEC62443 Cyber Security in Operational Technology standard. The Committee were also briefed on the successful implementation of multi- factor authentication which had been introduced for all remote users and the outcome of simulated phishing exercises that had been undertaken involving over 11,000 employees. Details of a full cyber crisis management simulation (conducted during the year) with the Group Crisis Management teams were also considered. The September meeting was provided with further updates on the strategic roadmap activities (control governance, phishing exercises and user awareness) and also a review of the transition of the French server infrastructure to the UK datacentre. At both meetings, the Audit Committee considered a publicly available security scorecard, which is an independent benchmark of the Company’s external website. This data provides useful insight into the external security of howdens.com which was visited c.20 million times in 2023. The Committee will continue to receive updates on cyber and information security in 2024, including on progress towards control governance standards and initiatives to reinforce cyber security culture at Howdens. Audit Committee report continued External auditor independence Auditor independence is an essential part of the audit framework and the assurance it provides. The Committee therefore undertook a comprehensive review of auditor independence prior to appointment and during 2023,  • A review of the independence of the external auditor and the arrangements which they have in place to restrict,  • A review of the changes in key external audit staff for the current year and the arrangements for the day-to-day management of the audit relationship. • Consideration of the overall extent of non-audit services provided by the external auditor, in addition to case-by- case approval of the provision of non-audit services  • Deliberation of the likelihood of a withdrawal of the auditor from the market and note taken of the fact that there are no contractual obligations to restrict the choice of   that they had complied with the requirements of the FRC Ethical Standard as well as internal requirements and their independence and objectivity had been maintained. The Audit Committee also has a policy in relation to the employment of former members of the external audit team. External auditor effectiveness To assess the effectiveness of the external auditor,  • The proposed plan of work presented by the external auditor, including audit risks, materiality, terms of engagement and fees prior to commencement of the  •  and any variations from the plan. • Evaluation from key management personnel and members of the Committee of the external auditor’s exercise of professional scepticism and challenge. • Robustness and perceptiveness of the auditor in their handling of the key accounting and audit judgements. • Internal control and risk content of the external  •  The Lead Audit Partner also met with all members of the   The Committee concluded that the external auditor remained effective and audit quality remained high. Performance expectations for the external auditor  • Discuss the audit plan, materiality, and areas of focus in advance. • Report issues at all levels within the Company in a timely fashion. • Ensure clarity of roles and responsibilities between local KPMG and Howdens’ Finance teams. • Respond to any issues raised by management on a timely basis. • Meet agreed deadlines. • Provide continuity and succession planning of key staff members of KPMG. •  draft auditor's reports and respond to requests  • Ensure consistent communication between local and central audit teams. Wider responsibilities • Provide timely up-to-date knowledge of technical and governance issues. • Serve as an industry resource, communicating best practice trends in reporting. • Adhere to all independence policies. • Deliver a focused and consistent audit approach  materiality. • Liaise with the Howdens Internal Audit and Risk team to avoid duplication of work. • Provide consistency in advice at all levels. • Ultimately, provide a high-quality service to the Board, be scrupulous in their scrutiny of the Group and act with utmost integrity. Independence The Committee reviews the independence of the external auditor bi-annually. This includes  as well as the auditor's internal procedures to ensure independence of its staff. External auditor 1 External auditor KPMG LLP ('KPMG') External auditor appointed 12 May 2022 Lead audit partner Robert Brent 2 Lead audit partner tenure  Total fees paid to the auditor in the year £1.4m (audit related assurance services accounted for £0.1m of the total fee) 1 The information above is correct as at 30 December 2023. 2 Robert Brent will be retiring following the completion of the 2023 audit. He will be succeeded as lead audit partner by Kamran Walji. External audit tender Following a comprehensive external audit tender process, the Board recommended KPMG's appointment to its shareholders at the 2022 AGM and shareholders approved the appointment with 98.8% of votes in favour. The Board recommended KPMG's re-appointment to shareholders at the 2023 AGM and shareholders approved the re-appointment with 98.9% of votes in favour. The Board will once again recommend KPMG's re-appointment to shareholders at the 2024 AGM. 137 Howden Joinery Group Plc Annual Report & Accounts 2023 136 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title Governance Audit Committee report continued Controls and internal audit Internal control framework The Group has an established framework of internal controls, which includes the following key elements: • The Board approves the Group’s strategy and annual  performance within these. • The Group and its subsidiaries operate control procedures designed to ensure complete and accurate accounting  assets or fraud. • The Audit Committee meets regularly and its responsibilities are set out in the Audit Committee Terms of Reference (which can be found on the Company’s website at www.howdenjoinerygroupplc.com/governance/ corporate-governance-report/terms-of-reference-of-the- audit-committee). It receives reports from the Internal Audit function on the results of work carried out under an annually agreed audit programme. Operational and compliance controls are considered when the Committee reviews the annual Internal Audit programme. The Audit Committee has full and unfettered access to the internal and external auditors. •   aligned with principal risks. These include IT and cyber controls, supplier management, ESG, health & safety and data protection as well as other operational areas. These controls are cyclically tested by Internal Audit to ensure they remain effective and are being consistently applied. • The Audit Committee annually assesses the effectiveness of the assurance provided by the internal and external auditors. Key Controls As previously reported, management have challenged and reviewed key controls across the business to focus and further strengthen our overall control framework. Sponsored by the CEO and CFO, and reporting regularly to the Audit Committee, this work is improving our capability over our operational, IT  risks and evidence their effective implementation. Good progress continued throughout 2023 with regular updates being provided to the Audit Committee. Internal project management and governance frameworks were determined to be working effectively and the Committee was  The Committee remains committed to the activities to strengthen the control environment across the business. External auditor fees All relevant fees proposed by the external auditor must be reported to and approved by the Audit Committee. Details of external audit fees may be found in the table on page 136 and  Policy for non-audit services provided by  The main aims of this policy are to: • Ensure the independence of the auditor in performing  •  of work that the auditor can and cannot undertake. The Audit Committee has reviewed the policy for non-audit services to ensure that it is in line with the FRC’s Revised Ethical Standards 2019 (which took effect from 15 March 2020) and the FRC’s Audit Quality Practice Aid 2019. The policy, in line with regulation, substantially limits the non- audit services which can be provided by the external auditor. The policy provides: • A 70% cap of the value of the audit fee for all non-audit services calculated on a rolling three-year basis. • Categories of service that are prohibited from being carried out by the auditor.  non-audit work that the auditor may be engaged in without  considers each referral on a case-by-case basis. The policy ensures that the auditor does not audit its own work or make management decisions for the Company or any of its  agreement of fees payable for non-audit work. No non-audit services, apart from interim review services, were provided by KPMG during the year. Internal audit The Internal Audit team has continued to develop its capabilities during the year. Building on the development of data analytics and systemisation of controls, members of he team also undertook ISO-accredited lead auditor training and achieved Chartered IIA status, or equivalent. An updated Internal Audit Charter has been approved by the Committee and communicated to management, thereby refreshing understanding of responsibilities for internal  defence model. The Committee reviewed and challenged: • Internal Audit’s programme of work and resources and approved its annual plan and budget. • The level and nature of assurance activity performed by Internal Audit. •  the adequacy and timeliness of management’s response. •  Independent assurance The Committee assessed the coverage of independent assurance by reviewing the annual internal audit plan against the Group’s key controls. Internal audit effectiveness The Committee considered that the Internal Audit function remained effective and provided a comprehensive level of assurance through its programme of work. The Internal Audit team continues to comply with the IPPF. These standards set out the expectations of the Global Institute of Internal Auditors (IIA) for best practice. In Q4 2023 the IIA announced revised Global IIA Standards which become mandatory in 2025. The Internal Audit team has revised working practices and is now aligned with these new standards in advance of mandatory implementation. The Audit Committee has commissioned an external  to assess the performance and effectiveness of the Internal Audit department. In 2021, the Audit Committee commissioned an external quality assessment (EQA) readiness assessment, provided by the IIA. An EQA evaluates conformance with the International Professional Practices Framework (IPPF) outlined above. The readiness assessment concluded that the function’s  to meet the requirements of a full EQA. No areas reviewed were considered to be of concern, although a small number of best practice improvement recommendations were made and have been implemented. The next effectiveness review will be considered in 2025,  outlined above. Fraud risk The Committee considered the controls in place to mitigate fraud risk and received a report from Internal Audit   Committee report, is now complete. There will be further testing and assessments undertaken during 2024 to ensure that the Group is in line with best practice. Cyber and information security risk The risk of a cyber security incident is considered to be one of the Group’s principal risks. A case study on cyber and information security can be found on page 136.  during the year and there have been no such breaches during the preceding three-year period. Divisional controls Senior management from the business are invited to discuss the controls in their business areas. The Supply Operations Finance Director and the Head of Compliance for the Trade division gave presentations on the key risks and control environments in their area. In September, the HR Director also presented to the Committee. Whistleblowing Complaints on accounting, risk issues, internal controls, auditing issues and related matters are reported to the Audit Committee as appropriate. Oversight of the Company’s whistleblowing policy is a matter considered by the Board. The Board receives biannual updates on whistleblowing statistics and trends (see pages 78 and 79).  The Companies Act 2006 places a duty upon Directors to ensure that they do not, without the Company’s prior consent,   and either their personal interests or other duties they owe to a third party. If any Director becomes aware that they, or any party connected to them, have an interest in an existing or proposed transaction with the Company, they must notify the Board as soon as practicable. The Board has the authority to  in the best interests of the Company. The Audit Committee reviews the output of this process annually to ensure it is  By order of the Board Andrew Cripps Audit Committee Chair 28 February 2024 139 Howden Joinery Group Plc Annual Report & Accounts 2023 138 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page Title GovernanceGovernance Introduction from the Sustainability Committee Chair Having a sustainable business is a strategic priority for the Howdens Board and the reference to our work in this area can be found in almost all other parts of this Annual Report, from the CEO statement to the Governance reports. It is central to everything we do and the Sustainability Committee, now in its fourth year, helps to ensure that it is given as much of the Board’s time and attention as our other business priorities.  greenhouse gas emission targets had been validated by SBTi (the Science Based Targets initiative) with SBTi classifying Howdens’ scope 1 and 2 target ambition as in line with a 1.5°C trajectory. Validated targets include to reduce absolute scope 1 and 2 GHG emissions 42% by 2030 and our scope 3 supply chain emissions by 25% by 2030 from a 2021 base year, and to increase sourcing of renewable electricity from 30% in 2021 to 100% by 2027. The Committee will regularly monitor progress against these targets in the coming years. Sustainability in our workforce was also a key focus for the Committee during the year and we have detailed some of our key activities later in the report. I was pleased that the Remuneration Committee introduced environmental remuneration measures for the Executive long-term incentive  them to build on these further in the future. Many of the items considered and approved at the Sustainability Committee are considered in detail in the sustainability matters report (which begins on page 42), part of the strategic report, so this Committee report is necessarily shorter than other Committee reports to avoid duplication. However, it is important to detail the role, remit, and responsibilities of the Committee, to highlight some of the key work of the Committee during the year, and to consider the work of the Committee in the year ahead. Role, remit and responsibilities The primary purpose of the Howdens Sustainability Committee is to assist the Board in articulating and developing its sustainability strategy and providing oversight of sustainability initiatives across the business, in line with the purpose, values, and strategy of Howdens as established by the Board. This includes monitoring the content and completeness of Howdens’ external statements, disclosures, and other reporting on sustainability matters. Setting the tone from the top on environmental and social matters, ensuring that these priorities are embedded in wider strategy, and developing robust KPIs are key functions of the Committee. Sustainability Committee report The key duties the Committee carries out in relation to any environment and climate action and Howdens’ contribution to society are set out in the Committee’s Terms of Reference, which are reviewed annually and can be accessed on our corporate website (https://www.howdenjoinerygroupplc. com/governance/corporate-governance-report/terms-of- reference-of-the-sustainability-committee). However, it will also consider any other matters referred by the Board or its Committees relevant to sustainability. The remit of the Sustainability Committee does not cover governance matters per se and these remain a matter for the Board and its Committees. The Committee will also liaise as necessary with all other Board Committees as required. The work of the Committee in 2023 Environmental sustainability The Committee received updates at all its meetings from the Director of Sustainability and remain committed to management’s goal of becoming the UK’s leading responsible kitchen and joinery business.  considering the initiatives and engagement necessary to help reduce the Group’s indirect, scope 3 carbon emissions  undertaking involves aligning our global supply base with our emissions objectives across all product categories. In 2023, a new supplier code of conduct was introduced which included obligations for emissions reductions and sustainability targets. The Committee also received updates on supplier visits and the ESG supplier conference held in July. This workshop-style conference was held jointly with one of our key kitchen frontal suppliers, Friul, with the objective to send a strong message to our tier 2 supplier and focus them on our objectives.  in addition to reducing direct carbon emissions from our business, is key to supporting our validated SBTi carbon reduction targets. The Committee also received regular updates on waste and more widely on the product and packaging programme. There were regular demonstrations of packaging innovation and new technologies and the Head of Design updated the Committee on innovations from the teams at Howdens, demonstrating that sustainability by design had become embedded in our product development processes. More information on our environmental sustainability can be found in the sustainability matters report (which begins on page 42). 2023 Sustainability Committee activity Committee meeting • Sustainability strategy update • Progress against SBT Net Zero Plans Committee meeting • Sustainability strategy update • EDI update • 2024 Sustainability Committee calendar • Committee Terms of Reference Committee meeting • Sustainability strategy update • EDI and workforce skills • 2022 Sustainability Report February April September TCFD – business resilience The Sustainability Committee is mindful to understand key climate risks and opportunities. We do this through our business resilience framework, which is documented through our TCFD disclosures. These disclosures are contained in the strategic report on pages 60 to 66. The Committee has encouraged a simple and pragmatic approach to business resilience. Building on the disclosures in 2022, the Committee considered three model scenarios, a materiality impact assessment and associated action plan. These are integrated with the Science Based Targets Net Zero Plans, which include comprehensive supply chain mapping, a compelling customer sustainability offer and regular review of Howdens sustainability strategy. 