Preliminary Results 2015

Preliminary Results for year ended 31 December 2015

Fyffes delivers another year of record earnings

· EBITDA* up 16.4% to €56.1m

· EBITA* up 14.2% to €45.8m

· EPS* up 14% to 12.73 cent

· Seventh consecutive year of earnings growth

· Compound annual growth in EPS* of 18.2% since 2008

· Strong return on invested capital of 15.9%

· Final dividend increased by 15%

· Target EBITA* range for 2016 of €42m-€48m

Commenting on the results, David McCann, Chairman, said:

"Fyffes has delivered another important step up in earnings in 2015, its seventh consecutive year of growth, with a 14.2% increase in adjusted EBITA to €45.8m. The Group is focused on consolidating at this higher level of earnings. The initial target EBITA for 2016 is in the range €42m-€48m. Fyffes is pursuing necessary increases in selling prices in all markets in response to the continuing strength of the US dollar against the euro and sterling.

The Group is also focused on continuing to grow its business and is actively pursuing a number of attractive acquisition opportunities."

* These financial terms are defined below and exclude a €12m net exceptional charge.

26 February 2016

Forward looking statement

Any forward looking statements made in this press release have been made in good faith based on the information available as of the date of this press release and are not guarantees of future performance. Actual results or developments may differ materially from the expectations expressed or implied in these statements, and the company undertakes no obligation to update any such statements whether as a result of new information, future events, or otherwise. Fyffes Annual Report contains and identifies important factors that could cause these developments or the company's actual results to differ materially from those expressed or implied in these forward-looking statements.

For further information, please view the 2015 results slide presentation at www.fyffes.comor contact Brian Bell at Wilson Hartnell PR, Tel: +353-1-6690030.

Fyffes plc Preliminary Results for year ended 31 December 2015

Financial Highlights

*Key performance measures:

· Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation, excluding the Group's share of Balmoral's result and exceptional items

· Adjusted EBITA is adjusted EBITDA less depreciation charges

· Adjusted EBIT is adjusted EBITA less amortisation charges

· Adjusted diluted earnings per share excludes exceptional items and, in previous years, amortisation charges and related tax credits, and the Group's share of Balmoral's result

Copies of this announcement are available from the Company's registered office, 29 North Anne Street, Dublin 7 and on our website at www.fyffes.com.

Financial results and operating review

Revenue

Total revenue, including the Group's share of its joint ventures, amounted to €1.22bn in 2015, an increase of 12.1%. Group revenue, excluding Fyffes' share of its joint ventures, was €985m in the year, 15.6% higher year on year. Excluding the positive translation impact of the weaker euro on the Group's US Dollar and Sterling denominated sales, underlying revenue growth in 2015 was 7%. This was mainly driven by further organic volume growth in the Group's banana and melon categories. The Group's share of revenue of its joint ventures was marginally lower in 2015 mainly due to a reduced shareholding in one of these businesses.

Operating profit

Fyffes has delivered another important step up in profits in 2015, its seventh consecutive year of earnings growth. Adjusted EBITA was €5.7m higher (+14.2%) at €45.8m, compared to €40.1m in 2014. Cumulatively the Group's Adjusted EBITA has increased by 200% over that seven year period, representing a strong compound annual growth rate of 17%. Adjusted EBITDA of €56.1m was 16.4% higher year on year. The calculations of Adjusted EBITA and Adjusted EBITDA are set out in note 2 of the accompanying financial information. The key drivers of performance in the Group's tropical produce operations are average selling prices, exchange rates and the costs of fruit, shipping and fuel.

Fyffes achieved a strong result in the banana category in 2015, with a mid-teens percentage increase in operating profits. This was delivered despite a significant currency headwind, with the US Dollar strengthening by 16% and 7% against the euro and Sterling respectively during the year. The impact of this was partly mitigated by reductions in key input costs, further logistical efficiencies combined with lower fuel costs, operational efficiencies in the Group's distribution network and reductions in other import costs. Fyffes also secured increases in selling prices in some markets. The Group continued to grow its European market share, with a mid-single digit percentage increase in its banana volumes in the year.

Fyffes pineapple operations also delivered a strong result in 2015. As in the banana category, exchanges rates were a significant headwind due to the strength of the US Dollar. The Group secured increases in selling prices in most markets, helped by supply constraints as a result of poor weather in Costa Rica, the key production region. Fyffes total volumes were marginally lower for this reason, although production on the Group's own farms was slightly higher as a result of further yield improvements. Costs, particularly logistics and fuel, were lower year on year.

