8 FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES Financial instruments held at fair value shown according to the fair value hierarchy is provided below. Financial assets and liabilities held at fair value are categorised by the valuation methodology applied in determining their fair value. Where possible, quoted prices in active markets are used (level 1). Where such prices are not available, the asset or liability is classified as level 2, provided all significant inputs to the valuation model used are based on observable market data. If one or more of the significant inputs to the valuation model is not based on observable market data, the instrument is classified as level 3. | | | | | | Level 1 | Level 2 | Level 3 | Total | As at 30 June 2026 | £m | £m | £m | £m | | | | | | Financial assets at fair value through other comprehensive income: | | | | | Unlisted equity investments | — | — | 69 | 69 | | | | | | Financial assets at fair value through profit or loss: | | | | | Held for trading derivatives that are not in a designated and effective hedging relationship | — | 23 | — | 23 | Cash and cash equivalents (money market funds) | 173 | — | — | 173 | Derivatives designated and effective as hedging instruments: | | | | | - fair value hedge | — | 2 | — | 2 | - cash flow hedge | — | 13 | — | 13 | - net investment hedge | — | 16 | — | 16 | Total financial assets | 173 | 54 | 69 | 296 | | | | | | | Level 1 | Level 2 | Level 3 | Total | As at 30 June 2026 | £m | £m | £m | £m | | | | | | Financial liabilities at fair value through profit or loss: | | | | | Held for trading derivatives that are not in a designated and effective hedging relationship | — | (5) | — | (5) | Derivatives designated and effective as hedging instruments: | | | | | - fair value hedge | — | (42) | — | (42) | - cash flow hedge | — | (22) | — | (22) | - net investment hedge | — | (72) | — | (72) | Total financial liabilities | — | (141) | — | (141) |
| | | | | | Level 1 | Level 2 | Level 3 | Total | As at 31 December 2025 | £m | £m | £m | £m | | | | | | Financial assets at fair value through other comprehensive income: | | | | | Unlisted equity investments | — | — | 67 | 67 | | | | | | Financial assets at fair value through profit or loss: | | | | | Held for trading derivatives that are not in a designated and effective hedging relationship | — | 26 | — | 26 | Cash and cash equivalents (money market funds) | 608 | — | — | 608 | Derivatives designated and effective as hedging instruments: | | | | — | - fair value hedge | | 3 | | 3 | - cash flow hedge | — | 11 | — | 11 | - net investment hedge | — | 47 | — | 47 | Total financial assets | 608 | 87 | 67 | 762 | | | | | | | Level 1 | Level 2 | Level 3 | Total | As at 31 December 2025 | £m | £m | £m | £m | | | | | | Financial liabilities at fair value through profit or loss: | | | | | Held for trading derivatives that are not in a designated and effective hedging relationship | — | (3) | — | (3) | Derivatives designated and effective as hedging instruments: | | | | | - fair value hedge | — | (24) | — | (24) | - cash flow hedge | — | (10) | — | (10) | - net investment hedge | — | (28) | — | (28) | Total financial liabilities | — | (65) | — | (65) |
The methods and assumptions used to estimate the fair values of significant financial instruments on the balance sheet are consistent with those applied for the year ended 31 December 2025. The equity investment that is valued at level 3 is a passive investment in a private entity acquired as part of the consideration received for the divestment of ChapStick. In the absence of specific and active market data, the investment is held at fair value based on a multiple of the latest available rolling twelve month earnings before interest, depreciation and amortisation (EBITDA) and adjusted for net debt, which approximates to fair value. There are no material differences between the carrying value of the Group’s financial assets and liabilities and their estimated fair values, with the exceptions of bonds, for which the carrying values and fair values are set out in the table below: | | | | | | | As at 30 June 2026 | | As at 31 December 2025 | | Carrying | | | Carrying | | | value | Fair value | | value | Fair value | | £m | £m | | £m | £m | Bonds | 7,380 | 6,987 | | 8,102 | 7,730 |
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