2023 meeting attendance Peter Ventress (3/3) Karen Caddick (3/3) Andrew Cripps (3/3) Geoff Drabble (2/2) Louis Eperjesi (1/1) Louise Fowler (3/3) Debbie White (3/3) Key activities in the year ahead • Receive updates on execution of the Group’s sustainability strategy, including the roadmap for SBTi net zero targets. • Receive updates on the Group’s equality, diversity and inclusion priorities, workforce skills and development. • Review the Sustainability Committee’s Report and Terms of Reference. • Approval of the 2024 Sustainability Committee calendar. Peter Ventress Sustainability Committee Chair 141 Howden Joinery Group Plc Annual Report & Accounts 2023 140 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance GovernancePage Title Page TitleSustainability Committee report Governance Sustainability Committee report continued Skills A key area of focus for the Sustainability Committee during the year was employee skills and development. Updates on developing core skill frameworks and training for critical roles were provided in addition to updates on apprenticeships and core skills training. A new Kitchen Sales Designer 'Better Buy Design' training programme has been piloted and launched with 21 designers in the initial trial. We have also trained 284 managers in our leadership programme 'Leading the Way'. Both programmes will be rolled out across our Depots in 2024. Sustainability in 2024 The Committee will continue to focus on the core environmental and social matters that matter the most to our stakeholders. This will include further monitoring of our SBTi Net Zero carbon reduction strategy and promoting our EDI agenda. We will continue to communicate our progress and priorities as part of Howdens wider strategy. By order of the Board Peter Ventress Sustainability Committee Chair 28 February 2024 Supported by external consultancy, ESG360, the Group utilised the following methodology for TCFD implementation: • Governance and oversight: Board and management oversight to ensure that climate issues are embedded in the strategic planning/ enterprise risk management. • Assess materiality of climate-related risks: Understand potential climate related risks and opportunities for Howdens’ business involving all relevant internal stakeholders. • : Construct appropriate scenarios to develop relevant narratives according to Howdens’ context and business model. • Evaluate business impacts: For each scenario (three  qualitative to quantitative. • Identify potential responses: Use the results to identify realistic strategic responses to manage risks and opportunities. • Document and disclose: Communicate to relevant parties – the inputs, assumptions, methods, outputs, and potential management responses. Equality, diversity and inclusion (EDI) The Sustainability Committee received updates from the senior HR team on the progress made during the year in respect of the EDI strategy, noting that management had reframed its inclusion strategy around three key areas: • Being ‘worthwhile for all’ – providing clarity on its approach to inclusion. • Support for all – helping managers to get the best out of all their people. • Accessible for all – broadening our reach and being accessible to all. The Committee considered communication strategies and events undertaken during the year and how better-quality quantitative data was being collected and used to promote better inclusion across the business.   To make our Annual Report and Accounts more accessible, a number of the sections traditionally found in this report can be found in other sections of this Annual Report and Accounts where it is deemed that the information is presented in a more connected and accessible way. The Directors’ report comprises the sections detailed below, including the statement on political donations and research and development (‘R&D’). Any sections that have been moved have been cross-referenced below: Located in the sustainability report: Greenhouse gas emissions and streamlined energy and carbon reporting (SECR): Details of the Group’s greenhouse gas emissions, as required by Sch. 7 of the Large and Medium-Sized Companies and Groups (Accounts and Reports) Regulation 2008 as amended by the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013, are set out on page 67. Information required by the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 as amended by the Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 (SI 2018/1155), can be found on pages 67 and 68. Located in the additional information section: Annual General Meeting (AGM): Information about the AGM can be found on page 214. The recommendation to reappoint KPMG LLP as the Group’s auditor, can be found on page 136. Share capital, substantial shareholdings and acquisition of the Company’s own shares (including nominal value of shares purchased): pages 214 and 215. Directors' Indemnity and Insurance: page 215.  terminate upon a change of control: page 215. Disclosure required under Listing Rule 9.8.4R: • Dividend waivers: page 214. •  to 30 December 2023: page 215.  Employees: The average number of employees and their remuneration are shown in note 21. Details of the SIP can be found in note 23. Financial risk management (relating to SI 2008/410 Schedule 7 Part 1.6): note 20. Disclosure required under Listing Rule 9.8.4R: • Details of long-term incentive schemes: note 23. • Details of any tax relief, including amount and treatment: note 7. The remaining disclosures required by LR 9.8.4R (with the exception of those described above under subheading 'Located in the additional information section') are not applicable to the Company. Dividend: note 17. Located in the strategic report: Principal Group activities, business review and results: pages 2 to 35. Dividend: pages 18 and 32. Located in the governance section: Directors of Howden Joinery Group Plc: The names of anyone who served as a Director during the period can be found on page 74 under 'Board meeting attendance'. 2018 UK Corporate Governance Code (the ‘Code’): How the Company applied the Principles and complied with the Provisions of the Code can be found on pages 92 to 97. A copy of the Code can be accessed via www.frc.org.uk. Internal control and risk management arrangements: Internal control arrangements information can be found in the Audit Committee report on page 138. Risk management arrangements information can be found on pages 36 to 37 and in the Principal risks and uncertainties section beginning on page 38. Board and Group Diversity policies: page 102. Stakeholder engagement: Details regarding the engagement with suppliers, customers, and others in business relationships with the Company, as required by Sch. 7 to the Large and Medium-Sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended by the Companies (Miscellaneous Reporting) Regulations 2018), can be found on pages 84 to 91. Employees: The total number of employees and gender diversity statistics are located on page 102. The methods of engaging with the workforce can be found on pages 86 and 87. All eligible UK employees have been invited to participate in a Free Shares award under the Company’s Share Incentive Plan (SIP) each year since 2015, and since 2021 were invited to participate in a SIP Partnership and Matching Shares plan. Directors’ statement of disclosure of information to the auditor: page 144. Directors’ report Political donations and R&D The Group made no political donations during the current and  to any non-UK political party during the current or previous   By order of the Board Forbes McNaughton Company Secretary 28 February 2024 143 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report 142 Howden Joinery Group Plc Annual Report & Accounts 2023 Governance Page TitleGovernance Page Title Directors’ report Governance Directors’ statements Disclosure of information to the auditor    section 418 of the Companies Act 2006) of which the Group’s auditor is unaware, and each of the Directors has taken all the steps they ought to have taken as a Director to make themself aware of any relevant audit information and to establish that the Group’s auditor is aware of that information. This  with the provisions of section 418 of the Companies Act 2006. Statement of Directors’ responsibilities The Directors are responsible for preparing the Annual Report and Accounts and the Group and parent Company  regulations. Company law requires the Directors to prepare    adopted international accounting standards and applicable law and have elected to prepare the parent Company  standards and applicable law, including FRS 101 Reduced  Under company law the Directors must not approve the  a true and fair view of the state of affairs of the Group and  period. In preparing each of the Group and parent Company  • select suitable accounting policies and then apply them  • make judgements and estimates that are reasonable, relevant, reliable and, in respect of the parent Company  •  have been prepared in accordance with UK-adopted  •  whether applicable UK accounting standards have been followed, subject to any material departures disclosed and  • assess the Group and parent Company’s ability to continue as a going concern, disclosing, as applicable, matters  • use the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so. The Directors are responsible for keeping adequate  the parent Company’s transactions and disclose with   statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is  that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud  Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors’ Report, Directors’ Remuneration Report and Corporate Governance Statement that complies with that law and those regulations. The Directors are responsible for the  information included on the Company’s website. Legislation in the UK governing the preparation and dissemination of  jurisdictions. In accordance with Disclosure Guidance and Transparency    statements provides no assurance over whether the annual  requirements. Directors’ responsibility statement  •  applicable set of accounting standards, give a true and fair  or loss of the Group and Company, and the undertakings  • the Annual Report and Accounts includes a fair review of the development and performance of the business and the position of the Group and Company and the undertakings including the consolidation taken as a whole, together with a description of the principal risks and uncertainties they  • 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 position and performance, business model and strategy. This responsibility statement was approved by the Board of Directors and is signed on its behalf by: Andrew Livingston Paul Hayes   28 February 2024  information in our annual reports for many years. The Board is committed to acting responsibly and working with our stakeholders to manage the social and ethical impact of our activities. The Howdens culture is to be ‘worthwhile for all concerned’ and so we aim to treat all our stakeholders fairly and with integrity. We have a number of Group policies to provide guidance to our employees. The policies are designed to be easily understood and they generally include examples of acceptable and unacceptable behaviours. To consolidate our reporting requirements under sections 414CA and 414CB of the Companies Act 2006 in respect of non-  each of the disclosure requirements. Focus area Policies and statements More information and outcomes Environmental matters Sustainability and Corporate Social Responsibility Statement of Intent (see Group website). • Greenhouse gas emissions and streamlined energy and carbon reporting (pages 67 and 68). • Discussion about the Company's SBT Net Zero commitment and targets (pages 46 and 47). •    – (g) and (h) on page 63). • Discussion of the Company’s progress on implementing the recommendations of the Task Force on Climate-Related Financial Disclosures (pages 60 to 66). • Discussion of the UN Sustainable Development Goals (UN SDGs) (page 45). •  standard (page 56), and our use of renewable energy sources (page 57). • KPIs on production waste reuse, recovery, and recycling (page 57) and our target of 100% of wood-based material used in manufacturing processes being made from  •  sustainable product offer and product innovation (pages 52 to 53). Social matters Sustainability and Corporate Social Responsibility Statement of Intent (see Group website). • Our impact on our stakeholders (pages 58 and 58) and engagement with stakeholders (starting on page 84). • Our progress on equality, diversity and inclusion and wellbeing matters (pages 54 and 55) and our work with local and national charities (page 17). • Our Boardroom and Group Diversity Policies (page 102). Respect for human rights Human Rights Policy and Modern Slavery Statement (see Group website). • Discussion of the UN SDG Goal 8 (Decent Work and Economic Growth) (pages 54 and 55). • Our Modern Slavery Statement (see Group website) sets out how we actively monitor suppliers and train our procurement staff. • Internationally recognised labour standards form part of our contracts of employment. Anti-bribery and corruption Anti-bribery and  interest, corporate gifts and hospitality, anti-money laundering, anti-tax evasion and competition law. • The Board considers and approves the following Group policies: anti-bribery and corruption, anti-money laundering, anti-tax evasion, competition law policy, market abuse compliance and the Modern Slavery Statement and whistleblowing. • We have a rolling programme of refresher training on modern slavery and anti- bribery for our compliance team and buyers. • Further information about our whistleblowing facility may be found on page 87. Employees Health & Safety Statement of Intent (see Group website), market abuse compliance, data protection and privacy, and whistleblowing. • KPI on Health and Safety and discussion of Health and Safety performance and initiatives (page 56). •  apprentice schemes (pages 51 and 55). • Diversity policies and statistics (pages 101 and 102). • Workforce engagement (pages 86 and 87). • Directors’ remuneration policy (see Group website for the full policy or pages 113 to 116 for a summary of the policy).  A discussion of our principal and emerging risks, including those related to our business relationships, products and services, as well as a description of our risk management process, starts at page 36.  145 Howden Joinery Group Plc Annual Report & Accounts 2023 144 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Governance Governance Non-financial and sustainability informationDirectors’ statements Dividends paid £114m paid in 2023 Revenue £2,311m (2022: £2,319m) EPS 46.5p (2022: 65.8p) Net cash £283m (2022: £308m)  £328m (2022: £406m)  £340m (2022: £415m)    2023 2023 46.5p  2023 2023 2023 2019 2019 2019 2020 2020 2022 2022 2022 2021 2021 £415m 65.8p £115.0m £260m 35p £70.6m 2021 (inc. £54.1m special dividend) £133.6m £196m 25p £402m 53.2p 2020 £0.0m £406m £308m 2019 20192019 2020 20202020 2022 2022 2022 2021 2021 2021 £1,584m £1,548m £2,319m £2,094m £261m £185m £390m £267m £431m £515m 2023 146 147  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report 148 Independent auditor’s report 162 Consolidated income statement 162 Consolidated statement of comprehensive income 163 Consolidated balance sheet 164 Consolidated statement of changes in equity 165  166  205 Company balance sheet 206 Company statement of changes in equity 207  Financial Statements Financial StatementsPage Title Page Title         Our independence    applied to listed public interest entities. We have not performed any non-audit services during      periods ended 30 December 2023. The Group engagement partner is required to rotate every     £1.3m Other services £0.1m Non-audit fee as a % of total audit and audit related fee % £nil  n/a  12 May 2022  2 years Tenure of Group engagement partner 2032 Tenure of Group engagement partner 2 years   In our opinion: •   •   •   •  Companies Act 2006. What our opinion covers      • Consolidated income statement • Consolidated statement of comprehensive income • Consolidated balance sheet • Consolidates statement of changes in equity •  •   • Company balance sheet • Company statement of changes in equity •          Independent auditor’s report To the members of Howden Joinery Group Plc             relation to these, as in the prior year. We have determined that accounting for inventory is of   in determining the adequacy and completeness of the inventory obsolescence provision. Inventory provisioning includes estimation based on both historic usage and  deterioration in the macro-economic environment during     our audit effort.        the prior year. The recoverability of the Parent Company’s investment in subsidiaries and debt due from group entities is not at a    Key Audit Matters Vs FY22 Item Accounting for inventory (Group) 4.1  (Group) 4.2 Recoverability of Parent Company’s investment in subsidiaries and debt due from group entities (Parent Company) 4.3  148 149  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Independent auditor’s reportFinancial Statements Financial Statements Page Title    or the Parent Company or to cease their operations, and as they have concluded that the Group’s and the Parent Company’s    Going concern        •  living challenges, and the possibility of this negatively  •  supply chain.  liquidity or covenant compliance in the going concern period  individually and collectively, could result in a liquidity issue,  projected cash and facilities (a reverse stress test). We assessed the completeness of the going concern   Directors’ use of the going concern basis of accounting   all future events or conditions and as subsequent   made, the above conclusions are not a guarantee that the   • We consider that the Directors’ use of the going concern   •  assessment that there is not, a material uncertainty related to events or conditions that, individually or  Parent Company’s ability to continue as a going concern  •  in relation to the Directors’ statement in note 1 to the    Company’s use of that basis for the going concern period,   • The related statement under the Listing Rules set out   Independent auditor’s report continued To the members of Howden Joinery Group Plc     of procedures to be performed at these components. The audit of all  by the Group team. The Group has 14 reporting components. We determined individually  total revenue or total assets. We selected these because these are the   performed full scope audits on these components.    audit team.    We consider the scope of our audit, as communicated to the Audit Committee, to be an appropriate basis for our audit opinion.   We have considered the potential impacts of climate change       described on page 46.          audit. This included enquiries of management, consideration of the Group’s processes for assessing the potential impact of         We have read the Group’s disclosure of climate related information in the front half of the annual report as set out      We have determined overall materiality for the Group           Group Group Materiality GPM Group Performance Materiality HCM  PLC Parent Company Materiality LCM  AMPT Audit Misstatement Posting Threshold   Residual components Group GPM  PLC LCM AMPT 12 9.8 2.4 2.5 1 0.9 19 17.5 12.3 13.1 18 16.6   93% 97% 94% 7% 3% 6%  before tax Total assets Revenue 150 151  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title       the greatest effect on our overall audit strategy. As at 30 December 2023, net inventory, after recognising relevant   The scale of the Group’s product range means there is  completeness of the inventory obsolescence provision, in particular the provision applied to discontinued and    The deterioration in the macro-economic environment  on the already high estimation uncertainty associated  The effect of these matters is that, as part of our  obsolescence provision has a high degree of estimation      range, typically held in large quantities. The Group    of the counts.  is updated annually. Variances to standard cost are analysed and apportioned to inventory at the period end. Whilst the quantities and cost of inventory is not  misstatement, it is one of the matters that has the greatest   engagement team in order to conclude.  • Count attendance: effectiveness of the inventory cycle counts control. We counted a sample of inventory lines and assessed the accuracy of the Group’s inventory quantities through comparing the results to the Group’s inventory records. • Tests of detail:    tested any movements in inventory quantities by comparing to relevant  using statistical routines. • Tests of detail:  testing a sample of inventory lines to relevant source data. • Our sector experience:  of inventory that may not be in demand and respective sales prices, against  • Historical comparisons: in the inventory obsolescence provision by comparing to the historical utilisation. • Test of detail:   the Directors to discontinued items. • Test of detail:   • Assessing transparency: statement disclosures about the degree of estimation uncertainty in arriving at the net realisable value. We performed the detailed tests above over inventory provisioning rather than   detailed procedures described.   •  • Our conclusions on the appropriateness of the Group’s inventory provisioning methodology, accounting policies and disclosures.   •              relation to: •     •   •     and meet its liabilities as they fall due over the period of their assessment, including any   page 70 under the Listing Rules.     statements is not a guarantee as to the Group’s and Parent Company’s longer-term viability. Our reporting We have nothing material  to in relation to these disclosures. We have concluded that these disclosures are         •  •  • directing the efforts of the engagement team.    on these matters.      FY23 FY22 Our assessment is that  FY23: Acceptable  Inventories gross value £432.4m £426.8m Inventory provision £49.6m £53.5m Independent auditor’s report continued To the members of Howden Joinery Group Plc 152 153  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title        FY23 FY22 Our assessment is that  FY23: Acceptable  Investments in subsidiaries £699.0m £699.0m  companies £69.4m £103.3m    The carrying amount of the Parent Company’s investment in subsidiaries and intra-group debtor balance represents     is considered to be the area that had the greatest effect on our   • Tests of detail: Assessing 100% of the investment in subsidiaries        • Comparing valuations:   of the business based on forecasted dividends to ultimately be   the Company’s controls because the nature of the balance is such  detailed procedures described.   • Our approach to the audit of parent company investments in subsidiaries and intra-Group receivables including details of our planned  • Our conclusions on the recoverability of the Parent Company’s investment in subsidiaries and intra-group debtor balances.   •  parent company from other Group entities.          the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. Accordingly,       FY23 FY22    FY23: Acceptable   £913.6m £930.5m       and mortality rates) can have a material impact on the amount            the Group.      • Benchmarking assumptions:  the estimation of the pension liability, being the discount rate,   • Actuary’s credentials:  • Assessing transparency: Group’s disclosures in respect of the sensitivity of the pension   of the Group’s controls because the nature of the balance is such     •   •  • The adequacy of the disclosures, particularly as it relates to the sensitivities disclosed by the Group.   •        Independent auditor’s report continued To the members of Howden Joinery Group Plc 154 155  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title              compliance throughout the audit.             of the Directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach         may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud         •  level policies and procedures to prevent and detect fraud, including the internal audit function, and the Group’s channel  • Reading Board and Audit Committee meeting minutes. • Considering remuneration incentive schemes and performance targets for management and Directors including the long- term incentive plan for management remuneration. •    the audit.      related to revenue recognition because there are limited opportunities to fraudulently adjust revenue recognition given the      this report.  We performed procedures including: •    •  Independent auditor’s report continued To the members of Howden Joinery Group Plc 156 157  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title       misstatements are considered to be clearly      indicators of fraud.       qualitative grounds.  statement caption amounts: Total Group Revenue  Total Group Assets FY23 FY22 FY23 FY22 FY23 FY22  £2,310.9m £2,319.0m £327.6m £405.8m £2,064.5m £2,032.7m Group Materiality as % of caption 0.8% 0.8% 5.3% 4.7% 0.8% 0.9%  Group scope            Scope Number of components Range of materiality applied Group revenue  losses that made up Group PBT Group total assets  5 (5) £2.5m – £16.6m (£2.4m – £18.0m) 97% (97%) 93% (96%) 94% (95%) Residual components 9 (9) 3% (3%) 7% (4%) 6% (5%) Total 14 (14) 100% 100% 100%                  A quantitative reference for the purpose of planning and performing our audit.          interest entities considers a guideline range of 3% – 5% of the measure. In     appropriate.        Our procedures on individual account    that individually immaterial misstatements in individual account balances add up to   We have considered performance materiality at a level of 75%      We applied this percentage in our determination of performance   Independent auditor’s report continued To the members of Howden Joinery Group Plc 158 159  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title    Our reporting  •   •    •  •  We have nothing to report in these respects.      assessing the Group and Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to  Company or to cease operations, or have no realistic alternative but to do so.                    for and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants 15 Canada Square London         Our reporting      misstatements or inconsistencies in the other information. Strategic Report and Directors’ Report   •  •  •    Our reporting  Remuneration Report to be audited has been properly prepared in accordance  In our opinion the part of the Directors’ Remuneration Report to be audited has been properly  Companies Act 2006.   Our reporting   •   the information necessary for shareholders to assess the Group’s position and  •    •    have concluded that each of these disclosures is materially consistent      We have nothing to report  Independent auditor’s report continued To the members of Howden Joinery Group Plc 160 161  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title   Notes 30 December 2023 24 December 2022 £m £m Non-current assets Intangible assets 9 43. 5 35. 9 Property, plant and equipment 10 456.9 3 9 8 .7 Lease right-of-use assets 11 6 4 7. 9 614. 3  7 15 .6 35 .9 Prepaid credit facility fees 0.8 1 .0 1 , 16 4.7 1,085.8 Current assets Inventories 12 3 82 .8 3 73. 3  7 3 9.7 32.3 Trade and other receivables 13 194 .5 23 3. 3 Cash and cash equivalents 18 282 .8 308.0 89 9.8 946.9 Total assets 2,0 6 4.5 2 ,0 3 2 .7 Current liabilities Lease liabilities 11 (85 .3) (9 5.3) Trade and other payables 14 (373. 2) (4 3 3 . 9) Provisions 15 (9.5) (1 2 .0) (4 6 8 . 0) (5 41 . 2) Non-current liabilities Pension liability 22 (1 2 .6) (4 1 . 5) Lease liabilities 11 (599.2) (570.0)  7 (3. 3) (3.8) Provisions 15 (3.0) (4 . 5) (618.1) (6 1 9.8) Total liabilities (1,086.1) (1 , 161 .0) Net assets 978 .4 8 7 1 .7 Equity Share capital 16 55. 4 5 6. 1 Capital redemption reserve 16 9.8 9. 1 Share premium 16 8 7. 5 8 7. 5  16 16 .6 1 1 .7 Treasury shares 16 (24. 0) (25.5) Retained earnings 16 83 3. 1 7 32. 8 Total equity 978 .4 8 7 1 .7  behalf by     Notes 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Continuing operation: Revenue 2 2 ,310.9 2, 319.0 Cost of sales (9 0 7. 0) (9 0 7. 8)  1,4 0 3.9 1 , 41 1 . 2  (1 , 0 6 3 .7) (996.0)  4 3 4 0. 2 415 . 2  5 5.5 3.8  6 (18.1) (13 .2)  3 2 7. 6 405 .8  7 (7 3. 0) (3 1 .6)  25 4.6 3 74 . 2 Earnings per share: Basic earnings per 10p share 8 46.5p 65. 8p Diluted earnings per 10p share 8 46 .3p 6 5.6p Notes 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m  25 4.6 3 74 . 2 Items of other comprehensive income:   22 13 .3 (18 3 .0)  7 (2. 9) 3 4.8  7 (0 . 4) 11 .0  Currency translation differences (0.5) 2. 1 Other comprehensive income for the period 9.5 (135.1) Total comprehensive income for the period attributable to equity holders of the parent 2 64. 1 239.1 162 163  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Consolidated balance sheetConsolidated income statement Consolidated statement of comprehensive incomeFinancial Statements Financial Statements  Notes 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m  3 2 7. 6 405.8 Adjustments for:  (5.5) (3 .8)  18.1 13. 2  9, 10 5 0.8 4 4.0 Depreciation, impairment and loss on termination of leased assets 11 9 0.1 80. 8 Share-based payments charge 6.0 7. 3 Decrease/(increase) in prepaid credit facility fees 0.3 (0 .7)  (16.9) 2 .0  0.3 (0. 1)  47 0 . 8 548.5 Movements in working capital Increase in inventories (9.5) (6 9.8) Decrease/(increase) in trade and other receivables 38 .8 (2 3 .7) (Decrease)/increase in trade and other payables and provisions (64.3) 41 . 8 (3 5.0) (51 .7) Cash generated from operations 435.8 496.8  (6 3. 5) (10 1. 5)  372.3 3 95. 3  Payments to acquire property, plant and equipment and intangible assets (1 1 8 .9) (140 .8) Receipts from sale of property, plant and equipment and intangible assets – 0.7 Acquisition of subsidiary – net of cash acquired – (14. 6) Interest received 4 .7 1 .1 Net cash used in investing activities (1 14. 2) (15 3 .6)   (50.0) (250.5) Receipts from release of shares from share trust 0.5 0. 1 Dividends paid to Group shareholders (114 .1) (1 15 .0) Interest paid – including on lease liabilities (16 . 8) (1 3. 1) Repayment of capital on lease liabilities (10 5 .0) (6 6. 1)  (285.4) (444 . 6) Net decrease in cash and cash equivalents (27 .3) (20 2 .9) Cash and cash equivalents at beginning of period 308.0 51 5. 3  2.1 (4.4) Cash and cash equivalents at end of period 18 28 2. 8 308.0 1      Capital Share ESOP and Share redemption premium share-based Treasury Retained capital reserve account payments shares earnings Total £m £m £m £m £m £m £m At 25 December 2021 59. 8 5.4 8 7. 5 5.9 (27 .1) 8 60.0 991.5  – – – – – 374 . 2 3 74 . 2 Other comprehensive income for the period – – – – – (135.1) (135.1) Total comprehensive income for the period – – – – – 239.1 239.1  – – – – – 0.4 0.4  – – – – – (1. 3) (1 . 3)  – – – 7. 4 – – 7. 4  (3 .7) 3 .7 – – – (250.5) (250.5) Transfer of shares from treasury into share trust – – – (1 .6) 1 .6 – – Dividends – – – – – (1 15 .0) (1 15 .0) At 24 December 2022 5 6.1 9.1 8 7. 5 1 1 .7 (25.5) 732 .8 87 1 .7  – – – – – 2 5 4.6 25 4.6 Other comprehensive income for the period – – – – – 9. 5 9.5 Total comprehensive income for the period – – – – – 2 64. 1 264. 1  – – – – – 0.3 0. 3  – – – – – – –  – – – 6.4 – – 6.4  (0.7) 0.7 – – – (50.0) (50.0) Transfer of shares from treasury into share trust – – – (1 .5) 1.5 – – Dividends – – – – – (1 14. 1) (1 14.1) At 30 December 2023 55.4 9. 8 8 7. 5 16 .6 (24.0) 833.1 978 .4    5,237,907 shares of 10p each). We present a description of the nature and purpose of each reserve at note 16.  164 165  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Consolidated statement of changes in equityFinancial Statements Financial Statements   Company and currency details Howden Joinery Group Plc (‘the Company’) is a company incorporated in the United Kingdom under the Companies Act 2006. Its registered office address is 105 Wigmore Street, London W1U 1QY. The nature of the Group’s operations and principal activities are set out in the Strategic Report. These financial statements are presented in pounds sterling, the currency of the primary economic environment in which the Group operates.  Foreign operations are included on the basis set out below. Foreign currency transactions Transactions in foreign currency are translated at the exchange rate on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the exchange rate at the balance sheet date. Foreign exchange gains and losses on trading are recognised in the income statement. Foreign operations The assets and liabilities of foreign operations are translated into sterling at foreign exchange rate at the balance sheet date. The results and cash flows of overseas subsidiaries are translated into sterling on an average exchange rate basis, weighted by the actual results of each month. Exchange differences arising from the translation of the results and net assets of overseas subsidiaries are taken to equity via the statement of comprehensive income. Accounting period The Group’s accounting period covers the 53 weeks to 30 December 2023. The comparative period covered the 52 weeks to 24 December 2022. Impairment of assets The carrying amount of the Group’s assets is reviewed at least annually to determine whether there is any indication of impairment. If such an indication exists, the asset’s recoverable amount is estimated. Apart from trade and other receivables, and inventories, an impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment losses are recognised in the income statement. For trade and other receivables, and inventories, which are considered to be impaired, the carrying amount is reduced through the use of an allowance for estimated irrecoverable amounts. Changes in the carrying value of this allowance are recognised in the income statement. Statement of compliance and basis of preparation The Group financial statements have been prepared in accordance with UK-adopted international accounting standards. The financial statements have been prepared on the historical cost basis, modified for certain items carried at fair value, as stated in the accounting policies. These consolidated financial statements include the accounts of the Company and all entities controlled by the Company (its subsidiaries, together referred to as ‘the Group’) from the date control commences until the date that control ceases. ‘Control’ is defined as the Group having power over the subsidiary, exposure or rights to variable returns from the subsidiary, and the ability to use its power to affect the amount of returns from the subsidiary. Further details of all subsidiaries are given in the ‘Additional Information’ section at the back of this Annual Report. All subsidiaries are 100% owned and the Group considers that it has control over them all. Going concern The Directors have undertaken a robust assessment and concluded that it is appropriate to prepare the financial statements on the going concern basis. They have not identified any material uncertainties. Full details are set out in the strategic review, starting on page 69. The going concern review period covers the period of 12 months after the date of approval of these financial statements. The Board has considered the trading results and financial performance in 2023, and the Group balance sheet at 30 December 2023, noting that the Group is debt-free, has cash and cash equivalents of £283m, and appropriate levels of working capital. The Group also has a five-year, committed, multi-currency revolving credit facility of up to £150m which expires in September 2027, which was not used during the period and which was not drawn at the year end. Management have modelled various scenarios including: •  A ‘base case’ scenario. This is based on the final 2023 Group forecast, prepared in November 2023 and including the actual results of the 2023 peak sales period. •  A ‘severe but plausible’ downside scenario based on the worst 12-month year-on-year actual fall ever experienced in the Group’s history. This is more significant than the combined effect of COVID and Brexit on 2020 actual performance. In this scenario the Board considered the current economic conditions that the company and its customers are facing, and noted that the downside scenario included allowances for reduced demand and increased costs to reflect such adverse conditions •  A ‘reverse stress-test’ scenario.     Company and currency details     Accounting period Impairment of assets Statement of compliance and basis of preparation Going concern Standards in issue but not yet effective Earnings 2 Revenue       6 Finance costs   8 Earnings per share        12 Inventories     15 Provisions     17 Dividends                    Other supporting notes         166 167  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Notes to the consolidated financial statementsFinancial Statements Financial Statements Page Title  continued  3 Segmental reporting (a) Basis of segmentation, and other general information Information reported to the Group’s Executive Committee, which is regarded as the chief operating decision maker, is focused on one operating segment, Howden Joinery. Thus, the information required in respect of profit or loss, assets and liabilities, can all be found in the relevant primary statements and notes of these consolidated financial statements. The Howden Joinery business derives its revenue from the sale of kitchens and joinery products, and related services. (b) Geographical information The Group’s operations are mainly located in the UK, with a smaller presence in France, Belgium and the Republic of Ireland. The Group has depots in each of these locations. The number of depots in each location at the current and prior period ends is shown in the five year record which is located towards the back of this Annual Report. The Group’s manufacturing and sourcing operations are located in the UK. The following table analyses the Group’s revenues from external customers by geographical market, irrespective of the origin of the goods: Revenues from external customers 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m UK 2,241.1 2,256.1 France, Belgium and Republic of Ireland 69.8 62.9 2,310.9 2,319.0 The following is an analysis of the carrying amount of assets, and additions to property, plant and equipment and intangible assets, analysed by the geographical area in which the assets are located. Carrying amount of assets 30 December 2023 24 December 2022 £m £m UK 1,935.6 1,903.1 France, Belgium and Republic of Ireland 128.9 129.6 2,064.5 2,032.7 Non-current assets (excluding deferred tax) 30 December 2023 24 December 2022 £m £m UK 1,068.3 975.4 France, Belgium and Republic of Ireland 80.8 74.5 1,149.1 1,049.9 Additions to property plant and equipment and intangible assets 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m UK 108.3 122.7 France, Belgium and Republic of Ireland 9.1 24.5 117.4 147.2  In the base case and the severe but plausible downside scenarios, the Group has significant headroom throughout the going concern period after meeting its commitments. In the reverse stress-test scenario, the results show that sales would have to fall by a significant amount over and above the fall modelled in the severe but plausible downside scenario before the Group would have to take further mitigating actions. The likelihood of this level of fall in sales is considered to be remote. Taking all the factors above into account, the Directors believe that the Group is well placed to manage its financing and other business risks satisfactorily, and have a reasonable expectation that the Group will have adequate resources to remain in operational existence for the going concern review period set out above. Standards in issue but not yet effective At the date of authorisation of these financial statements, the following standards, amendments to standards, and interpretations, were in issue but not yet effective for the Group in these financial statements: Amendments to IAS 1: Presentation of financial statements and IFRS Practice Statement 2: Disclosure of accounting policies Amendments to IAS 12: Deferred tax related to assets and liabilities arising from a single transaction IFRS 17: Insurance Contracts Amendments to IAS 8: Definition of Accounting Estimates Amendments to IAS 1 – Classification of Liabilities as Current or Non-Current Amendments to IFRS 16: Lease Liability in a Sale and Leaseback Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangements Amendments to IAS 12: International Tax Reform—Pillar Two Model Rules The Directors anticipate that the adoption of the standards and interpretations mentioned above will have no significant impact on the Group’s financial statements when the relevant standards come into effect. Significant accounting judgements and major sources of estimation uncertainty The Group recognises significant judgement and estimation uncertainty in connection with its defined benefit pension. It also recognises estimation uncertainty over making allowances against the carrying value of inventory. More details are given in the relevant notes. Other significant accounting policies These are presented as part of the related note to the financial statements. Earnings 2 Revenue Accounting policy The Group recognises revenue when it has satisfied its performance obligations to the customer and the customer has obtained control of the goods or services being transferred. Revenue from sales of goods is recognised on collection or delivery of the goods. Revenue from services is a small percentage of total revenue, and is recognised when the customer accepts that the services are complete. We measure revenue at the fair value of the consideration received or receivable, excluding sales taxes and discounts. We recognise interest income as it accrues and measure it using the effective interest rate method. 