Fyffes delivered a broadly satisfactory result in 2015 in its US melon business, although profits were down the very strong result achieved in the previous year. There was adverse weather in the early part of the year in the production regions which increased costs and resulted in some quality issues in certain varieties for part of the season. This had a modest adverse impact on average selling prices. Towards the end of the year, the Group purchased additional melon farming assets in Guatemala which contributed to a mid-single digit increase in volumes in this category in the year and is expected to result in a 25% increase in volumes on a full year basis in 2016. Fyffes is pleased with the initial integration of these new farms and there has been a positive start to the 2015/16 US melon import season.

Balmoral International Land Holdings plc ("Balmoral"), in which the Group has a 40% shareholding, published its results for 2014 in September 2015, reporting a profit attributable to equity shareholders of €6.7m. Fyffes continues to maintain an impairment provision against the carrying value of its investment in Balmoral, which remains unchanged at €50,000, and has therefore recorded no net profit in this regard. Balmoral has not yet reported its 2015 results.

The total operating profit for the Group, which is Adjusted EBITA less exceptional items and the Group's share of its joint ventures' interest and tax charges, amounted to €32.5m for the year compared to €38.9m in the previous year.

Exceptional items

As explained in more detail in note 3 of the accompanying financial information, the Group has treated a number of non-recurring matters as exceptional items in its 2015 financial statements, amounting to a net charge of €12m. This comprised an €11.1m net charge arising on termination of the Group's Irish defined benefit pension scheme, a €2.9m charge recognised in relation to a fine paid by one of the Group's joint venture businesses and a €2m credit in respect of costs accrued in 2014 in connection with the Group's planned merger with Chiquita Brands International, Inc. which were not ultimately incurred. Net tax credits of €1.1 million arose during the year in relation to these exceptional items.

Financial expense

Net financial expense in the Group's subsidiary companies in 2015 amounted to €0.7m, unchanged on the previous year. The Group's share of the net financial expense of its joint ventures was €0.4m in 2015, also unchanged on the previous year.

Profit before tax

Adjusted profit before tax for 2015 amounted to €44.6m, 14.5% up on the previous year. As set out in note 2 of the accompanying financial information, adjusted profit before tax excludes exceptional items and the Group's share of the tax charge of its joint ventures, which is reflected in profit before tax under IFRS, and, in previous years, the amortisation of intangible assets and the Group's share of Balmoral's result. Profit before tax, excluding these adjustments, amounted to €31.8m compared to €38.2m in 2014, including the impact of the €12m exception charge.

Taxation

An analysis of the tax charge for the year is set out in note 4 of the accompanying financial information. The underlying tax charge in 2015 was €6.2m compared to €5m in the previous year, equivalent to a rate of 13.8% (2014: 12.7%), when applied to the Group's adjusted profit before tax. The c.1% increase in the underlying tax rate in 2015 reflects some changes in the geographic mix of the Group's profits. The underlying tax charge excludes the tax impact of exceptional items and includes the Group's share of tax of its joint ventures. This underlying rate is used for the purposes of calculating adjusted earnings per share. The 2015 Income Statement shows a tax charge of €4.2m before these adjustments, compared to €4m in the previous year.

Non-controlling interests

The non-controlling interests share of profit after tax for the year amounted to €0.1m in 2015, compared to €0.2m in the previous year.

Earnings per share

The Group's adjusted diluted earnings per share in 2015 amounted to €12.73 cent, up 14% on the previous year. This reflects the increase in adjusted profit before tax less the impact of the slightly higher tax charge. The calculation of adjusted earnings per share is set out in note 5 of the accompanying financial information. It excludes exceptional items and, in previous years, the amortisation of intangible assets and related tax credits, and the Group's share of Balmoral's result. Diluted earnings per share after the €12m exceptional charge, amounted to €9.10 cent in 2015, compared to 11.20 cent in the previous year.

Dividend and share buyback

The Board is proposing to pay a final dividend for 2015 of €1.924 cent per share, up 15% on the previous year. Subject to shareholder approval at the forthcoming AGM, this dividend, which will be subject to Irish withholding tax rules, will be paid on 6 May 2016 to shareholders on the register on 8 April 2016. In accordance with company law and IFRS, this dividend has not been provided for in the balance sheet at 31 December 2015. Total dividends in respect of 2015 will amount to €2.7451 cent, 15% up on the previous year and equivalent to a pay-out ratio of 21.6% based on adjusted earnings per share.

