The
results for each year are compared primarily with the results
for the preceding year. Reference is made also to quarterly
and half-yearly trends within the results.
Exchange
The
Group, as a multinational business, operates in many countries
and earns revenues and incurs costs in many currencies. The
results of the Group, as reported in sterling, are therefore
affected by movements in exchange rates between sterling and
overseas currencies.
The company
uses the average exchange rates prevailing during the period
to translate the results and cash flows of overseas Group
subsidiary, joint venture and associated undertakings into
sterling and period end rates to translate the net assets
of those undertakings. The currencies which most influence
these translations are the US dollar, the euro and the Japanese
yen.
In order
to illustrate underlying business performance, excluding the
effect of exchange rate movements on translation, it is the
Group’s practice to discuss its results in terms of constant
exchange rate (CER) growth. This represents growth calculated
as if the exchange rates used to translate the results of
overseas companies into sterling had remained unchanged from
those used in the previous period. The discussion in this
review is therefore in terms of CER unless otherwise stated.
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