168 169  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title  continued  6 Finance costs 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Interest expense on lease liabilities (16.8) (13.1) Other finance expense – pensions (1.3) – Other interest – (0.1) Total finance costs (18.1) (13.2) 7 Current and deferred tax Accounting policy Income tax The tax expense represents the sum of current tax and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income. Current tax Current tax is based on taxable profit for the financial period and any adjustments to tax payable or receivable for prior years. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other financial years as well as items that are never taxable or deductible. It is calculated as the best estimate of the tax expected to be paid or received. It reflects any uncertainty related to income taxes and is measured using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax Deferred tax is the tax expected to be payable or recoverable on the temporary difference between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. It is accounted for using the balance sheet liability method. It is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset realised, based on tax laws and rates that have been enacted or substantially enacted at the balance sheet date. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction (other than in a business combination) that affects neither the taxable profit nor the accounting profit. The carrying amounts of deferred tax assets are reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered. Earnings continued 4 Operating profit Operating profit has been arrived at after (charging)/crediting: 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Net foreign exchange (loss)/gain (8.2) (0.7) Cost of inventories recognised as an expense (892.8) (893.1) Write down of inventories (6.1) (14.0) (Loss)/profit on disposal of fixed assets (0.3) 0.1 Auditor’s remuneration for audit services (1.4) (1.1) All of the items above relate to continuing operations. A more detailed analysis of auditor’s total remuneration is given below: 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Audit services: Fees paid to the Company’s auditor for the audit of the Company’s annual financial statements (0.3) (0.2) Fees paid to the Company’s auditor and their associates for other services to the Group: – the audit of the subsidiary companies pursuant to legislation (1.0) (0.9) Total audit fees (1.3) (1.1) Other services: Audit related assurance services (review of the half-year results) (0.1) (0.1) Total non-audit fees (0.1) (0.1) Details of the Group’s policy on the use of auditors for non-audit services, the reasons why the auditor was used rather than another supplier and how the auditor’s independence and objectivity were safeguarded, are set out in the Corporate Governance Report. No services were provided pursuant to contingent fee arrangements. 5 Finance income 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Bank interest receivable 5.5 1.1 Other finance income – pensions – 2.7 5.5 3.8 170 171  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title  continued  (c) Reconciliation of the total tax charge The total tax charge for the period can be reconciled to the result per the income statement as follows: 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Profit before tax 327.6 405.8 Tax at the UK corporation tax rate of 23.5% (2022: 19%) 77.0 77.1 IFRS2 share scheme charge 0.5 0.3 Expenses not deductible for tax purposes 2.9 1.0 Overseas losses not utilised 6.2 2.7 Non-qualifying depreciation 1.0 1.6 Super deduction – capital allowances – (2.4) Rate change 0.7 0.6 Patent box claim (8.0) (9.0) Other tax adjustments in respect of previous periods (7.3) (40.3) Total tax charged in the income statement 73.0 31.6 The Group’s effective rate of tax is 22.3% (2022: 7.8%). The difference in the effective tax rate from prior year is driven by the effect of the Patent Box deduction claims for 2017–2021, which were realised during 2022 as “Other tax adjustments in respect of previous periods”, along with the increase in the headline corporation tax rate as of 1 April 2023. Deferred tax: Analysis of deferred tax assets and liabilities, and the movements on them during the period. Retirement Accelerated Company Other benefit capital share temporary obligations allowances schemes Leasing differences Total £m £m £m £m £m £m At 25 December 2021 (35.2) 0.2 3.5 3.3 3.9 (24.3) (Charge)/credit to income statement – 12.9 – 0.2 (0.6) 12.5 (Charge) to the income statement – change of rate – (0.4) – – (0.2) (0.6) Credit outside the income statement – change of rate 11.0 – 0.2 – – 11.2 (Charge)/credit outside the income statement 34.8 – (1.5) – – 33.3 At 24 December 2022 10.6 12.7 2.2 3.5 3.1 32.1 (Charge)/credit to income statement (4.1) (11.6) – (0.6) 0.5 (15.8) (Charge) to the income statement – change of rate – (0.7) – – – (0.7) (Charge) outside the income statement – change of rate (0.4) – – – – (0.4) (Charge)/credit outside the income statement (2.9) – – – – (2.9) At 30 December 2023 3.2 0.4 2.2 2.9 3.6 12.3 Deferred tax arising from accelerated capital allowances can be further analysed as a £3.5m asset and a £3.1m liability (2022: £16.5m asset and £3.8m liability). Earnings continued Current tax: (a) Tax in the income statement 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Current tax: Current year 64.7 77.2 Adjustments in respect of previous periods (8.2) (33.6) Total current tax 56.5 43.6 Deferred tax: Current year 14.9 2.1 Adjustments in respect of previous periods 0.9 (14.7) Effect of changes in tax rate 0.7 0.6 Total deferred tax 16.5 (12.0) Total tax charged in the income statement 73.0 31.6 UK Corporation tax is calculated at 23.5% (2022: 19%) of the estimated assessable profit for the period. Tax for other countries is calculated at the rates prevailing in the respective jurisdictions. (b) Tax relating to items of other comprehensive income or changes in equity 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Deferred tax charge/(credit) to other comprehensive income on actuarial difference on pension scheme 2.9 (34.8) Change of rate effect on deferred tax 0.4 (11.0) Deferred tax (credit)/charge to equity on share schemes – 1.3 Current tax (creditquity on share schemes (0.3) (0.4) Total charge/(credit) to other comprehensive income or changes in equity 2.9 (44.9) 172 173  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title  continued   9 Intangible assets (a) Total amounts recognised in the balance sheet 30 December 2023 24 December 2022 £m £m Goodwill – cost and carrying value 12.4 12.4 Software 31.1 23.5 43.5 35.9 (b) Goodwill Accounting policy Goodwill arising on a business combination represents the excess of the cost of acquisition over the share of the aggregate fair value of identifiable net assets (including intangible assets) of the acquired business at the date of acquisition. Goodwill is initially recognised as an asset and allocated to cash-generating units that are expected to benefit from the synergies of the business combination. Goodwill is not amortised, but is reviewed at least annually for impairment. Any impairment is recognised immediately in the income statement. Goodwill is stated in the balance sheet at cost less any provisions for impairment, if required. The goodwill shown above all arose on the acquisition of 100% of Sheridan Fabrications Ltd (‘SFL’) in 2022. The trading activities of SFL have been integrated into the Howden Joinery UK operations, which is the cash-generating unit to which we have allocated all of the related goodwill. The recoverability of the goodwill is assessed by looking at the value in use of the Howden Joinery UK cash-generating unit. The Howden Joinery UK operations, as shown in the geographical analysis at note 3(b) to these financial statements, represent over 95% of the consolidated Group sales. This is reflected in their contribution to total Group profit and cashflow. Given the size and contribution of this cash-generating unit in comparison with the £12.4m cost and carrying value of the allocated goodwill, it has not been considered necessary to look further ahead than the next 12 month forecast to verify that projected cashflows from the cash-generating unit are significantly in excess of the carrying value of the associated goodwill. Earnings continued The presentation in the balance sheet is as follows: 30 December 2023 24 December 2022 £m £m Deferred tax assets 15.6 35.9 Deferred tax liabilities (3.3) (3.8) 12.3 32.1 At the balance sheet date the Group had unused tax losses as disclosed below. These losses are carried forward by particular Group companies and may only be offset against profits of that particular company. Deferred tax assets are not recognised in relation to these losses, as it is not considered probable that suitable future taxable profits will be available in the relevant company against which the unused losses can be utilised. Specifically, in the case of the trading and non-trading losses this is due to the unpredictability of future profit streams in the relevant entities, while for the capital losses it is due to future capital gains not currently being forecast to arise. All unrecognised losses may be carried forward indefinitely and have been valued in GBP at the year end closing exchange rate. 30 December 2023 24 December 2022 £m £m Trading losses 100 77 Non-trading losses 20 20 Capital losses 86 86 Total losses 206 183 The losses disclosed above relate to activities both in the UK and in overseas jurisdictions. Of the trading losses, £31m relate to UK activities with the remainder being attributable to Belgium (£1m), Ireland (£4m) and France (£64m). All of the non-trading losses and capital losses are attributable to UK activities. 8 Earnings per share From continuing operations 53 weeks to 30 December 2023 52 weeks to 24 December 2022 Weighted Weighted average average number of Earnings per number of Earnings per Earnings shares share Earnings shares share £m m p £m m p Basic earnings per share 254.6 548.1 46.5 374.2 568.6 65.8 Effect of dilutive share options – 2.1 (0.2) – 2.1 (0.2) Diluted earnings per share 254.6 550.2 46.3 374.2 570.7 65.6 The difference between the weighted average number of shares used in the calculation of basic earnings per share and the total number of shares in issue at the period end is due to the net effect of time-apportioned adjustments for shares held in treasury, shares held in trust which are not unconditionally vested, and shares bought back and cancelled in the period. 174 175  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title  continued  10 Property, plant and equipment Accounting policy All property, plant and equipment is stated at cost (or deemed cost, as applicable) less accumulated depreciation and any accumulated impairment losses. Depreciation of property, plant and equipment is provided to write off the difference between their cost and their residual value over their estimated lives on a straight-line basis. The current range of useful lives is as follows: Freehold property     50 years Leasehold property improvements and fittings  the period of the lease, or the individual asset’s life, if shorter Plant, machinery & vehicles 3–20 years Fixtures & fittings     2–15 years Capital work-in-progress and freehold land are not depreciated. Residual values, remaining useful economic lives and depreciation periods and methods are reviewed regularly and adjusted if appropriate. Gains and losses on disposals are determined by comparing proceeds with carrying amounts and are recognised in the income statement. Cost Leasehold Plant, Freehold property machinery Fixtures & Assets under property improvements & vehicles fittings construction TOTAL £m £m £m £m £m £m At 25 December 2021 55.1 92.1 191.0 207.1 33.1 578.4 Exchange adjustments – – 0.1 0.5 – 0.6 Additions 16.2 16.5 12.2 49.6 44.4 138.9 Acquisition of subsidiary 0.1 – 0.3 0.1 – 0.5 Disposals – (0.3) (5.3) (1.3) – (6.9) Reclassifications 1.7 (0.2) 8.1 8.2 (17.8) – At 24 December 2022 73.1 108.1 206.4 264.2 59.7 711.5 Exchange adjustments – – (0.1) (0.4) (0.1) (0.6) Additions 2.1 12.0 17.6 39.1 33.0 103.8 Disposals – (1.7) (12.2) (2.3) – (16.2) Reclassifications 1.8 3.4 19.4 6.6 (31.2) – At 30 December 2023 77.0 121.8 231.1 307.2 61.4 798.5 Accumulated depreciation At 25 December 2021 (9.1) (29.6) (125.5) (118.4) – (282.6) Exchange adjustments – – (0.1) (0.1) – (0.2) Charge for the period (1.7) (5.1) (12.3) (17.4) – (36.5) Disposals – 0.3 4.9 1.3 – 6.5 At 24 December 2022 (10.8) (34.4) (133.0) (134.6) – (312.8) Exchange adjustments – – – 0.1 – 0.1 Charge for the period (1.9) (6.2) (13.9) (22.8) – (44.8) Disposals – 1.6 12.1 2.2 – 15.9 At 30 December 2023 (12.7) (39.0) (134.8) (155.1) – (341.6) Net book value at 30 December 2023 64.3 82.8 96.3 152.1 61.4 456.9 Net book value at 24 December 2022 62.3 73.7 73.4 129.6 59.7 398.7  continued (c) Software Accounting policy Directly attributable costs incurred for the development of computer software controlled by and for use within the business are capitalised and written off over their estimated useful lives, which are reviewed annually and which range between three and seven years. No amortisation is charged on assets under construction. Amounts paid to third parties for development of assets not controlled by the Group are expensed over the period where the Group receives the benefit of the use of these assets. Licence fees for using third-party software are expensed over the period the software is in use. Intangible assets Assets under in use construction TOTAL £m £m £m Cost At 25 December 2021 46.3 3.9 50.2 Exchange adjustments 0.1 – 0.1 Additions 1.8 6.5 8.3 Acquisition of subsidiary 0.3 – 0.3 Disposals (5.2) (0.1) (5.3) Reclassifications 2.5 (2.5) – At 24 December 2022 45.8 7.8 53.6 Additions 3.0 10.6 13.6 Disposals (1.4) – (1.4) Reclassifications 4.9 (4.9) – At 30 December 2023 52.3 13.5 65.8 Accumulated depreciation At 25 December 2021 (27.6) – (27.6) Exchange adjustments (0.1) – (0.1) Charge for the period (7.5) – (7.5) Disposals 5.1 – 5.1 At 24 December 2022 (30.1) – (30.1) Charge for the period (6.0) – (6.0) Disposals 1.4 – 1.4 At 30 December 2023 (34.7) – (34.7) Net book value at 30 December 2023 17.6 13.5 31.1 Net book value at 24 December 2022 15.7 7.8 23.5 176 177  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title  continued  Property leases treated as short-term leases when in the process of being renewed From time to time when renewing a property lease, the new lease may not be formally signed before the end date of the previous lease. In these circumstances, although both we and the landlord will have agreed our willingness to renew the lease in principle, and we may also have protection under property law which grants us the right to renew the lease, our interpretation of IFRS 16 is that there is no enforceable right to renew the lease until the new lease is formally signed. Therefore, we treat any lease payments made in this period between expiry and renewal as short-term lease payments under IFRS 16 and we expense them, taking advantage of the IFRS16 short-term lease exemption. Amounts treated as variable lease payments – rent reviews It is common for property leases to contain a clause whereby the rent is reviewed every five years and adjusted in line with prevailing market rates. The process of agreeing rent reviews can sometimes be a lengthy one, and some reviews are not agreed until after their effective date. In these cases we will continue to pay rent at the old rate until the rent review is agreed and neither the lease asset nor the lease liability is remeasured. If the new rent is agreed at a higher rate than the old rent, there will be a one-off payment to the lessor, covering the increase in rent for the period between the date from which the rent review was effective and the date on which the rent review was agreed. This payment is treated as a variable lease payment and is not included in the remeasurement of the lease liability. The lease asset and liability are remeasured from the rent review agreement date, based on the future agreed cashflows at the new agreed rent. Nature of the Group’s leasing activities Around 90% of our leases by value are for depot, warehouse, and office properties. A typical depot lease would be for a period of 10 to 15 years, with warehouse and factory leases being for significantly longer and typical office lease periods being shorter. We also lease other smaller assets such as fork lift trucks, lorries, vans and cars, with typical lease periods ranging up to around 5 years. Amounts recognised in the balance sheet 30 December 2023 24 December 2022 Right-of-use assets £m £m Property 591.7 565.6 Vehicles, plant & machinery 56.2 48.7 647.9 614.3 Additions to right-of-use assets in the period 122.9 141.6 30 December 2023 24 December 2022 Lease liabilities £m £m Current (85.3) (95.3) Non-current (599.2) (570.0) (684.5) (665.3)  continued 11 Lease right-of-use assets and lease liabilities Accounting policy We assess whether a lease exists at the inception of the related contract. If a lease exists, we recognise a right-of-use asset and a corresponding lease liability with effect from the date the lease commences. The lease liability The lease liability is initially measured at the present value of the lease payments due. As the discount rate inherent in our leases is not readily determinable, we use the Group’s incremental borrowing rate to discount the payments and arrive at net present value. The Group does not have a history of borrowing, and therefore it does not have a credit agency credit rating. Therefore, we derive the incremental borrowing rate by a process of: • discussion with our bankers to estimate a reasonable proxy credit rating for the Group; • using an independent third-party borrowing rate curve, giving indicative costs of borrowing for companies with a comparable credit rating over various durations, and • selecting borrowing rates from the appropriate points on that curve to best match the duration of our lease portfolios. Our leases are on relatively simple terms. Lease payments included in the measurement of the lease liability comprise fixed lease payments, less any lease incentives. We do not have variable lease payments which depend on an index, residual value guarantees, purchase options or termination penalties. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. We remeasure the lease liability (and make a corresponding adjustment to the related right-of-use asset) whenever: • the lease term has changed, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate; or • the lease payments have changed as a result of a change in an index, or, as is common with property leases, to reflect changes in market rental rates. In these cases, the lease liability is remeasured by discounting the revised lease payments using the initial discount rate. In any cases other than those described immediately above, where a lease contract is modified and the lease modification is not accounted for as a separate lease, the lease liability is remeasured by discounting the revised remaining lease payments using a revised discount rate. The lease liability is presented as a separate item in the balance sheet and is split between current and non-current portions. The lease right-of-use asset The right-of-use asset comprises the initial measurement of the corresponding lease liability and any initial direct costs of obtaining the lease. It is subsequently measured at cost less accumulated depreciation and any impairment losses. Whenever we incur an obligation for costs to restore a leased asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under IAS 37. Right-of-use assets are depreciated over the lease term, as this is always shorter than the useful life of the underlying asset. Depreciation starts at the commencement date of the lease. We do not have any leases that include purchase options or transfer ownership of the underlying asset. The right-of-use assets are presented as a separate line item in the balance sheet. Lease term It is uncommon for any of our leases to have extension options, although in the case of property leases it is common for us to enter into a new lease of the same property when the current lease expires. It is also uncommon for us to exit any leases before the end of their specified maximum term. Therefore we assume on inception that our leases will run to the maximum term in the lease agreement. 178 179  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title  continued  12 Inventories ! Estimation uncertainty – allowances against the carrying values of inventories In order to achieve the accounting objective that inventories are stated at the lower of cost and net realisable value, the Group carries an allowance against products which it estimates may not sell at a price above cost, or where we may be holding levels of product in excess of estimated future demand. The Group bases these estimates on regular reviews of stock levels, as well as of product lifecycles, selling prices achieved in the market and historical sales profiles of products after they have been discontinued. These estimates are regularly reviewed against actual experience, and revised to reflect any differences, but the accuracy of the estimates at any point in time can be affected by the extent to which current products may not follow historical patterns. Both the gross inventory balance and the amount of the allowance against carrying value are material items and we would expect this to remain the case as the Group grows in size, and as consumer demand for regular introductions of new product continues. We derive our allowance against carrying value based on specific kitchen ranges and stock items where a decision has been made to discontinue future sales, or where our monitoring of current sales indicates that the rate of sales is in decline and the product may be coming to the end of its life cycle. The level of judgement and estimation involved requires assessing the obsolescence risk across a high volume of SKUs, which can have different risk profiles. As such, the allowance is specific in nature and does not lend itself to meaningful sensitivity analysis in the same way as a figure which is derived by a general formula. The potential range of reasonable outcomes could be material. In the analysis of the allowance below, we have separately identified the aggregate gross value of stock against which an allowance has been made. Once a decision is made to discontinue future sales of a product, it will still be available for sale in depots for a standard period of time, after which any remaining units of that product will be removed from sale. Our stock allowance is calculated so that the carrying value of any unsold units is progressively written down to nil over the period during which they are available for sale. The rate at which the units are written down to nil is based on actual historical experience of realised selling prices for previous similar products, and recognises that higher selling prices are typically achievable at the beginning of the period than at the end of the period. Rates are reviewed regularly against historical experience and are adjusted if necessary. Accounting policy Inventories are stated at the lower of cost and net realisable value. In the case of manufactured inventories, cost includes an appropriate share of production overheads based on normal operating capacity, calculated using a standard cost which is regularly updated to reflect average actual costs. An allowance is made for obsolete, slow-moving, or defective items where appropriate. 30 December 2023 24 December 2022 £m £m Raw materials 28.0 24.3 Work in progress 9.5 6.2 Finished goods and goods for resale 394.9 396.3 Allowance against carrying value of inventories (49.6) (53.5) 382.8 373.3 The aggregate carrying amount of specific inventories against which allowances have been made is given below: 2023 2022 Gross value Allowance against Gross value Allowance against of stock carrying value of stock carrying value £m £m £m £m Stock with no allowance against it 338.3 – 323.3 – Stock with an allowance 94.1 (49.6) 103.5 (53.5) 432.4 (49.6) 426.8 (53.5)  continued Amounts recognised in the income statement 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Included in net operating expenses Depreciation of right-of-use assets: – property 72.7 65.4 – vehicles, plant & machinery 17.8 16.3 Impairment and net gain on lease termination (0.4) (0.9) Total – recognised in net operating costs 90.1 80.8 Expense relating to short-term leases 4.8 5.4 Variable lease payments, not included in the measurement of lease liabilities 2.6 2.9 Included in finance costs Interest expense on lease liabilities 16.8 13.1 Cash flows and maturity analysis of lease liabilities 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Total cash outflow for leases 121.8 79.2 Property leases are paid on the rent ‘quarter days’, which are 25 December, 25 March, 24 June and 29 September. Our 2022 financial year started on 26 December 2021, which means that there were only three rent payments in that year, whereas the 2023 financial year contained 5 quarter days and 5 rent payments. 30 December 2023 24 December 2022 £m £m Maturity analysis of lease liabilities Contractual undiscounted cashflows due – within 1 year 102.9 109.9 – 1 to 5 years 316.5 285.4 – more than 5 years 382.6 371.6 802.0 766.9 180 181  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title  continued  An ageing analysis of these past due trade receivables is as follows: 30 December 2023 24 December 2022 £m £m 1–30 days past due 21.4 22.6 31–60 days past due 6.8 6.1 61–90 days past due 3.9 3.8 90+ days past due 14.0 12.2 Total overdue amounts, excluding allowance for doubtful receivables 46.1 44.7 There were no trade receivables which would have been impaired at either period end were it not for the fact that their credit terms were renegotiated. The Group does not renegotiate credit terms. Cash and cash equivalents Cash and cash equivalents comprises cash at bank and on hand together with demand deposits. Cash at bank is either in current accounts, or is placed on short term deposit and is available on demand. Interest on short-term deposits is paid at prevailing money market rates. The carrying value of these assets approximates to their fair value.  14 Other financial liabilities Accounting policy Trade payables are not interest-bearing and are stated at their nominal value, which approximates to their fair value. Trade and other payables Current liabilities 30 December 2023 24 December 2022 £m £m Trade payables 174.5 189.5 Other tax and social security 70.4 91.9 Other payables 29.8 37.2 Accruals and deferred income 98.5 115.3 373.2 433.9 Trade payables, other payables, and accruals principally comprise amounts due in respect of trade purchases and ongoing costs. The average credit taken for trade purchases during the period, based on total operations, was 53 days (2022: 55 days). The Group’s policy on payment of creditors is to agree terms of payment prior to commencing trade with a supplier, and to abide by those terms on the timely submission of satisfactory invoices.  continued 13  Other financial assets Accounting policy Trade receivables do not contain a significant financing component and are stated at their nominal value, reduced by an allowance for expected credit losses. This approximates to their fair value. The Group applies the IFRS 9 simplified approach to measuring expected credit losses. This uses a lifetime expected loss allowance for all trade receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due. To determine expected credit losses, the Group uses historical observed default rates for these different groups of receivables, adjusted for forward-looking estimates. The default rates and forward-looking estimates are revised at each reporting date. Trade and other receivables 30 December 2023 24 December 2022 £m £m Trade receivables (net of allowance) 159.5 173.5 Prepayments 29.2 55.2 Other receivables 5.8 4.6 194.5 233.3 An analysis of the Group’s allowance for expected credit losses on debtors is as follows: 30 December 2023 24 December 2022 £m £m Balance at start of period 17.6 15.8 Acquired with subsidiary – 0.2 Increase in allowance recognised in the income statement 0.4 1.6 Balance at end of period 18.0 17.6 Trade receivables – exposure to credit risk and allowance for expected credit losses We have no significant concentration of credit risk, as our exposure is spread over a large number of customer accounts. We charge interest at appropriate market rates on balances which are in litigation. Before accepting any new credit customer, we obtain a credit check from an external agency to assess the potential customer’s credit quality, and then we set credit limits on a customer-by-customer basis. We review credit limits regularly, and adjust them if circumstances change. In the case of one-off customers, our policy is to require immediate payment at the point of sale, and not to offer credit terms. The historical level of customer default is low as a percentage of sales, and we consider the credit quality of period end trade receivables to be high. We regularly review trade receivables which are past due but not impaired, and we make an allowance against them based on any expected credit losses. We base our assessment both on past experience and also on whether there are any other likely significant future factors which might affect recoverability and influence our assessment of expected credit losses. We maintain regular contact with customers with overdue debts and, where necessary, we take legal action to recover the receivable. We wrote off £10.2m of debts in the period (2022: £7.9m). Included within our aggregate trade receivables balance are specific debtor balances with customers totalling £46.1m before allowance for expected credit losses (2022: £44.7m before allowance) which are past due as at the reporting date. We have assessed these balances for recoverability and we believe that their credit quality remains intact. 182 183  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title  continued  Warranty provision The warranty provision relates to the estimated costs of product warranties. As products are sold, the Group makes provision for claims under warranties, based on actual sales and on historical average warranty costs incurred. As claims are made, the Group utilises the provision and then uses the historical data on the rate and amount of claims to periodically revise our expectations of the amount of future warranty costs and therefore the rate at which it is appropriate to provide for warranty costs on each sale in the future. For the purposes of allocating this provision between current liabilities and non-current liabilities we have used the historical data on timing and amount of claims to estimate the costs for the next 12 months and have classified this as a current liability. Other Other miscellaneous small amounts. French post-employment benefits provision This provision relates to a benefit which is payable to employees in our French subsidiary under French law on retirement. It is a lump sum payable on retirement, not a recurring pension. There will only be an outflow from this provision if any of the eligible employees are employed by our French subsidiaries immediately before their retirement. The provision represents our best estimate of the potential liability and it is calculated based on several factors, mainly the age profile and salary details of the current workforce in France, and the current rate of staff turnover. The calculation to arrive at the best estimate of the required provision is revised periodically by third-party specialists and our provision is adjusted in line with the results of this calculation if necessary. We have assumed that the whole of this provision is non-current.  16 Share capital and reserves Ordinary shares of 10p each: 52 weeks to 24 52 weeks to 24 30 December 2023 December 2022 30 December 2023 December 2022 No. No. £m £m Allotted, called up and fully paid Balance at the beginning of the period 560,916,049 597,573,827 56.1 59.8 Bought back and cancelled during the period (7,324,329) (36,657,778) (0.7) (3.7) Balance at the end of the period 553,591,720 560,916,049 55.4 56.1 Share capital The Company has one class of ordinary share that carries no right to fixed income. The holders of ordinary shares are entitled to receive dividends as declared and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Company’s residual assets. Description of the nature and purpose of the other reserves shown in the balance sheet The capital redemption reserve represents the nominal value of share capital bought back and cancelled. The share premium reserve represents the premium above nominal value for any shares sold. The ESOP reserve relates to share-based payments and is explained at the foot of the statement of changes in equity. The treasury share reserve represents the cost of shares bought from the market and held in treasury. The retained earnings reserve represents the Group’s cumulative results.  continued 15 Provisions Accounting policy Provisions are recognised when the Group has a present obligation as a result of a past event, it is probable that the Group will be required to settle that obligation, and a reliable estimate can be made of the amount required to settle the obligation. Provisions are measured at the best estimate of the expenditure required to settle the obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation, and are discounted to present value where the effect is material. French post- employment Property Warranty Other benefits Total £m £m £m £m £m At 25 December 2021 7.0 10.9 2.2 0.3 20.4 Additional provision in the period 1.3 7.0 – – 8.3 Provision released in the period (1.6) – (1.4) – (3.0) Utilisation of provision in the period (1.7) (6.7) (0.8) – (9.2) At 24 December 2022 5.0 11.2 – 0.3 16.5 Additional provision in the period 1.5 4.0 0.2 – 5.7 Provision released in the period (1.6) – – – (1.6) Utilisation of provision in the period (1.1) (7.0) – – (8.1) At 30 December 2023 3.8 8.2 0.2 0.3 12.5 Presented as current liabilities 3.1 6.4 – – 9.5 Presented as non-current liabilities 0.7 1.8 0.2 0.3 3.0 At 30 December 2023 3.8 8.2 0.2 0.3 12.5 The basis of the allocation is outlined for each type of provision, below. Property provision The property provision covers obligations to make dilapidation payments to landlords of leased properties. Following the guidance in the IFRSs governing leases and provisions, our assessment is that, in general, the likelihood of a cash outflow for dilapidations at the time of signing a lease is remote, and therefore it would be unusual for us to recognise any costs relating to dilapidations at that time. In these cases, the event which changes our assessment of the likelihood of a cash outflow for dilapidations from being remote to being probable, and which therefore triggers our recognition of a provision for that probable outflow, typically occurs as we come towards the end of a lease and we can assess the condition of the leased property and the likelihood of dilapidations being payable. The timing of any outflows from the provision is variable, and is dependent on the timing of dilapidations assessments and works. Although circumstances will differ from property to property, a typical pattern would be that the outflow would occur within 1–3 years of the provision being made. The amounts provided are specific to each property and are based on our best estimate of the cost of performing any required works or, in cases where we will not be directly contracting for the works to be done, our best estimate of the outflow required to settle any claim from the landlord. Where the amounts involved are significant, we would typically take advice on the likely costs from third-party property maintenance specialists. For the purposes of allocating this provision between current liabilities and non-current liabilities we have used our best estimate of when we would reasonably expect outflows to occur, based on circumstances at each relevant property. 184 185  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title  continued  19 Borrowing facility Accounting policy Fees relating to borrowing facilities are recorded as prepayments and released over the life of the facility. At the period end date, the Group had a £150m committed multi-currency revolving credit facility, due to expire in September 2027. The Group did not use the facility in the year. As at 30 December 2023, the full £150m of the facility was available in addition to the Group’s cash as shown on the Balance Sheet. If the Group were to use the facility, it would carry interest at a rate of SONIA plus a margin of between 100 and 175 basis points, with the margin being dependent on the ratio of total net debt to EBITDA. The facility has two covenants, both of which are calculated on a 12 month rolling basis twice each year, at year end and then again at half year end. Under one covenant the ratio of EBITDA to net debt has to be less than 3:1, and under the other covenant the ratio of EBITDA to net finance charges has to be greater than 4:1. 