Fyffes will seek to renew its authority from shareholders to repurchase shares at its 2016 AGM. Subject to this authority and taking into account the Group's financial position and other investment opportunities, the company may from time to time repurchase further Fyffes plc shares in the market.

Balance sheet

Net funds

The Group's net debt increased by €27.6m in 2015 to €39.3m. This represents 0.7 times Adjusted EBITDA. Cash generated from operations in the year was c. €56m, comprising Adjusted EBITDA excluding the Group's share of EBITA from its joint ventures but including dividends received from these businesses. Total capital and investment expenditure amounted to over €83m. This included €26.8m spent on the melon and banana farming businesses acquired towards the end of the year, plus with a further €2.7m spent acquiring another farm which was accounted for as an asset purchase. Regular Capex amounted to €9.6m, compared to the €10.3m depreciation charge. Total payments of €20m were made arising from the closure of the Irish pension scheme as explained below. Dividends paid amounted to €7.4m, tax paid was €4.3m and €5.2m was paid in respect of the Group's MNOPF and MNRPF liabilities. Working capital increased by €9.9m in the year, reflecting the impact of the acquisitions during the year and volume growth in the banana and melon categories.

Pension obligations

As explained further in note 6 of the accompanying financial information, during 2015 the Group decided to close its Irish defined benefit pension scheme to future accrual and to future liability due to the ever increasing cost of funding such schemes. Once-off final payments amounting to €20m were made to settle the scheme deficit, to eliminate the possibility of a claim by the trustees in respect of member expectations in relation to the scheme and to facilitate transfers to the new defined contribution scheme. After eliminating the accounting deficit in the Irish scheme as at 31 July 2015 of €8.9m, the incremental costs of €11.1m, net of a settlement gain of €2.7m arising under the measurement criteria of IAS 19, have been expensed in the income statement as an exceptional charge. The deficit in the Group's remaining defined benefit pension schemes in the UK and the Netherlands, before deferred tax, amounted to €32.1m at the end of the year. The Group is also in the process of closing its UK defined benefit scheme to future accrual.

Investment in Balmoral International Land Holdings plc ("Balmoral")

In accordance with International Financial Reporting Standards, Fyffes 40% investment in Balmoral continues to be accounted for under equity accounting rules. Fyffes wrote down the carrying value of its investment to €50,000 in 2011. Balmoral published its 2014 full year results in September 2015, reporting a profit attributable to equity shareholders of €6.7m, increasing its net equity to €8.5m. Fyffes has recognised its share of these profits but has also recognised a matching impairment provision on the basis that there has not yet been a sustained and prolonged recovery in Balmoral's performance and the carrying value of its investment has therefore remained unchanged at €50,000. Balmoral has not yet finalised its 2015 results. Fyffes will consider the appropriateness of its impairment provision after Balmoral publishes its 2015 results. Balmoral continues to be actively managed and, given its well diversified portfolio of properties in Ireland, the UK and Continental Europe, remains in a position to benefit from improvements in property market conditions.

Shareholders' funds

Shareholders' funds increased by €31.2m (+17.1%) in 2015 to €213.9m. The main components of this increase included - retained profits after tax and minority interests of €27.4m, less dividends paid of €7.4m; translation gains on the Group's non-euro denominated net assets amounting to €17.1m; net actuarial gains on the Group's and its joint ventures' pension schemes of €1.3m, net of deferred tax; the proceeds from share options exercised of €1.4m; and mark to market losses on valuing the Group's currency and fuel hedges at year end amounting to €9m, net of deferred tax.

Outlook

Having achieved a further step up in profitability in 2015, Fyffes is focused on consolidating at this higher level of earnings. The Group's initial target EBITA for 2016 is in the range €42m-€48m, compared to €45.8m in 2015. Fyffes is pursuing increases in selling prices in all markets in response to the continuing strength of the US Dollar against the euro and Sterling. Trading conditions have been satisfactory in the year to date in 2016. The Group remains focused on always improving the efficiency of its operations in order to enhance its competitiveness. Fyffes is determined to continue to grow its business and is actively pursuing a number of attractive acquisition opportunities.

