Slide 1: FY20 Results: 52 weeks ended 28 March 2020
- FOR THE 52 WEEKS ENDED |~ 28 MARCH 2020 .*.
Slide 2: Agenda
AGENDA INTRODUCTION AND COVID-19 UPDATE Adam Couch, CEO FY20 HIGHLIGHTS Adam Couch, CEO FINANCIAL REVIEW Mark Bottomley, Finance Director COMMERCIAL UPDATE Jim Brisby, Commercial Director OPERATING & STRATEGIC REVIEW Adam Couch, CEO Q&A DISCLAIMER: Certain statements in this presentation are forward
Slide 3: Protecting Our Teams During COVID-19
PROTECTING OUR TEAMS DURING COVID-19 « Health & Safety is our number one priority + All our colleagues are designated ‘key workers’ + New measures introduced in line with evolving Government guidance: - social distancing measures and revised working practices - additional personal protective equipme
Slide 4: Providing Continuous Employment
PROVIDING CONTINUOUS EMPLOYMENT £500 bonus payable to each of our site-based colleagues No recourse to Government Job Retention Scheme 52 weeks ended 28 March 2020 Working with customers to manage short-term demand increases Optimise production to maximise output SUPPORTING OUR COMMUNITIES Providing
Slide 5: Adam Couch, Chief Executive Officer
DAM COUCH. Z ge OFFICER St *
Slide 6: FY20 Highlights
FY20 HIGHLIGHTS Strong revenue growth and earnings momentum New Eye primary poultry facility commissioned as planned in Q3, with successful ramp-up in Q4 Far East export revenue 122% ahead Record capital expenditure of £101m to provide platform for continued growth Continuation of substantial invest
Slide 7: Trading Record 1990-2020
TRADING RECORD 1990 — 2020 ADJUSTED PROFIT BEFORE TAX' (£M) DIVIDEND PER SHARE (pence) 30 YEARS OF UNBROKEN ol DIVIDEND GROWTH = 1. Excludes IAS 41 movements on biological assets and acquisition related amortisation in 2020 and 2019 19 5) >) 75 52 weeks ended 28 March 2020
Slide 8: Financial Review
Slide 9: FY20 Summary
FY20 SUMMARY Revenue 1,667.2 1,437.1 +16.0% Like-for-like revenue growth’ +13.0% Adjusted gross margin? 13.3% 13.0% +30bps Adjusted operating profit? 105.1 92:3) +13.9% Adjusted operating margin2? 6.3% 6.4% -12bps Adjusted profit before tax 102.3 92.0 411.2% Effective tax rate 20.5% 19.5% +94bps Adj
Slide 10: FY20 Revenue
FY20 REVENUE REVENUE BRIDGE (£M) + Volume growth reflects new contract +3.4% +9.6% +3.0% wins, new product launches and strong export growth + Price/mix benefit driven by inflation 1379 43.4 - es recovery, strong export pricing and improved poultry product mix + Acquisitions add £43.4m to revenue CA
Slide 11: FY20 Margin Performance
FY20 MARGIN PERFORMANCE MARGIN PERFORMANCE (%) @ ryio MM Fy20 MM IFRs16 ADJUSTED GROSS MARGIN’? ADJUSTED EBITDA MARGIN® ADJUSTED OPERATING MARGIN‘? + Gross margin improvement primarily reflects accretive acquisitions, strong export margin, productivity gains and a 7 bps benefit from IFRS 16 Leases p
Slide 12: Operating Cash Flow Bridge
OPERATING CASH FLOW BRIDGE 140 » 120 + 100 | £M 80 | 60 - ‘52 weeks ended 28 March 2020 12
Slide 13: Net Debt Bridge
NET DEBT BRIDGE 200 4 155.3 150 7 Eas (23) (93, 100 - (27.7) 50 - 6.3 2M O 971) P| (22.6) (50) ~ (100) - (67.2) (9.0) (0.4) L] 50) (65.9) (146.9 -9) -9) NS ra & a « * ot a? ° oe & os ee se ws cs ww ee w & se os ye w 3 ee ~ so? ye 52 weeks ended 28 March 2020 13
Slide 14: Capital Expenditure
Fresh Pork Convenience Gourmet Products Poultry Gross Capex Fixed asset sale proceeds Receipt of government grant Net Capex 1.3 3315 46 CAPITAL EXPENDITURE 19.2 245}5] 44 6¥25} 79.2 (0.8) (0.4) 738.0 ‘52 weeks ended 28 March 2020 £9.3 million invested across the three pork primary processing facilit
Slide 15: Financial Resilience
FINANCIAL RESILIENCE ROB NCE SHEET + Low leverage with Net debt / Adjusted EBITDA ratio 0.5x' + Strong liquidity with headroom of £119 million under unsecured facilities, including additional £40 million secured in the year + Access to a further £40 million available on same terms + Majority of faci