20 Financial risk management (a) Capital risk management The Group manages its capital structure to maximise shareholder returns through its debt and equity balance, trading-off the benefits of financial leverage with the expected future costs of financial distress. The capital structure of the Group consists of cash and, from time to time, short term investments, the committed borrowing facility discussed further in note 19 – if needed – and equity attributable to equity holders of the parent (including issued share capital and reserves as disclosed in the Consolidated Statement of Changes in Equity, and in note 16). The Board of Directors reviews the capital structure regularly, including at the time of preparing annual budgets, preparing three-year corporate plans, and considering corporate transactions. As part of this review, the Board reviews the costs and the risks associated with each class of capital. The Group will balance its overall capital structure through the payment of dividends, new share issues and share buybacks, taking on or issuing new debt or repaying any existing debt. (b) Significant accounting policies Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are included in the relevant notes to the financial statements. An index to the notes is located between the cash flow statement and note 1. (c) Categories of financial instruments 30 December 2023 24 December 2022 £m £m Financial assets (current and non-current) Trade receivables 159.5 173.5 Cash and cash equivalents 282.8 308.0 Financial liabilities (current and non-current) Trade payables 174.5 189.5  continued 17 Dividends Amounts recognised as distributions to equity holders in the period: 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Final dividend for the 52 weeks to 25 December 2021 – 15.2p/share – 88.9 Interim dividend for the 52 weeks to 24 December 2022 – 4.7p/share – 26.1 Final dividend for the 52 weeks to 24 December 2022 – 15.9p/share 87.8 – Interim dividend for the 53 weeks to 30 December 2023 – 4.8p/share 26.3 – 114.1 115.0 Dividends proposed at the end of the period (but not recognised in the period): 53 weeks to 30 December 2023 £m Proposed final dividend for the 53 weeks to 30 December 2023 – (16.2p/share) 88.4 The Directors propose a final dividend in respect of the 53 weeks to 30 December 2023 of 16.2p per share, payable to ordinary shareholders who are on the register of shareholders at 12 April 2024, and payable on 24 May 2024. The proposed final dividend for the current period is subject to the approval of the shareholders at the 2024 Annual General Meeting, and has not been included as a liability in these financial statements. Dividends have been waived indefinitely on all shares held by the Group’s employee share trusts which have not yet been awarded to employees. 18 Notes to the cash flow statement Analysis of net cash Cash and cash Cash at bank Current asset equivalents, and in hand investments £m and net cash £m £m At 24 December 2022 308.0 – 308.0 Cash flow (25.2) – (25.2) At 30 December 2023 282.8 – 282.8 Changes in liabilities arising from financing activities The only liabilities which have changed due to financing activities are lease liabilities. The cash and non-cash changes in lease liabilities are analysed below: 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Opening balance (665.3) (591.2) Cash movement: repayment of principal on lease liabilities 105.0 66.1 Cash movement: lease interest paid 16.8 13.1 Non cash movement: net additions to lease liabilities (141.0) (153.3) Closing balance (684.5) (665.3) 186 187  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title  continued  (f) Liquidity risk  Liquidity risk is the risk that the we could experience difficulties in meeting our commitments to creditors as financial liabilities fall due for payment. The Group manages its liquidity risk by using reasonable and retrospectively-assessed assumptions to forecast the future cash-generative capabilities and working capital requirements of the businesses it operates and by maintaining sufficient cash and investment reserves, committed borrowing facilities and other credit lines as appropriate. Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has agreed an appropriate liquidity risk management framework for the management of the Group’s short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities as far as is possible. Included in note 19 is a description of additional undrawn facilities that the Group has at its disposal to further reduce liquidity risk. In addition, the Strategic Review contains a section describing the interaction of liquidity risk and the going concern review. Maturity profile of outstanding financial liabilities Our only outstanding financial liabilities, other than leases, are our trade creditors. These are capital liabilities, with no associated interest, and are payable within one year. Our lease liabilities are disclosed at note 11.  (g) Market risk This is the risk that financial instrument fair values will fluctuate owing to changes in market prices. The significant market risks to which we are exposed are foreign exchange risk, and interest rate risk. These are discussed further below: Foreign exchange risk We are exposed to foreign exchange risk, principally as a result of operating costs incurred in foreign currencies, and to a lesser extent, from non-sterling revenues. Our policy is generally not to hedge such exposures. The exposure of the our financial assets and liabilities to currency risk is as follows: 30 December 2023 24 December 2022 £m £m Euro Trade receivables 8.4 9.4 Other receivables 3.1 3.9 Cash and cash equivalents 57.7 56.7 Trade payables (35.4) (43.4) Other payables (4.6) (7.3) 29.2 19.3 US Dollar Other receivables – 1.1 Cash and cash equivalents 19.7 25.3 Trade payables (0.8) (1.1) 18.9 25.3 TOTAL 48.1 44.6 Interest rate risk The Group does not have any significant exposure to interest rate risk.   continued (d) Financial risk management General The Group is exposed in varying degrees to a variety of financial instrument related risks. The Board has approved and monitors the risk management processes, including documented treasury policies, counterparty limits, and controlling and reporting structures. The types of risk exposure, the way in which these exposures are managed, and the quantification of the level of exposure in the balance sheet is shown below (subcategorised into credit risk, liquidity risk and market risk). The Group is actively engaged in the management of all of these financial risks in order to minimise their potential adverse impact on the Group’s financial performance. The principles, practices and procedures governing the Group-wide financial risk management process have been approved by the Board and are overseen by the Executive Committee. In turn, the Executive Committee delegates authority to a central treasury function (‘Group Treasury’) for the practical implementation of the financial risk management process across the Group and for ensuring that the Group’s entities adhere to specified financial risk management policies. Group Treasury regularly reassesses and reports on the financial risk environment, identifying and evaluating financial risks. The Group does not take positions on derivative contracts and only enters into contractual bank deposit or lending arrangements with counterparties that have appropriate credit ratings, as detailed in section (e) below. Cash and cash equivalents Cash at bank and in hand, which is the term used in the balance sheet, comprises cash on hand together with demand deposits, and other short term highly liquid investments that are readily convertible to a known amount of cash, and are subject to an insignificant risk of changes in value. Cash and cash equivalents, which is the term used in the cash flow statement, comprises cash at bank and in hand, as defined immediately above, together with any current asset investments. Arrangements are in place to ensure that cash is utilised most efficiently for the ongoing working capital needs of the Group’s operating units and to ensure that the Group earns the most advantageous rates of interest available. The prime consideration in the investment of cash balances is the security of the asset, followed by liquidity and then yield. Current asset investments consist of UK Government Treasury Bills with an initial term to maturity of up to three months. These investments are held to maturity and, whilst of lower liquidity than cash, will ensure that the primary Group policy objective of asset security is met. Management of trade receivables is discussed in note 13. (e) Credit risk The Group’s principal financial assets are cash, investments, and trade and other receivables. Our main credit risk is the risk of trade customers defaulting their debts. We have a policy of only dealing with creditworthy counterparties in order to mitigate the risk of defaults. We describe our policy on dealing with trade customers in note 13. Trade receivables are spread over a large number of customers, and we do not have a significant exposure to any single counterparty. We limit our exposure to credit risk on liquid funds and investments through adherence to a policy of minimum short-term counterparty credit ratings assigned by international credit-rating agencies (Standard & Poor’s A-1 and Moody’s P-1). However, when accounts are opened in new territories there may be instances where there is no appropriate partner which meets the Group’s credit rating conditions. In such circumstances, arrangements with a counterparty which does not meet the Group’s credit rating criteria can be made only at the specific approval of the Board and is subject to a maximum cash holding limit. In addition, the Group Treasury function monitors counterparty risk through credit agency ratings. Our maximum exposure to credit risk is presented in the following table: 30 December 2023 24 December 2022 £m £m Trade receivables (net of allowance) 159.5 173.5 Cash 282.8 308.0 Total credit risk exposure 442.3 481.5 188 189  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title  continued   21 Staff costs and number of employees The aggregate payroll costs of employees, including executive directors, were: 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Wages and salaries (561.4) (536.3) Social security costs (49.8) (47.8) Pension operating costs (note 22) (44.8) (40.0) (656.0) (624.1) Wages and salaries includes a charge in respect of share-based payments of £6.0m (2022: £7.3m). The average monthly number of persons (including executive directors) employed by the Group during the period was as follows: 53 weeks to 52 weeks to 30 December 2023 24 December 2022 No. No. UK depots, support and administration 9,417 9,581 Manufacturing and logistics 2,288 2,262 International 707 565 12,412 12,408 22 Retirement benefit obligations ! Significant judgement and source of estimation uncertainty There is significant judgement involved in selecting appropriate measurement bases for the actuarial assumptions used to measure the pension liability. There is also estimation uncertainty relating to the assumptions, as reasonable alternative assumptions could have led to measurement at a materially different amount. The key assumptions within this calculation are discount rate, inflation rates and mortality rates. These are set out below, together with sensitivity analysis that shows the effect that these estimates can have on the carrying value of the pension deficit.  continued (h) Financial instrument sensitivities Financial instruments affected by market risk include deposits, trade receivables and trade payables. The following analysis, required by IFRS 7, is intended to illustrate the sensitivity of the Group’s financial instruments as at its year end to changes in market variables, being exchange rates and interest rates. The sensitivity analysis has been prepared on the basis that the components of net cash and the proportion of financial instruments in foreign currencies are all constant. For floating rate liabilities, the analysis is prepared assuming that the amount of liability outstanding at the year end date was outstanding for the whole year. As a consequence, this sensitivity analysis relates to the position as at the balance sheet date. The following assumptions were made in calculating the sensitivity analysis: • Deposits are carried at amortised cost and therefore carrying value does not change as interest rates move. • No sensitivity is provided for accrued interest as accruals are based on pre-agreed interest rates and therefore are not susceptible to further rate movements. • Finance lease interest payments are fixed at the inception of the contract and are not subject to repricing. They have therefore been excluded from this analysis. • Translation of foreign subsidiaries and operations into the Group’s presentation currency have been excluded from the sensitivity. Using the above assumptions, the following analyses show the illustrative effect on the income statement and equity that would result from reasonably possible changes in the relevant foreign currency or interest rates: Interest rate sensitivity The sensitivity analysis below has been determined based on the exposure to interest rates for floating rate non-derivative instruments at the balance sheet date. The Group holds no derivative financial instruments. Fixed rate liabilities are not susceptible to changes in interest rates, and are omitted from the analysis below. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the balance sheet date was outstanding for the whole year. A 50 basis points increase is used as this represents management’s assessment of the possible change in interest rates. At the reporting date, if interest rates had been 50 basis points higher and all other variables were held constant, the Group’s net profit and profit and loss reserve would increase by £0.6m (2022: increase by £0.6m). For a decrease of 50 basis points, the current year figures would decrease by £0.9m (2022: decrease by £0.6m). As noted above, the Group is mainly exposed to movements in Euro and US dollar exchange rates. The following information details our sensitivity to a 10% weakening or strengthening in Sterling against the Euro and the US Dollar. These percentages are the rates used by management when assessing sensitivities internally and represent management’s assessment of the possible change in foreign currency rates. The sensitivity analysis of our exposure to foreign currency risk at the reporting date has been determined based on the change taking place at the end of the financial period, and based on the outstanding foreign currency balances at the period end. 30 December 2023 24 December 2022 £m £m 10% weakening of Sterling to Euro 3.2 2.1 10% strengthening of Sterling to Euro (2.7) (1.7) 10% weakening of Sterling to US dollar 2.1 2.8 10% strengthening of Sterling to US dollar (1.7) (2.3) 190 191  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title  continued  An example of inflation risk is that an increase in inflation results in higher benefit increases for members which in turn increases the Scheme’s liabilities. Investment risk comes from three main sources: risk that the fund will fall in value, risk that the pension fund’s returns will not keep pace with inflation (i.e. that real returns are negative), and risk that the pension fund does not perform well enough to keep pace with the growth in the cost of providing pension benefits. A description of how the plan’s asset allocation strategy seeks to address some of these risks is given below in the ‘Asset allocation’ section. Accounting and actuarial valuation Contributions are charged to the consolidated income statement so as to spread the cost of pensions over the employees’ working lives with the Group. The present value of the defined benefit obligation is determined by a qualified actuary using the projected unit method. The most recent completed actuarial valuation was carried out at 5 April 2023 by the plan actuary. The actuary advising the Group has subsequently rolled forward the results of the 5 April 2023 valuation to 30 December 2023. This roll-forward exercise involves updating all the assumptions which are market-based (i.e. inflation, discount rate, rate of increase in pensions and rate of CARE revaluation) to values as at 30 December 2023. We are using CMI 2022 mortality tables, being the most recent tables available. Funding and estimated contributions The Group’s contributions in the current and prior periods are shown in the tables below. The Group bears the plan’s administration costs. The Group also has an agreement with the pension plan trustees to make additional deficit contributions to the plan of £1m per month until 31 May 2026, if the plan is underfunded on the Technical Provisions (‘TP’) basis. Under the agreement, the scheme’s funding position is monitored on a monthly basis and deficit contributions are suspended if the scheme’s funding position is 100% or greater as at the last working day of two consecutive months on a TP basis, and is resumed if the funding position subsequently falls back to below 100% on the last working day of two consecutive months. The Group’s estimated total cash contributions to the defined benefit plan in the 52 weeks ending 28 December 2024 are £12.2m. This figure allows for additional deficit contributions for the whole of 2024 at the maximum rate of £1m per month. As noted in the paragraph above, additional deficit contributions may cease and recommence during the year, depending on the scheme’s funding position. Differences between the defined benefit pension deficit on an IAS 19 basis and on a funding basis As is mandatory under International Financial Reporting Standards, the Group values its pension deficit in these accounts on an IAS19 basis. As shown below, the IAS19 deficit at the current period end is £12.6m. On a funding basis (also known as a ‘Technical Provisions basis’, being the basis on which the triennial actuarial valuations are carried out), the funding deficit at the current period end is estimated at £9.1m, this estimate being based on an approximate roll-forward of the 2023 triennial funding valuation, updated for market conditions. The IAS 19 valuation requires ‘best estimate’ assumptions to be used whereas the funding valuation uses ‘prudent’ assumptions. (b) Total amounts charged in respect of pensions in the period 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Charged to the income statement: Defined benefit plan – administration cost 2.3 2.4 Defined benefit plan – total service cost 2.3 2.4 Defined benefit plan – net finance charge/(credit) 1.3 (2.7) Defined contribution plans – total operating charge 42.5 37.6 Total net amount charged to profit before tax 46.1 37.3 Charged to equity: Defined benefit plan – actuarial (gains)/losses (13.3) 183.0 Total charge/(credit) 32.8 220.3  continued Accounting policies Defined contribution pensions Payments to defined contribution pension schemes are charged to the income statement as they fall due. Defined benefit pensions The calculation of the Group’s net asset or obligation is performed by a qualified actuary using the projected unit method. When the calculation results in a potential asset, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements. The Group considers that there are no restrictions caused by IFRIC 14 on recognising any pension surplus as the trustee does not have the unilateral power to either enhance member benefits or to wind up the scheme and distribute any surplus to members and therefore any surplus remaining once the final scheme benefits are paid to members would be returned to the Group under scheme rules. Scheme liabilities are calculated by estimating the amount of future benefit that employees have earned in return for their service. That benefit is then discounted to determine its present value. The discount rate used is selected to closely approximate the yield at the balance sheet date on AA-rated bonds that have maturity dates approximating to the terms of the Group’s obligations. This discount rate is also used to calculate the net pension scheme finance charge or credit. Scheme assets are carried at fair value. More details are given in this note as part of the analysis of plan assets. The Group determines the net interest on the net defined benefit liability/(asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net defined benefit liability/(asset). Remeasurements arising from defined benefit plans comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest). The Group recognises them immediately in other comprehensive income and all other expenses related to defined benefit plans in employee benefit expenses in profit or loss. (a) Overview of all retirement benefit arrangements Defined contribution plans The Group operates an auto-enrolment defined contribution plan for employees. Under the terms of this scheme, employees make pension contributions out of their salaries, and the Group also makes additional contributions. There is also a defined contribution plan relating to the defined benefit plan described below. This plan closed at the same time as the defined benefit plan and the company had no further cost obligations after it closed. The total cost charged to income in respect of defined contribution pensions in the current period of £42.5m (2022: £37.6m) This represents the Group’s contributions due and payable in respect of the period, as was also the case in the previous period. Defined benefit plan Characteristics and risks of the plan: The Group operates a funded pension plan which provides benefits based on the career average pensionable pay of participating employees. This plan was closed to new entrants from April 2013, and closed to future accrual on 31 March 2021. The assets of the plan are held separately from those of the Group, being held in a trustee-administered pension plan and invested with independent fund managers. The trustee directors of the plan comprise three member-elected trustees, two independent trustees, and three Group-appointed trustees. All trustees are required to act in the best interests of the plan beneficiaries. The plan exposes the Group to actuarial risks, such as longevity risk, interest rate risk, inflation risk and market (investment) risk. Longevity risk is the risk that members live for longer than is currently expected. That results in pensions being paid for longer than expected, thus costing schemes more. Examples of interest rate risk are that a decrease in corporate bond yields increases the present value of the defined benefit obligations, and that a decrease in gilt yields results in a worsening in the Scheme’s funding position. 