David McCann, Chairman 26 February 2016

on behalf of the Board

Fyffes plc

Summary Group Income Statement for the year ended 31 December 2015

Fyffes plc

Summary Group Statement of Comprehensive Income for the year ended 31 December 2015

Summary statement of movement in equity for the year ended 31 December 2015

Fyffes plc

Summary Group Balance Sheet as at 31 December 2015

Fyffes plc

Summary Group Cash Flow Statement for the year ended 31 December 2015

Fyffes plc

Notes to Preliminary Results for the year ended 31 December 2015

1. Basis of preparation

This preliminary financial information has been derived from the Group's consolidated financial statements for the year ended 31 December 2015, which were approved by the Board of Directors on 25 February 2016. It has been prepared in accordance with the International Financial Reporting Standards (IFRS) as endorsed by the EU Commission and the accounting policies set out in the Group's 2014 annual report.

The Group's full financial statements and annual report will be circulated to shareholders, published on the Group's website and filed with the Irish Registrar of Companies in due course.

The comparative financial information for the year ended 31 December 2014 presented in this preliminary results announcement represents an abbreviated version of the Group's statutory financial statements for that year, on which an unqualified audit report was issued and which have been filed with the Companies Registration Office in Dublin.

The financial information is presented in euro, rounded to the nearest thousand. The results and cash flows of Group companies denominated in foreign currencies have been translated into euro at the average exchange rates for the period while their balance sheets have been translated at the year end rate of exchange. Adjustments arising on retranslation of the opening net assets and results for the year of these non-euro denominated operations at the year end rate of exchange are recognised directly in equity, in the currency translation reserve, net of any movements on related foreign currency borrowings, including those arising on long term intra-Group loans regarded as quasi-equity in nature. All other translation differences are recognised in the income statement. The principal non-euro currencies applicable to the Group are sterling and the US dollar. The average and closing rates to the euro were as follows:

2. Adjusted profit before tax, EBITA and EBITDA

Fyffes is currently organised into two separate operating divisions - Tropical Produce and Property. Fyffes Tropical Produce operations produce and import bananas, pineapples and melons sourced in Central and South America for distribution to customers in Europe and the US. Fyffes Property activities comprise its 40% investment in Balmoral International Land Holdings plc ("Balmoral") which is an international property development company. This preliminary results announcement presents the separate information for Balmoral under equity accounting rules in the Income Statement and the Balance Sheet and in the reconciliation above. The performance of the Tropical Produce division is reviewed by the Chief Operating Decision Maker ("CODM"), being the executive team comprising the Executive Chairman, the Chief Operating Officer and the Finance Director, based on Adjusted EBITA which, while not a term defined in IFRS, Fyffes believes is the most appropriate measure of the underlying operating result of the Group. Adjusted EBITA is earnings before interest, tax and amortisation charges, excluding exceptional items and the Group's share of Balmoral's result and including the Group's share of its joint ventures on a consistent basis. Adjusted earnings per share are presented on a similar basis in note 5 below. Adjusted EBITA reflects the results of Fyffes Tropical Produce operations, net of all central overheads, and is the basis for the analysis of the performance of that division in the accompanying text. Financial income and expense, income tax and certain corporate overheads are managed on a centralised basis. The only inter-segmental transactions between Fyffes Tropical Produce division and Balmoral arise because Fyffes leases a number of its distribution centres from Balmoral and Fyffes in turn sublets space in its corporate head office to Balmoral.

Balmoral published its 2014 full year results in September 2015, reporting a profit after tax of €6.7m. Fyffes has recognised its share of these profits but has also recognised a matching impairment provision on the basis that there has not yet been a sustained and prolonged recovery in Balmoral's performance and the carrying value of its investment has therefore remained unchanged at €50,000. Balmoral has not yet finalised its 2015 results. Fyffes will consider the appropriateness of its impairment provision after Balmoral publishes its 2015 results.

3. Exceptional items

As explained further in note 6 below, during 2015 the Group decided to close its Irish defined benefit pension scheme to future accrual and to future liability due to the ever increasing cost of funding such schemes. Once-off final payments amounting to €20m were made to settle the scheme deficit, to eliminate the possibility of a claim by the trustees in respect of member expectations in relation to the scheme and to facilitate transfers to the new defined contribution scheme. After eliminating the accounting deficit as at 31 July 2015 of €8.9m, the incremental costs of €11.1m, net of a settlement gain of €2.7m arising under the measurement criteria of IAS 19, have been expensed in the income statement as an exceptional charge.

