Greencore Group PLC · LSE:GNC
Greencore — H1 FY2009 Earnings Presentation
19 slides from Greencore's earnings presentation, May 2009
Slide 1: Interim Results for the half year ended 27 March 2009
Interim Results for the half year ended 27 March 2009
Slide 2: Highlights
Highlights FINANCIAL BUSINESS Growth in continuing businesses Resilient performance in on a constant currency basis Convenience Foods with constant currency sales and Sales + 3% profit growth Operating profit + 5% Continued momentum in US Adjusted EPS flat on a constant business currency basis Good
Slide 3: Financial summary
Financial summary €m H1 H1 %Change FY09 FY08 CC* Restated Revenue 550.2 648.7 -3% Group operating profit 31.0 35.5 +4% Net finance costs** (12.5) (14.1) Share of associates 0.3 0.8 PBT 18.8 22.2 Tax (adjusted) (3.1) (3.2) PAT (result) 15.7 19.0 Adjusted EPS 7.4c 9.0c - * Constant currency ** Before
Slide 4: Convenience Foods
Convenience Foods Resilient first half in a difficult trading €m H1 H1 %Change %Change FY09 FY08 CC environment n Division provided 68% of Group operating profit n Constant currency sales growth of 7% excluding Q2 had greater consistency in discontinued ’factored’ sales Revenue* 385.8 440.9 -13% +3%
Slide 5: Ingredients
Ingredients Malt performance in line, with €m H1 H1 %Change %Change FY09 FY08 CC lower energy cost offsetting weaker deliveries Revenue* 159.6 166.8 -4% +4% Decision to exit Drummonds to free Operating 11.8 13.2 -11% +2% up capital profit* Property contribution down c. €1m in Margin 7.8% 7.9% period
Slide 6: Finance costs
Finance costs €m H1 FY09 H1 FY08 Interest (12.4) (15.6) Unwind discount to present value (0.1) 1.5 Finance cost before fair value and pensions (12.5) (14.1) Pension credit 0.6 4.5 Fair value of derivatives (22.9) (2.0) Net finance (34.8) (11.7) 5
Slide 7: Exceptional charge
Exceptional charge €m Profit/ Loss Cash in H1 Cash total Convenience Foods (7.8) (3.1) (3.1) Ingredients (15.3) (1.8) 4.4 Insurance receivable 1.8 - 3.7 Sugar related (3.8) (2.3) (4.6) Net gain (post tax) (25.1) (7.2) 0.4 6
Slide 8: EPS and dividend
EPS and dividend €cent H1 H1 Dividend rebased to payout ratio FY09 FY08 in range of 40-50% for year Adjusted EPS 7.4 9.0 Prudent approach to balance payout with medium-term Dividend 3.0 5.3 development capital needs 7
Slide 9: Cashflow
Cashflow €m H1 H1 FY09 FY08 Operating profit 30.1 35.3 Depreciation/Amortisation 14.8 14.8 Working capital (47.7) (46.6) Maintainance capex (3.9) (4.9) Pensions (3.5) (3.4) Other (1.0) 2.2 Free cashflow (11.2) 2.8 Enhancement capital (15.8) (15.9) Exceptionals (11.4) 81.8 Interest, tax & dividends (
Slide 10: Refinancing
Refinancing New €360m syndicate bank facility maturing April 2012 and €50m bilateral facility with expected maturity of August 2011 Increase of c. €3.0m interest expense after tax for FY09 Significant extension in maturity profile of lending facilities: €m 360 50 46 65 Aug 11 Apr 12 Oct 13 Oct 15 9
Slide 11: Operating review
Operating review 1 Resilient performance in European Convenience Foods Continuing businesses H1 FY09 €m % change CC 2 Margin recovery underway across Group Sales 544 + 3% Operating 31 + 5% 3 Positive momentum in the US profit 4 Strong Malt returns maintained 10
Slide 12: Resilient performance in European Convenience Foods
Resilient performance in European 1 Convenience Foods Market recovery evident across several key categories in Q2 Improved Q2 performance Our Group’s strong category market share positions defended Several notable new customer wins Retail channel (88% of revenue) and core grocery focus Portfolio wel
Slide 13: Resilient performance in European Convenience Foods
Resilient performance in European 1 Convenience Foods Market growth Relative Comments 12 wk 24 wk performance of Food Greencore Market performance significantly improved in Q2 to -2.6% -5.4% Several notable sandwich wins with key customers and Go Pre-packed sandwiches further development of salads a
Slide 14: Margin recovery underway across Group
Margin recovery underway across 2 Group Driving harder on manufacturing and Selectively driving through price supply chain programmes increases More than 300 initiatives across the Group Focused on categories where further in H1 inflation recovery required Broader roll-out completed of ‘Lean’ Effect
Slide 15: Positive momentum in the US
3 Positive momentum in the US 33% growth in underlying sales in H1 Number one player in north east region in fresh sandwiches, HMBF chilled entrées, salads & quiche First phase of transfer of European expertise completed Encouraging signs from initial 350 store trial of new chilled Weight Weight Wa
Slide 16: Strong Malt returns maintained
4 Strong Malt returns maintained Strong commercial performance n FY09 fully pre-sold n Lower energy costs offset by weaker deliveries (reflecting recent fall-offs in beer demand) n Greater than 60% of business already contracted for FY10 n Focus on strong domestic customers and growing selected expo
Slide 17: Greencore today
Greencore today New leadership teams embedded at all levels in the Group An enhanced financial and operational control environment Successful entry into the US convenience foods market and exciting early momentum Group debt facilities refinanced and increased at competitive rates Market positions de
Slide 18: Outlook
Outlook On track to deliver operating profit for FY09 in line with FY08 on a constant currency basis Summer period seasonally more important Interest expense higher post refinancing If EUR/GBP continues in 0.88-0.90 range, translation effect would be c. €6m on post-tax basis (as guided previously) A
Slide 19: Contact details
Contact details Patrick Coveney, Chief Executive Officer T: + 353 (0)1 6051045 E: patrick.coveney@greencore.com Geoff Doherty, Chief Financial Officer T: + 353 (0)1 6051018 E: geoff.doherty@greencore.com Eoin Tonge, Group Capital Markets & Corporate Communications Director T: + 353 (0)1 6051017 E: e