Slide 16: Commercial Update
Slide 17: Dynamic Retail Landscape
DYNAMIC RETAIL LANDSCAPE T L GROCERY RETAILER GROWTH 4 + Total growth in retail +2.7% for 52 weeks; 2 15 panic buying due to COVID-19 in final week S10 26 + Strong discounter growth continues 3 . 2 o 8 + M&S performance improved as they modernised aa their food offer oc 45 64% of market . 24 33 Mark
Slide 18: Sales by Category & Channel
SALES BY CATEGORY & CHANNEL CRANSWICK SALES 2019-20 mm Fresh Pork" 422.5% ar Convenience” & +18.8% D Gourmet Products™ 46.5% &+8.6% J Poultry™ CHANGE CATEGORY VALUE VOLUME a t5.4% 411.0% 46.4% W -0.8% Fresh pork performance driven through strong export and wholesale sales, with modest growth in reta
Slide 19: Back to Basics
BACK TO BASICS 52 weeks ended 28 March 2020 60% HIGH ADAPTATION TO COVID-19 WAYS OF LIFE 40% SOCIALLY NERVOUS HIGH FINANCIAL CONFIDENCE ~ CELEBRATING NORMAL LOW ADAPTATION TO COVID-19 WAYS OF LIFE 7< 19
Slide 20: Strong Category Sales Due to COVID-19 in FY21 Q1
STRONG CATEGORY SALES DUE TO COVID-19 IN FY21 Q1 RETAILER SALES GROWTH (£ £1,000 £950 £900 £800 £700 £600 £500 £400 £300 £200 £100 £0 £522 £518 Actual growth (£M) — SUMMARY OF CATEGORY PERFORMANCE 50 43.1 38.3 40 + Fastest growth in grocery sales for over 25 years + 500M extra meals per week eaten i
Slide 21: Second Nature
SECOND NATURE 58% REDUCTION IN FOOD WASTE >1,000 TONNES PLASTIC REMOVED _ ——— ——$——— ms 5 Th) ——", A g SS Se “et 1 ise. Bat Ged wm G second NATURE ape = | a f\™ A CHANGEMAKER i FOR FURTHER INFORMATION, VISIT www.thisissecondnature.co.u' 52 weeks ended 28 March 2020 2
Slide 22: Operating & Strategic Review
52 weeks ended 28 March 2020 22
Slide 23: Operating & Strategic Review
Slide 24: Strategy
STRATEGY PURPOSE FEEDING THE NATION WITH AUTHENTICALLY MADE, SUSTAINABLY PRODUCED FOOD; CREATED WITH PASSION CONSOLIDATION DRIVING THE CORE DIVERSIFICATION EXPANDING OUR OFFER INTERNATIONAL DEVELOPING NEW OPPORTUNITIES COMMITMENT TO VERTICALLY INTEGRATED SUPPLY CHAIN MODEL LONG-TERM CUSTOMER RELATIO
Slide 25: Consolidation: Farming Acquisitions
CONSOLIDATION FARMING ACQUISITIONS + Acquisition of Packington Pork in December 2019 - Specialises in outdoor bred pigs - Long standing relationship with Cranswick + Acquisition of remaining 50% share of White Rose Farms Joint Venture in February 2020 - Includes Buckle family’s pig farming and reari
Slide 26: Consolidation: Investing to Support Growth
CONSOLIDATION INVESTING TO SUPPORT GROWTH GOURMET PRODUCTS CONVENIENCE SUTTON FIELDS CONVENIENCE MILTON KEYNES = NEW BUSINESS WINS NEW BUSINESS WIN ADDITIONAL VOLUMES SECURED STRONG PRODUCT COMPLETION OF £14 MILLION INVESTMENT IN COOKERS, INNOVATION PIPELINE EXTENSION TO SUTTON FIELDS CHILLERS AND A
Slide 27: Diversification: Maximising Our Poultry Capability
DIVERSIFICATION MAXIMISING OUR POULTRY CAPABILITY + Commissioning of new industry leading facility in Eye, Suffolk, completed prior to year end + 1.1m birds processed per week, up from 0.5m in the previous facility + State-of-the-art automation to ensure safety, efficiency and sustainability + Compl
Slide 28: Diversification: Acquisition of Katsouris Brothers
DIVERSIFICATION ACQUISITION OF KATSOURIS BROTHERS + Premium supplier of predominantly plant-based Mediterranean food products « Enlarged Continental business with a significant non-meat product offering + Operates in strong growth categories including speciality cheese, dried pulses, cereals and oli
Slide 29: International: African Swine Fever