In 2008, the European Commission published its Decision following the conclusion of its investigation into the supply of bananas in the Northern European region of the European Economic Area ("EEA"). No adverse findings were made against Fyffes and no fine imposed on it. At the same time, the European Commission found the Group's German joint venture, Internationale Fruchtimport Gesellschaft Weichert GmbH & Co KG ("Weichert") and Fresh Del Monte Produce Inc ("Del Monte") jointly and severally liable for a fine of €14.7m, for breaches of Article 81 of the Treaty of Rome and Article 53 of the EEA Agreement relating to the supply of bananas to the Northern European region of the EEA in the period 1 January 2000 to 31 December 2002. Fyffes acquired its 80% interest in Weichert from Del Monte on 1 January 2003. The Commission found that Weichert was controlled by Del Monte throughout the period covered by the Decision. Weichert provided for a net exceptional charge of €3.7m in its 2008 accounts in relation to this fine. While Fyffes has no liability in this matter, the Group's income statement in 2008 reflected Fyffes 80% share of the net exceptional charge recognised in Weichert's accounts, amounting to €2.9m.

There have been a number of appeals in relation to this case with a concluding judgement issued by the Court of Justice of the European Union ("CJEU") on 24 June 2015 which confirmed a lower fine of €9.8m, plus interest costs. Separately, Weichert and Del Monte reached an agreement in relation to the split of the fine. As a result of the decision of the CJEU and the agreement with Del Monte, Weichert has recognised a further exceptional charge of €3.6m in its 2015 financial statements covering its share of the fine plus interest and related costs in full and final settlement of this long running matter. Fyffes 80% share of the additional charge recognised by Weichert amounts to €2.9m and is being reported as an exceptional item.

In March 2014, Fyffes and Chiquita Brands International Inc ("Chiquita") announced an intention to combine in an all share merger. In August 2014, a consortium offered to purchase Chiquita in an all cash deal. Ultimately, Chiquita shareholders voted not to support the proposed merger with Fyffes at a special meeting in October 2014 and the business was sold to the consortium. Following termination of the proposed merger, Chiquita paid US$23.3m (€18.6m) to Fyffes in respect of its obligations under the terms of the merger agreement. During this protracted process, which extended over a prolonged period, Fyffes incurred professional and advisory fees and other costs amounting to €14.3m, including costs related to a review of Fyffes business operations, resulting in a net surplus of €4.3m in 2014. During 2015, Fyffes wrote back costs amounting to €2.048m, which had been accrued in 2014 in respect of this proposed merger, but were ultimately not incurred by the Group.

Following a strategic review of its pineapple farming operations in 2014, the Group decided to write down the carrying value of the assets of one of its pineapple farms which has been under-performing compared to its other larger pineapple farm. The impairment charges recognised in 2014 in writing down these assets amounted to €4.2m.

Net tax credits of €1.1m arose during the year in relation to these exceptional items. This exceptional tax credit has been excluded in the calculation of the Group's Adjusted earnings per share (see note 5 below).

4. Corporation tax

Including the Group's share of the tax charge of its joint ventures, amounting to €0.9m (2014: €0.9m), which is netted in operating profit in accordance with IFRS, the total tax charge for the year amounted to €5.1m (2014: €5.0m). Excluding the impact of tax credits which arose during the year on certain exceptional charges (see note 3), the underlying tax charge for the Group for the year was €6.2m (2014: €5.0m), equivalent to a rate of 13.8% (2014: 12.7%) when applied to the Group's adjusted profit before tax.

5. Earnings per share

Adjusted diluted earnings per share

Adjusted diluted earnings per share is calculated to exclude, where applicable, the Group's share of the results of Balmoral International Land Holdings plc, exceptional items, intangible amortisation, related tax credits / charges, once-off tax credits and the impact of share options with a dilutive effect.

6. Post employment benefits

The table above summarises the movements during the year in the Group's defined benefit pension schemes in Ireland, the UK and Continental Europe. The current/past service cost is charged in the Income Statement, together with the interest cost of scheme liabilities net of the finance income on scheme assets. The actuarial (loss)/gain is recognised in the Statement of Comprehensive Income, in accordance with the amendment to IAS 19 Employee Benefits (2011). The measurement of the Group's pension obligations is based on a number of key assumptions which are determined in consultation with independent actuaries. One key assumption is the appropriate interest rate to use in discounting the estimated future cash flows of the schemes. For 2015, the Group used a rate of 2.6% (2014: 2.3%) in respect of its euro denominated schemes and 3.8% (2014: 3.7%) in respect of its UK scheme.