192 193  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title  continued  Analysis of plan assets 30 December 2023 24 December 2022 No quoted market No quoted market Quoted market price price in an active Quoted market price price in an active in an active market market in an active market market £m £m £m £m LDI  – fixed income 282.9 – 270.0 – – derivatives 20.5 – (268.7) – – cash 12.7 – 172.8 – Equities – passive equities – 49.8 – – Private equity – – – 0.6 Alternative growth assets – fund of hedge funds – – – 152.4 – absolute return fund – – 1.0 – Insurance-linked securities – 70.8 – 105.2 Corporate bonds 0.1 – 1.8 – Commercial property funds – 233.4 7.7 239.9 Other secure income 60.0 161.9 1.2 179.3 Asset-backed securities 0.5 – 0.5 – Cash and cash equivalents 8.3 – 25.3 – Total 385.1 515.9 211.6 677.4 The plan assets do not include any of the Group’s own financial instruments nor any property occupied by, or other assets used by, the Group.  * LDI – Liability Driven Investments – is a portfolio of investments chosen with the aim that its value is expected to move in line with movements in the value of the underlying liabilities. The LDI portfolio can include a variety of investments, the simplest being conventional and index-linked gilts with appropriate maturities. LDI portfolios often use a degree of leverage to achieve the same aim but to allow more return-seeking assets to be invested in at the same time. Derivatives and repurchase agreements are the main tools used to employ leverage. Valuation of plan assets All of the quoted assets have a daily price, and therefore are valued using market prices within one day of our Saturday year end date. Unquoted investments are stated at values provided by the fund manager in accordance with relevant guidance. Some of the unquoted funds are valued on a weekly basis, some are valued on a monthly basis, and others are only valued on a quarterly basis. Based on asset values at the current year end, 13% of the unquoted assets are valued based on a valuation from the fund manager within one day of our year end date, and a further 22% are valued at 30 November 2023, adjusted for cash movements and rolled forwards using a suitably-correlated index if one is available. The fund managers’ 31 December 2023 valuations for the remaining 65% of unquoted assets, which have a carrying value of £303.1m at the current period end, are not available until after these consolidated financial statements are prepared and so the only available valuations for these funds at the current year end is the 30 September 2023 valuations from the fund managers, which are adjusted for cash movements and rolled forward to our year end date using a suitably-correlated index where one is available.  continued (c) Other information – defined benefit pension plan Key assumptions used in the valuation of the plan 53 weeks to 52 weeks to 30 December 2023 24 December 2022 Discount rate 4.55% 4.70% Inflation assumption – RPI 3.05% 3.15% Inflation assumption – CPI 2.60% 2.70% Rate of increase of pensions in deferment capped at lower of CPI and 5% 2.60% 2.70% Rate of CARE revaluation capped at lower of RPI and 3% 2.40% 2.45% Rate of increase of pensions in payment: – pensions with increases capped at lower of CPI and 5% 2.60% 2.65% – pensions with increases capped at lower of CPI and 5%, with a 3% minimum 3.40% 3.45% – pensions with increases capped at the lower of LPI and 2.5% 2.15% 2.15% – pensions with increases capped at the lower of CPI and 3% 2.20% 2.25% Life expectancy (years): pensioner aged 65 – male 85.7 86.6 – female 88.0 88.4 Life expectancy (years): non-pensioner aged 45 – male 86.7 87.6 – female 89.6 90.2 Sensitivities Projected 2024 pension cost Present value of scheme liabilities at Net interest Net pension 30 December 2023 Total service cost (credit)/cost (credit)/expense £m £m £m £m Assumption Current valuation, using the assumptions above 914 2.1 0.3 2.4 0.5% decrease in discount rate 979 2.1 2.9 5.0 0.5% increase in inflation 945 2.1 1.7 3.8 1 year increase in longevity 946 2.1 1.7 3.8 The sensitivities above are applied to the defined benefit obligation at the end of the reporting period, and the projected total service cost for 2024. Whilst the analysis does not take account of the full distribution of cash flows expected under the scheme, it does provide a reasonable approximation. The same amount of movement in the opposite direction would produce a broadly equal and opposite effect. To address the requirements of both IAS 1 and IAS 19, we note that the effect on the discount rate and inflation sensitivities of flexing them down by 0.25% or up by 1% in a linear manner would give materially correct results. 194 195  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title  continued  Analysis of plan members, scheme liability split and duration 2023 No. of members % of total liability Duration (years) Deferred members 5,905 52% 17 Pensioners 4,428 48% 11 Total No./average duration 10,333 100% 14 1 1  The membership figures are as given in the plan accounts and are as at 31 March 2023, the date of the latest audited pension plan accounts. The duration and % of liability figures are as calculated by the Group’s actuary as at the Group’s year end. 2022 No. of members % of total liability Duration (years) Deferred members 6,236 63% 19 Pensioners 4,233 37% 11 Total No./average duration 10,469 100% 16 2 1  The membership figures are as given in the plan accounts and are as at 31 March 2022, the date of the audited pension plan accounts. The duration and % of liability figures are as calculated by the Group’s actuary as at the Group’s year end. Balance sheet The amount included in the balance sheet arising from the Group’s obligations in respect of defined benefit retirement benefit plan is as follows: 30 December 2023 24 December 2022 £m £m Present value of defined benefit obligations (913.6) (930.5) Fair value of scheme assets 901.0 889.0 Deficit in the scheme, recognised in the balance sheet (12.6) (41.5) Movements in the present value of defined benefit obligations were as follows: 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Present value at start of period 930.5 1,512.5 Administration cost 2.3 2.4 Interest on obligation 42.8 28.3 Actuarial losses/(gains): – changes in financial assumptions 14.2 (622.8) – changes in demographic assumptions (26.5) (3.5) – experience (9.2) 55.8 Benefits paid, including expenses (40.5) (42.2) Present value at end of period 913.6 930.5  continued Asset allocation The plan’s asset allocation strategy, as set out in the plan’s August 2023 Statement of Investment Principles, is set out below: The Plan’s asset allocation strategy was determined with regard to the characteristics of the Plan, in particular the funding level, the liability profile, the security offered by Howden Joinery Group plc to the Plan and the ability of Howden Joinery Group plc to meet the required contributions. The objective is to reduce risk as the funding level improves, using an approach based upon the expected returns (and risk) relative to the Plan’s liabilities. This involves considering the Plan’s assets as either ‘return seeking’ or ‘risk-reducing’. ‘Return-seeking’ assets target a higher expected return than that of risk reducing/matching assets and typically have a higher associated volatility, relative to liabilities. These assets would typically involve equities and could possibly include alternative asset classes such as different types of absolute return and hedge funds, infrastructure, property and illiquid credit approaches. Assets used to predominantly manage liquidity and cashflows within the Secure Income portfolio are also deemed ‘Return-seeking’. ‘Risk-reducing’ (or matching) assets have characteristics that are broadly similar in nature to the liabilities. These assets are government or corporate bonds and other financial instruments such as interest rate and inflation swaps, credit default swaps and cash. The Plan will initially have asset allocations as set out below but over time will move towards the target weight (particularly as the Secure Income assets return capital over the coming years).The plan’s accounts explains these classes of assets as follows: Asset class Initial weighting Target weighting Range % % % RETURN-SEEKING ASSETS 65 60 50–70 – Global equities 5 5 0–10 – Absolute return 7 7 2–12 – Multi-asset credit 3 8 0–13 – Secure income assets 50 40 30–50 RISK-REDUCING ASSETS 35 40 30–50 The Risk-Reducing Assets will be initially structured to target interest rate and inflation hedge ratios of 65% (as a proportion of funded liabilities), measured on the Plan’s long term liability basis. This section of the portfolio also provides exposure to credit markets via credit default swaps. The level of liability hedging will increase over time as the Secure Income assets return capital and the overall liquidity of the portfolio is able to support higher hedging levels. The Trustee will monitor the actual asset allocation versus the target weightings and the ranges at regular intervals. The Trustee recognises that from time to time the actual asset allocation may move outside the ranges due to market movements and will consider whether to rebalance back to the target weightings, taking into account current market conditions and medium-term market views. 196 197  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title  continued  Statement of comprehensive income Amounts taken to equity via the statement of comprehensive income in respect of the Group’s defined benefit plan are shown below: 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Actuarial loss on plan assets (8.2) (753.5) (Increase)/decrease in plan liabilities due to financial assumptions (14.2) 622.8 Decrease/(increase) in plan liabilities due to experience 9.2 (55.8) Decrease in plan liabilities due to demographic assumptions 26.5 3.5 Net actuarial gain/(loss) before associated deferred tax 13.3 (183.0) 23 Share-based payments Accounting policy The Group issues equity-settled share-based payments as employee incentives. They are measured at fair value at the date of grant. The fair value is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest. 1) Details of each scheme The Group recognised a charge of £6.0m (2022: charge of £7.3m) in respect of share-based payments during the period. The Group has various share-based payment schemes, which are all equity-settled. The main details of all schemes which existed during the period are given below. Share Incentive Plan (‘SIP’) This is a UK tax-advantaged ‘all-employee’ share plan under which the Company may grant the following types of awards to eligible UK employees: (i) Free Shares, the vesting and forfeiture period is three years commencing on the date of grant and subject to continued employment. The shares are not subject to any performance conditions. Dividends are payable on the Free Shares during the vesting period. Voting rights are attached to Free Shares during the vesting period. (ii) Partnership Shares, which do not have a vesting period as they are purchased using deductions from the gross pay of participating employees. The shares are not subject to any performance conditions. Dividends are payable on the Partnership Shares from grant. Voting rights are attached to Partnership Shares from grant. (iii) Matching Shares, the vesting and forfeiture period for which is three years commencing on the date of grant and subject to continued employment and retention of the associated Partnership Shares in the SIP trust. Matching Shares are granted to participants in a ratio determined by the Company up to a maximum of two free Matching Shares for each Partnership Share purchased. Matching Shares are not subject to any performance conditions. Dividends are payable on the Matching Shares during the vesting period. Voting rights are attached to Matching Shares during the vesting period. (iv) Dividend Shares, which do not have a vesting period as they are purchased using dividend monies payable on existing SIP shares held in the SIP trust. The shares are not subject to any performance conditions. Dividends are payable on the Dividend Shares from grant. Voting rights are attached to Dividend Shares from grant. Free Shares, Partnership Shares, and Matching Shares must be kept in the SIP trust for five years from the date of grant to be capable of being sold or transferred out of the SIP trust free of income tax and National Insurance contributions (exceptions apply for ‘good leaver’ scenarios). Dividend Shares must be held in the SIP trust for three years from the date of grant to be capable of being sold or transferred out of the SIP trust free of income tax liability.  continued Movements in the fair value of the plan’s assets is as follows: 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Fair value at start of period 889.0 1,653.3 Interest income on plan assets 41.5 31.0 Employer contributions 19.2 0.4 (Loss)/return on assets excluding amounts included in net interest (8.2) (753.5) Benefits paid, including expenses (40.5) (42.2) Fair value at end of period 901.0 889.0 Movements in the deficit during the period are as follows: 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Deficit at start of period (41.5) 140.8 Administration cost (2.3) (2.4) Employer contributions 19.2 0.4 Other finance (charge)/income (1.3) 2.7 Total remeasurements recognised in other comprehensive income 13.3 (183.0) Deficit at end of period (12.6) (41.5) Income statement Amounts recognised in the income statement arising from the Group’s obligations in respect of the defined benefit plan are shown below. Amount charged to operating profit: 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Current service cost – – Administration cost 2.3 2.4 Total pensions cost 2.3 2.4 The total pensions cost is included in Staff Costs (note 21). Amount credited to other finance income or expense: 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Interest income on plan assets (41.5) (31.0) Interest cost on defined benefit obligation 42.8 28.3 Net finance expense/(income) 1.3 (2.7) The actual return on plan assets was a gain of £33.5m (52 weeks to 24 December 2022: loss of £722.5m). 198 199  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title  continued  Date of award 2023 Performance Conditions: Total shareholder returns (e ‘TSR tranche’presents the following proportion of the Award: 20% –TSR tranche vests at 15% if the Company is ranked compared to comparators at Equal to median – TSR tranche vests at 100% if the Company is ranked compared to comparators in the The TSR tranche Performance Period is from year ended December 2022 to year ended December 2025. Upper quartile Growth in pre-exceptional profit before tax (PBT) (the ‘PBT tranche’) represents the following proportion of the Award: 60% – PBT tranche vests at 15% if PBT for year ended 2025 is £400m – PBT tranche vests at 100% if PBT for year ended 2025 is The PBT tranche Performance Period is from year ended December 2022 to year ended December 2025. £484m Return on capital employed (ROCE) (the ‘ROCE tranche’) represents the following proportion of the Award: 10% –ROCE tranche vests at 15% if ROCE over the Performance Period is 25% – ROCE tranche vests at 100% if ROCE over the Performance Period is The ROCE tranche Performance Period is from year ended December 2022 to year ended December 2025. 30% Environmental measures (gether, the ‘Env. tranche’) represent the following proportion of the Award: 10% – Reducing Scope 1 and Scope 2 carbon emissions relative to PBT performance:   7.5% of the Env. tranche will vest if carbon emissions between 31 December 2021 and 31 December 2025 are reduced by 33.3% of the Env. tranche will vest if carbon emissions between 31 December 2021 4.0% and 31 December 2025 are reduced by – Reducing UK Primary fleet emissions: 4.2%   7.5% of the Env. tranche will vest if Primary fleet emissions are reduced between 25 December 2021 and 27 December 2025 by 33.3% of the Env. tranche will vest if Primary fleet emissions are reduced between 12% 25 December 2021 and 27 December 2025 by – Achieving carbon neutral status across manufacturing sites: 15% This portion of the Env. tranche will not vest where only the following number of sites achieve carbon neutral status by 31 December 2025 Two sites   33.3% of the Env. tranche will vest where the following number of sites achieve carbon neutral status by 31 December 2025 Four sites –A target minimum average over three years of 99% waste avoiding landfill across UK operations will apply, which, if not achieved, will result in a downward modifier to the outcome under the Env. tranche. Vesting under the various measures above is determined on a straight-line basis between threshold and maximum payout. (iv) Restricted Share Awards, where the participant receives beneficial entitlement to shares upon grant of the award. The legal interest, however, is not transferred to the participant until the forfeiture provisions and restrictions applicable to the awards cease to apply. The shares are not subject to any performance conditions other than continued employment. Dividends are payable during the vesting period.  