INTERNATIONAL AFRICAN SWINE FEVER + The number of new reported cases has been declining + COVID-19 is impacting restocking and production in China + China’s pork imports increased by 120% year-on-year in the first four months of 2020 Philipine Sea + Expectation for imports to further increase in 202
Slide 30: Summary and Outlook
SUMMARY AND OUTLOOK STRONG PERFORMANCE ONGOING INVESTMENT POSITIVE OUTLOOK rN = Strong Far East Investment in class-leading poultry Managing export growth facility & non-meat activities COVID-19 Robust performance in Expansion of vertical Growth strategy competitive domestic market supply chain on t
Slide 31: Our History
APPENDIX 1 OUR HISTORY ~~ 1970s 2 2003 1992 --- 1995 -- 2001 1980s see Established Move FT Sutton Simply Continental Sandwich Agri-Food into food — deli Sausages Fine Foods Factory business production cooked — Gourmet (animal meats Sausage feed) FA 2004 Jack Scaife —dry cured air dried bacon & 2005
Slide 32: Our Locations
BALLYMENA: 52 weeks ended 28 March 2020 MALTON SHERBURN HULL BARNSLEY. ‘=. BURY DENBIGH MILTON KEYNES: APPENDIX 2 OUR LOCATIONS HULL Fresh Pork, Preston Fresh Pork, Riverside Cooked Meats, Sutton Fields Gourmet Sausages, Lazenby’s Added Value Poultry, CCFP MALTON Gourmet Pastry, Yorkshire Baker SHER
Slide 33: Adjusted & Reported Earnings; Tax & Earnings per Share
APPENDIX 3 ADJUSTED & REPORTED EARNINGS; TAX & EARNINGS PER SHARE % 0) FY19 Adjusted operating profit 105.1 92.3 Headline tax rate 19.0 19.0 Net IAS 41 movement 54 (2.8) : Disallowed expenses 1.9 0.6 i Acquisition related amortisation (3.7) (2.7) : [ile SE Cle MS UUTELS (Oe) (22) Banana AaARAnAG on
Slide 34: Balance Sheet & Cash Flow
APPENDIX 4 BALANCE SHEET & CASH FLOW CASH FLOW (£M) FY20 FY19 BALANCE SHEET (£M) FY20 FY19 Property, plant & equipment 357.7 8291.2 Intangible assets 207.3 153.5 Right-of-use assets 64.8 - Biological assets 457 21.3 Working capital 97.7 78.9 Net (debt)/funds' (146.9) 63 Tax, grants, provisions, pens
Slide 35: Cash Allocation and Banking Facility
FY20 FY19 FY18 FY17 FY16 FY15 FY14 FY13 1. Excludes the proceeds from the issue of share options FREE CASH ACQUISITION / CASH INFLOW / FLOW NET CAPEX (DISPOSAL)? DIVIDEND PAID (OUTFLOW)! 115.8 873 111.7 72.4 83.4 Ey7/ 59.1 49.0 631.4 78.0 58.0 46.5 BERS) 20.4 274 30.5 391.4 2. Includes loan to joint
Slide 36: IFRS Impact
APPENDIX 6 IFRS 16 IMPACT IFRS 16 IMPACT ON FINANCIAL STATEMENTS. Impact on total assets 64.8 Impact on total liabilities' (65.2) Overall effect on net assets (0.4) Remove rental costs 9.4 Add depreciation (8.2) Impact on operating profit 1.2 Add lease interest costs (1.6) Impact on PBT (0.4) Impact
Slide 37: Corporate Activity: Acquisitions
ACQUISITION OF KATSOURIS BROTHERS + Acquired 26 July 2019 + Based in Wembley + Leading processor and multi-channel supplier of Continental and Mediterranean food products + Revenue of £68m for the year ended 30 June 2019 + Initial net cash consideration of £41.3m, a further £0.7m paid in H2, with fu
Slide 38: Global Pig Meat Forces
THE UK WAS 58% SELF-SUFFICIENT IN PORK PRODUCTION IN 2019 ‘SOURCE: USDA/AHDB 2019 APPENDIX 8 GLOBAL PIG MEAT FORCES ANNUAL PROCESSING NUMBERS BY REGION mage § a ‘52 weeks ended 28 March 2020 38
Slide 39: Market Overview
APPENDIX 9 ‘52 weeks ended 28 March 2020 MARKET OVERVIEW AVERAGE WEEKLY EU SPEC PRICES | WHEAT PRICE 2000-2020 — EU Ref Price 180 — UK Spec SPP 250 170 160 200 g 150 50 & 140 ® 2 130 100 a 120 110 50 100 ° 50 38838 8 gs5258 82858 8 8 ee °° se FFs SPSEESEEEREFsS SESE SSESEE EE 2014 2015 2016 2017 201
Slide 40: Cranswick: Great British Taste
a CRANSWICK Great British Taste www.cranswick.plc.uk Cranswick is a leading and innovative supplier of premium, fresh and added value food products. The business employs over 11,800 people and operates from sixteen well invested, highly efficient production facilities in the UK. Cranswick was formed