These defined benefit pension schemes represent a very significant commitment of Group resources. Fyffes had been exploring for some time how it might de-risk its exposure in this regard, either through fully eliminating these liabilities or, where this is not feasible, spreading the funding costs over an extended period. While the Group's Irish and UK defined benefit pension schemes have been closed to new entrants since 2009, liabilities under these schemes continued to accrue as a result of the ongoing service of the existing members. In July 2015, the Group decided to close its Irish defined benefit pension scheme to future accrual and to future liability. Following agreement with the scheme trustees and certain scheme members, all accrued liabilities, rights and related costs were settled. Once-off final payments amounting to €20m were made to settle the deficit in the scheme, to eliminate the possibility of a claim by the trustees in respect of member expectations in relation to the scheme and to facilitate transfers to the new defined contribution scheme, including the payment for all members of enhanced transfer values calculated by the scheme actuary and agreed by the trustees and members. The Group therefore has no further obligation in relation to that scheme and it is in the process of being wound up. The Group has established a new defined contribution scheme for the former members of the Irish defined benefit scheme. The accumulated benefits of each member of the former defined benefit scheme have been transferred to the new defined contribution scheme by bulk transfer.

Net of a settlement gain of €2.7m arising on termination under the measurement criteria of IAS 19, a final contribution of €6.1m was paid directly into the Irish scheme to eliminate the accounting deficit of €8.9m as at 31 July 2015. A net exceptional charge of €11.1m has been recognised in the income statement (see note 3 above), being the difference between the €20m final payments and the accounting deficit of €8.9m.

UK legislation provides a very significant level of protection to occupational pension schemes. The Group is, therefore, more constrained in its options to limit its exposure in respect of its UK defined benefit scheme. It would not be possible to fully eliminate the Group's exposure to this scheme on the same terms as the settlement agreed with the trustees of the Irish scheme. An agreement has been in place for a number of years with the trustee of the UK scheme to fund the past service deficit over an extended period. The Group is in the process of closing its UK scheme to future accrual.

The pension cost expensed in the income statement for the year in respect of the Group's defined benefit schemes was €1.1m, net of the €2.7m settlement gain on termination of the Group's Irish defined benefit scheme (2014: €2.9m).

7. Dividends and share buy-back

The directors have proposed a final dividend for 2015, subject to shareholder approval at the AGM of €1.924 cent per share. In accordance with IFRS, this dividend has not been provided for in the Balance Sheet at 31 December 2015.

On 31 December 2015, the company and subsidiary companies held 31,075,000 Fyffes plc ordinary shares. The right to dividends on these shares has been waived and they are excluded from the calculation of earnings per share.

8. Notes supporting cash flow statement

8.1 Cash generated from operations

8.2 Cash flows from investing activities

8.3 Cash flows from financing activities

8.4 Analysis of movement in net (debt) in the year

9. Reconciliation of other reserves

10. Acquisition of subsidiaries

In a number of separate transactions during 2015, the Group purchased additional melon farming assets in Central America. It also completed the acquisition of a banana farm in Costa Rica which it had been successfully operating under a lease arrangement since early in 2014. The provisional fair values of the assets acquired and consideration paid and payable in respect of these transactions is summarised in the table below.

11. Financial instruments

The fair values of financial assets and financial liabilities, together with the carrying amounts in the Summary Group Balance Sheet at 31 December 2015 are as follows:

All of the Group's debt is due within one year (2014: €8,000,000 due after more than one year).

Fair value of financial instruments carried at fair value

In accordance with IFRS 13 Fair Value Measurement, financial instruments recognised at fair value are analysed between those based on quoted prices in active markets for identical assets or liabilities (Level 1); those involving inputs other than quoted prices that are observable for the assets or liabilities, either directly or indirectly (Level 2); and those involving inputs for the assets or liabilities that are not based on observable market data (Level 3). The following table sets out the fair value of all financial instruments whose carrying value is at fair value:

The fair value of hedging instruments entered into by the Group is measured in accordance with Level 2 and consist of foreign currency forward contracts and bunker fuel forward contracts.

Where derivatives are traded either on exchanges or liquid over-the-counter-markets, the Group uses the closing prices at the reporting date. Normally, the derivatives entered into by the Group are not traded on active markets. The fair values of these contracts are estimated using a valuation technique that maximises the use of observable market inputs, eg market exchange.

The fair value of deferred contingent consideration is measured in accordance with Level 3. Details of movements in the period are set out below.

Additional disclosures for Level 3 fair value measurements