continued Howden Joinery Group Long-Term Incentive Plan (‘LTIP’) This is a discretionary employee share plan under which the Company may grant different types of award including options, conditional awards, and restricted share awards. With the exception of (iv) below, neither dividends nor dividend equivalents are payable during the vesting period. The different types of awards are as follows: (i) Conditional Share Awards, the vesting period for which is usually three years commencing on the date of grant and subject to continued employment. The shares are not subject to any other performance conditions. (ii) Market value options, the vesting period for which was three years commencing from the date of grant with an exercise period of seven years (i.e. a total life of ten years). The vesting conditions for these options were as follows: Date of award 2013 Vesting based on growth in profits – from year ended December 2012 – to year ended December 2015 Award vests at 25% if profits over the vesting period grow by 6% Award vests at 100% if profits over the vesting period grow by 12% Date of award 2014 Vesting based on growth in profits – from year ended December 2013 – to year ended December 2016 Award vests at 15% if profits over the vesting period grow by 8% Award vests at 100% if profits over the vesting period grow by 20% If profits grew by a figure between the upper and lower thresholds for each year, the award vested on a sliding scale. (iii) Performance Share Plan, the vesting period for which is normally three years commencing from the date of grant. The awards are subject to the following performance conditions: Date of award 2018 2019 Vesting based on growth in profits – from year ended December 2017 2018 – to year ended December 2020 2021 Award vests at 15% if profits over the vesting period grow by 5% 5% Award vests at 100% if profits over the vesting period grow by 15% 15% Date of award 2020 2021 2022 Performance Period – from year ended December 2019 2020 2021 – to year ended December 2022 2023 2024 Performance Conditions: Total shareholder return (TSR tranche’) represents the following proportion of the Award 67% 33% 33% –TSR tranche vests at 15% if the Company is ranked compared to comparators at – TSR tranche vests at 100% if the Company is ranked Median Median Median compared to comparators in the Growth in pre-exceptional profit before tax (he ‘PBT tranche’ Upper quartile Upper quartile Upper quartile represents the following proportion of the Award 33% 67% 67% –PBT tranche vests at 15% if profit grows over the Performance Period grow by – PBT tranche vests at 100% if profit grows 5% 5% 5% over the Performance Period grow by 15% 15% 15% 200 201  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title  continued  52 weeks to 24 December 2022 SIP (i) LTIP (i) LTIP (iii) LTIP (iv) Number Number Number Number In issue at start of period 2,253,629 – 3,324,679 13,646 Granted in period 359,104 382,200 1,080,204 – Lapsed in period (102,785) – (38,868) – Exercised in period (436,287) – (1,299,808) (13,646) In issue at end of period 2,073,661 382,200 3,066,207 – Exercisable at end of period 1,130,011 – 67 – Number of options in the closing balance granted before 7 November 2002 14,028 – – – Weighted average share price for options exercised during the period (£) 7.10 N/A 6.92 7.79 Weighted average life remaining for options outstanding at the period end (years) 1.27 2.73 1.41 N/A Weighted average fair value of options granted during the period (£) 7.71 5.27 6.24 N/A Exercise price for all options (£) 0.00 0.00 0.00 0.00 LTIP (ii) SIP (iii) Number WAEP (£) Number In issue at beginning of period 307,429 3.17 18,577 Granted in period – N/A 73,576 Lapsed in period – N/A (12,324) Exercised in period (67,083) 2.04 (558) In issue at end of period 240,346 3.48 79,271 Exercisable at end of period 240,346 3.48 – Number of options in the closing balance granted before 7 November 2002 – – – Weighted average share price for options exercised during the period (£) 7.62 – 6.34 Weighted average life remaining for options outstanding at the period end (years) 0.00 – 2.42 Weighted average fair value of options granted during the period (£) N/A – 6.50 Exercise price for all options (£) 2.38 to 3.79 – 0.00 3) Fair value of options granted The fair value of most of the share awards is considered to be the market value of the potential shares awarded, at market close on the day before the grant of the award. The fair value of the Performance Share Plan (‘LTIP (iii) above) awards granted is estimated on the date of grant using a Monte Carlo option valuation model. The key assumptions used in this model were: 53 weeks to 52 weeks to 30 December 2023 24 December 2022 Dividend yield (%) 3.4 1.8 to 3.4 Expected life of options (rs) 3 3 Expected share price volatility ( 30.5 32.2 to 32.3  continued 2) Movements in the period 53 weeks to 30 December 2023 SIP (i) LTIP (i) LTIP (iii) LTIP (iv) Number Number Number Number In issue at start of period 2,073,661 382,200 3,066,207 – Granted in period 393,295 105,000 953,327 12,854 Lapsed in period (74,665) (25,423) (777,627) – Exercised in period (467,695) – (448,629) – In issue at end of period 1,924,596 461,777 2,793,278 12,854 Exercisable at end of period 1,009,826 – 67 – Number of options in the closing balance granted before 7 November 2002 12,692 – – – Weighted average share price for options exercised during the period (£) 6.96 N/A 7.37 N/A Weighted average life remaining for options outstanding at the period end (years) 1.0 1.8 1.3 0.6 Weighted average fair value of options granted during the period (£) 7.03 6.70 5.70 7.05 Exercise price for all options (£) 0.00 0.00 0.00 0.00 LTIP (ii) WAEP SIP (iii) Number (£) Number In issue at beginning of period 240,346 3.48 79,271 Granted in period – N/A 58,928 Lapsed in period – N/A (29,814) Exercised in period (139,447) 3.26 (1,644) In issue at end of period 100,899 3.79 106,741 Exercisable at end of period 100,899 3.79 – Number of options in the closing balance granted before 7 November 2002 – – – Weighted average share price for options exercised during the period (£) 7.11 – 6.87 Weighted average life remaining for options outstanding at the period end (years) – – 1.9 Weighted average fair value of options granted during the period (£) N/A – 7.04 Exercise price for all options (£) 3.79 – – 1 1 Weighted Average Exercise Price. 202 203  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title  continued  Other supporting notes 24 Financial commitments Capital commitments 30 December 2023 24 December 2022 £m £m Contracted for, but not provided for in the financial statements: – Tangible assets 15.2 16.1 –gible assets – software – 0.7 15.2 16.8 25 Related party transactions Companies which are related parties Transactions between Group companies, which are related parties, have been eliminated on consolidation and are not disclosed in this note. All transactions between the Group and the Group’s pension schemes have been disclosed in note 22. Remuneration of key management personnel Key management personnel comprise the Board of Directors (including non-executive directors) and the Executive Committee. Details of the aggregate remuneration to these personnel is set out below. The figure disclosed for share-based payments represents the gain realised on the exercise of share options in the year, albeit that those options will have been granted in previous periods. All figures include any related employer’s National Insurance. 30 December 2023 24 December 2022 £m £m Short-term employment benefits 10.2 10.5 Termination benefits 0.5 0.8 Share-based payments 2.3 4.2 13.0 15.5 Other transactions with key management personnel There were no other transactions with key management personnel. Notes 30 December 2023 £m 24 December 2022 £m Non-current assets Investments in subsidiaries 3 699.0 699.0 Property, plant and equipment 6 37.4 – Lease right-of-use assets 5 179.1 175.5  69.4 103.3  0.9 1.0 Prepaid credit facility fees 0.7 1.0 986.5 979.8 Current assets Other debtors 0.3 9.9 Cash and cash equivalents – 218.2 0.3 228.1 Total assets 986.8 1,207.9 Current liabilities Lease liabilities 5 (6.8) (10.2) Trade and other payables (0.4) –  – (326.8) (7.2) (337.0) Non-current liabilities Lease liabilities 5 (197.1) (192.1) Total liabilities (204.3) (529.1) Net assets 782.5 678.8 Equity Called up share capital 6 55.4 56.1 Capital redemption reserve 9.8 9.1 Share premium 87.5 87.5 Treasury shares (24.0) (25.5) Retained earnings 653.8 551.6 Total equity 782.5 678.8    behalf by     205  Annual Report & Accounts 2023  Additional Information Governance Strategic Report 204  Annual Report & Accounts 2023 205  Annual Report & Accounts 2023 Financial StatementsFinancial Statements Page Title Company balance sheet   Called up share capital £m Capital redemption reserve £m Share premium account £m Treasury shares £m Retained earnings £m Total £m At 25 December 2021 59.8 5.4 87.5 (27.1) 623.3 748.9  – – – – 293.8 293.8  (3.7) 3.7 – – (250.5) (250.5) Transfer of shares from treasury into share trust – – – 1.6 – 1.6 Dividends declared and paid – – – – (115.0) (115.0) At 24 December 2022 56.1 9.1 87.5 (25.5) 551.6 678.8  – – – – 266.2 266.2  (0.7) 0.7 – – (50.0) (50.0) Transfer of shares from treasury into share trust – – – 1.5 – 1.5 Dividends declared and paid – – – – (114.1) (114.1) At 30 December 2023 55.4 9.8 87.5 (24.0) 653.8 782.5 30 December 2023 £m The Company’s distributable reserves at period end are: Retained earnings 653.8 Treasury shares (24.0) Distributable reserves 629.8       at page 212.   24 December 2022.       disclosures: •  •  •  •  •  •  • disclosures in respect of Key Management Personnel.   Instruments.        The Company has no employees (2022: none). Directors’ emoluments and the fees payable to the Company’s auditor for the  206 207  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsCompany statement of changes in equity Notes to the Company financial statements    Total £m Cost and carrying value: At 24 December 2022 and 30 December 2023 699.0    Other than a small amount of interest receivable on cash and cash equivalents, the Company has no income receivable other     indicator of any impairment in the Company’s investment in subsidiaries. Details of all Group subsidiaries are given on page 212.   Leasehold property improvements £m Assets under construction £m Total £m Cost At 25 December 2021 and 24 December 2022 – – – Additions 44.6 1.7 46.3 At 30 December 2023 44.6 1.7 46.3 Accumulated depreciation At 25 December 2021 and 24 December 2022 – – – Charge for the period (8.9) – (8.9) At 30 December 2023 (8.9) – (8.9) Net book value at 30 December 2023 35.7 1.7 37.4  – – –  continued       Right-of-use assets 30 December 2023 £m 24 December 2022 £m Property 179.1 175.5 Additions to right-of-use assets in the period 12.9 3.1 30 December 2023 £m 24 December 2022 £m Lease liabilities Current (6.8) (10.2) Non-current (197.1) (192.1) (203.9) (202.3)  53 weeks to 30 December 2023 £m 52 weeks to 24 December 2022 £m Included in net operating expenses Depreciation of property right-of-use assets 8.6 7.9   4.6 4.5  53 weeks to 30 December 2023 £m 52 weeks to 24 December 2022 £m  14.7 8.7 Maturity analysis of lease liabilities 30 December 2023 £m 24 December 2022 £m   11.1 14.6 – 2 to 5 years 46.7 42.7 – more than 5 years 204.5 204.6 262.3 261.9 208 209  Annual Report & Accounts 2023  Annual Report & Accounts 2023  Additional Information Governance Strategic Report Financial Statements Financial StatementsPage Title Page Title    Ordinary shares of 10p each: 53 weeks to 30 December 2023 No. 52 weeks to 24 December 2022 No. 53 weeks to 30 December 2023 £m 52 weeks to 24 December 2022 £m Allotted, called up and fully paid Balance at the beginning of the period 560,916,049 597,573,827 56.1 59.8  (7,324,329) (36,657,778) (0.7) (3.7) Balance at the end of the period 553,591,720 560,916,049 55.4 56.1  continued  210  Annual Report & Accounts 2023  211  Annual Report & Accounts 2023 Governance Strategic Report  Additional Information 212  213  214 Shareholder and share capital information 216 Shareholder Ranges 216 Corporate timetable 217  Financial StatementsPage Title Page Title  Page Title Additional Information Five year record December 2023 52 weeks £m December 2022 52 weeks £m December 2021 52 weeks £m December 2020 52 weeks £m December 2019 52 weeks £m Summarised Income Statement Revenue 2,310.9 2,319.0 2,093.7 1,547.5 1,583.6  340.2 415.2 401.7 195.7 260.0  327.6 405.8 390.3 185.3 260.7 Full year dividend per share (pence) 1 21.0 20.6 19.5 18.2 3.9 Basic EPS (pence) 46.5 65.8 53.2 24.9 35.0 Summarised Balance Sheet  leases and pension 516.8 471.5 332.1 290.7 251.7 Non-current lease right-of-use assets 647.9 614.3 555.8 544.2 – Inventories 382.8 373.3 301.6 255.0 231.8  234.2 265.6 205.8 166.6 193.1 Payables and provisions (389.0) (454.2) (468.7) (338.2) (272.2) Pension (liability)/asset (12.6) (41.5) 140.8 (47.7) (56.6) Total lease liabilities (684.5) (665.3) (591.2) (580.5) – (469.1) (522.1) (411.7) (544.8) 96.1 Net cash & short-term investments 282.8 308.0 515.3 430.7 267.4 Total net assets 978.4 871.7 991.5 720.8 615.2 Number of depots at end of year UK 840 808 778 748 732 France & Belgium 65 60 40 30 27 Republic of Ireland 10 5 – – – TOTAL 915 873 818 778 759 Capital expenditure 119 141 86 70 61     18.2p/share for 2020. Parent company and all subsidiary undertakings At 30 December 2023 Country of registration   Parent company  England and Wales 105 Wigmore Street, London, England, W1U 1QY All subsidiary undertakings Intermediate Holding Companies:  England and Wales 105 Wigmore Street, London, W1U 1QY  England and Wales 105 Wigmore Street, London, W1U 1QY Trading:  England and Wales 105 Wigmore Street, London, W1U 1QY  France 1 Rue Calmette, ZA Du Bois Rigault Nord, 62880 Vendin-Le-Vieil  Belgium Rue du Cerisier 05-12, 6041 Gosselies  Republic of Ireland Suite 3, One Earlsfort Centre, Earlsfort Terrace, Dublin 2, Ireland Sheridan Fabrications Limited England and Wales 105 Wigmore Street, London, W1U 1QY Property Management:  England and Wales 105 Wigmore Street, London, W1U 1QY  England and Wales 105 Wigmore Street, London, W1U 1QY Administration and Employee Services:  England and Wales 105 Wigmore Street, London, W1U 1QY  England and Wales 105 Wigmore Street, London, W1U 1QY Dormant:  England and Wales 105 Wigmore Street, London, W1U 1QY Foreign Company Registrations:  Isle of Man 33–37 Athol Street, Douglas, Isle of Man, IM1 1LB   105 Wigmore Street, London, W1U 1QY  Isle of Man 33–37 Athol Street, Douglas, Isle of Man, IM1 1LB 212 213 Howden Joinery Group Plc Annual Report & Accounts 2023 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Five year recordParent company and all subsidiary undertakingsFinancial Statements Financial Statements Additional Information  authority by shareholders to purchase up to 55,455,816 of the Company’s ordinary shares through the market 1 . The   is earlier). Rights and restrictions Issued share classes: Ordinary only (fully paid) Voting rights at general meetings: One vote per share  None Individual special rights of control: None  2 : None Transfer restrictions 2 : None  holders of the Company’s shares that may result in restrictions on the transfer of shares or on voting rights. Substantial shareholdings     Substantial Shareholder % of total voting rights Date of last  BlackRock, Inc  3 13 October 2023 The percentage interest is as stated by the shareholder at the   There are a number of agreements that take effect, alter or terminate upon a change of control such as commercial contracts, bank loan agreements and employee share plans.   is the bank facility (as described on page 70 and in note 19  a change of control, a mandatory repayment of the entire   Company and its Directors or employees that provide for  because of a takeover bid. Provision for indemnity against liability incurred by a Director The Company has provided indemnities to the Directors (to   indemnity nor any insurance provides cover in the event that the Director is proven to have acted dishonestly  Listing Rule 9.8.4R(2) disclosure    “ Given the Group’s continued resilient trading, the  recognising a more uncertain macro-economic outlook  analysts’ consensus forecasts.” A footnote to the statement above read:     30 December 2023 is set out in the consolidated income statement on page 162.          Shareholder and share capital information Annual General Meeting   EC2P 2SR on 2 May 2024 at 11.00am.     to be voted on. Dividend    2023 Final Dividend  11 April 2024 Record Date 12 April 2024 Payment Date 24 May 2024 Dividend reinvestment plan (‘DRIP’)    shares, rather than receive a cash payment. The DRIP is    Dividend payments directly to a bank    have dividends paid directly to your account using a bank or building society mandate. You can arrange this by completing      dividends paid to a different UK bank or building society account. Dividend mandate details can also be de-selected  Share Capital As at 30 December 2023, the Company had only fully paid  out the share capital position at 30 December 2023 and at 24 December 2022: % change Number of Shares 30 Dec 2023 24 Dec 2022 Total Shares in issue  553,591,720 560,916,049 Treasury Shares  4,918,375 5,237,907   548,673,345 555,678,142 Shares held in Treasury have no voting or dividend rights and  Details of employee share schemes are set out in note 23 to the Financial Statements beginning on page 199.     through UK all-employee share plans, have both voting and dividend rights. Shares in public hands 1    Directors, persons discharging managerial responsibility (PDMRs), or connected persons of those Directors or PDMRs,      Company’s issued share capital at the 30 December 2023. Acquisition of the Company’s own shares During 2023, the Company repurchased and cancelled just  share repurchase programme. The repurchased shares     more information) the Company returns surplus capital to shareholders. In 2023, the Board considered that a share buy back programme, in addition to paying a dividend,      214 215 Howden Joinery Group Plc Annual Report & Accounts 2023 Howden Joinery Group Plc Annual Report & Accounts 2023 Financial Statements Additional Information Governance Strategic Report Shareholder and share capital informationFinancial Statements Financial Statements Page Title Financial Statements Additional Information Governance Strategic Report  Principal Banker Lloyds 25 Gresham Street London EC2V 7HN Joint Financial Advisers and Stockbrokers Deutsche Numis Securities 45 Gresham Street London EC2V 7BF Barclays 1 Churchill Place Canary Wharf London E14 5HP Solicitors  100 Bishopsgate London EC2P 2SR Auditor KPMG 15 Canada Square London E14 5GL  Equiniti Aspect House Spencer Road Lancing West Sussex BN99 6DA  105 Wigmore Street London W1U 1QY Additional Information     Corporate holders 0 to 1,000 59 23,160   1,001 to 5,000 81 206,300   5,001 to 10,000 40 307,235   10,001 to 50,000 131 3,374,415   50,001 to 100,000 65 4,794,872   100,001 to 250,000 115 18,360,299   Over 250,000 211 519,741,201   702 546,807,482   Individual holders 0 to 1,000 4,933 1,728,901   1,001 to 5,000 965 2,190,971   5,001 to 10,000 102 723,528   10,001 to 50,000 59 1,112,255   50,001 to 100,000 3 211,989   100,001 to 250,000 1 124,594   Over 250,000 2 693,000   6,065 6,785,238   Total 6,767 553,592,720 100.00 100.00 2024 Trading update 30 April Annual General Meeting 2 May Half-Yearly Report 25 July Trading update    Shareholder ranges as at 30 December 2023 Corporate timetable Howden Joinery Group Plc Annual Report & Accounts 2023 217 Howden Joinery Group Plc Annual Report & Accounts 2023 Made in the UK Annual Report and Accounts 2023 Howden Joinery Group Plc 2023 Available through the Trade only The UK’s number 1 trade kitchen supplier Annual Report  Howden Joinery Group Plc