Slide 1: For the half year ended 25 March 2022
For the half year ended 25 March 2022
Slide 2: Disclaimer ─ forward looking statements
Disclaimer ─ forward looking statements Certain statements made in this document are, or may be deemed to be, forward‐looking. These represent expectations for the Group’s business, and involve known and unknown risks and uncertainties, many of which are beyond the Group’s control. The Group has bas
Slide 3: Today's agenda
Today’s agenda H1 22 Highlights Gary Kennedy, Executive Chair Financial Review Emma Hynes, CFO Operating & Strategic Update Kevin Moore, Deputy CEO Outlook Emma Hynes, CFO Note: The Group uses Alternative Performance Measures ('APMs') which are non-IFRS measures to monitor the performance of its ope
Slide 4: Gary Kennedy, Executive Chair
Gary Kennedy, Executive Chair
Slide 5: Executive summary
Executive summary Advanced our economic model in H1 22 • Revenue above pre-COVID levels FTG revenues now above pre-COVID levels • Onboarding new business wins successfully, alongside active product and category development 120% • Customer service levels restored, improved profit conversion year on y
Slide 6: Financial Review - Emma Hynes, CFO
FINANCIAL REVIEW Emma Hynes, CFO ~ Making everydaytaste =
Slide 7: H1 key financial metrics
H1 22 key financial metrics Pro Forma Revenue Growth Adjusted Operating Profit Adjusted EPS +34.9% £17.2m 1.8p +£17.0m +3.2p Free Cash Flow ND:EBITDA* ROIC £-17.8m FCF 2.1x 6.3% Conversion +£5.8m (12mth) (H1 21:7.2x) +690bps 71% *As per financing agreements, excluding lease liabilities Note: all com
Slide 8: Much improved year on year performance
Much improved year on year performance £m unless otherwise stated H1 22 H1 21 Change Group Revenue 770.8 577.1 +33.6% Pro Forma Revenue Growth (%) +34.9% Adjusted EBITDA 43.8 26.5 +65.3% Adjusted Operating Profit 17.2 0.2 +£17.0m Adjusted Operating Margin (%) 2.2% 0.0% +220bps Adjusted Profit / (Los
Slide 9: Strong revenue momentum across FTG and convenience categories
Strong revenue momentum across FTG and convenience categories Highlights 771 269 • Strong revenue momentum in both food to 577 go and other convenience categories Other Convenience (£m) 238 • Solid execution against new business wins 502 • Pro forma FTG growth driven by recovery FTG (£m) 339 in unde
Slide 10: Some progress in profit conversion despite challenging environment
Some progress in profit conversion despite challenging environment Profit performance Margin performance £m % 50 H1 21 10 H1 21 45 H1 22 9 H1 22 40 8 35 7 30 6 25 5 43.8 20 4 15 3 5.7 26.5 4.6 10 17.2 2 5 1 2.2 0 0.2 0 0.0 Adjusted EBITDA Adjusted Operating Profit Adjusted EBITDA % Adjusted Operatin
Slide 11: Working effectively through an inflationary environment
Working effectively through an inflationary environment …we are recovering inflation Currently in ‘third wave’ of inflationary mechanistically, via direct negotiation, challenge… via internal productivity… Wave 3 Wave 2 Distribution Wave 1 Utilities Labour Raw Materials & Packaging Autumn Winter Spr
Slide 12: Adjusted EPS growth driven by increased profits
Adjusted EPS growth driven by increased profits Pence 0.5 2.5 3.5 2.0 0.1 1.8 -0.1 -0.7 -0.1 1.5 1.0 0.5 0.0 -0.5 -1.0 -1.5 -1.4 Adjusted Adjusted EBITDA D&A Finance costs Tax Other Shares Adjusted EPS H1 21 EPS H1 22 H1 22 RESULTS | MAY 2022 12
Slide 13: Cash outflow in H1, as anticipated – with strong conversion over the last 12 months
Cash outflow in H1, as anticipated – with strong conversion over the last 12 months FCF £m Conversion 45 43.8 (12mth) 40 71% 35 30 25 20 15 10 5 -34.8 0 -6.0 -0.3 -5 -7.7 -10 -5.8 -15 1.7 -20 -17.8 -8.7 -25 -30 Adjusted Net Working Capital Maintenance Capex Exceptional Interest & Tax Pension Leases
Slide 14: Free cash outflow, strategic capex drive increase in H1 Net Debt
Free cash outflow, strategic capex drive increase in H1 Net Debt 0 -20 -40 -60 -80 -100 -120 -140 -160 -180 59.6 -183.1 -200 -17.8 0.0 -220 -12.6 -3.0 -2.8 -219.3 -240 -242.7 -260 -280 -53.0 -272.3 £m Net Debt FY21 Lease Net Debt Free Cash Strategic Equity M&A FX/Other Net Debt Lease liabilities Net
Slide 15: Strong year on year progression in deleveraging
Strong year on year progression in deleveraging H1 22 highlights £m 600 570* • Strong year on year progression in deleveraging, from 7.2x to 2.1x, on ND:EBITDA 500 improved profitability 2.1x 400 • Cash and undrawn facilities of £349.5m at end of H1 22 300 219 • Weighted average maturity of debt hea
Slide 16: Capital management framework
Capital management framework • Commitment to recommence value return in FY22 DISCIPLINED • Further deleveraging remains a key priority ORGANIC AND • Medium term leverage target of 1.0-1.5x INORGANIC INVESTMENT • Intention to recommence value return of up to 1.0 – 1.5X PROGRESSIVE £50m over the next
Slide 17: Kevin Moore, Deputy CEO
Kevin Moore, Deputy CEO
Slide 18: We have outperformed our markets
We have outperformed our markets H1 22 performance versus H1 19 Growth ahead of overall market • Attractive customer, portfolio and category mix • Growth balanced across FTG and other convenience categories 9.5% 9.8% FTG market now approaching pre COVID levels UK Grocery Greencore • FTG market value
Slide 19: New business wins supporting growth…
New business wins supporting growth… H1 22 highlights +8% • Underlying FTG outperformance ~95% of augmented by new business wins pre COVID • Annualised revenue run-rate: ─ c£110m from onboarded FTG wins ─ c£120m total Group • Focus on management of network to optimise output • Customer service level
Slide 20: …while we continue to drive product and category development
…while we continue to drive product and category development H1 22 RESULTS | MAY 2022 20
Slide 21: Strategic capital investment programme
Strategic capital investment programme Multi-year capital Adding c.70 SKUs to our ready investment of c.£30m across meals and salads offering; Investment on track for three key sites to onboard expanding meals capacity by completion in Q4 22 new business c.30% H1 22 RESULTS | MAY 2022 21
Slide 22: Better Greencore
Better Greencore Multi-phase programme to drive profit improvement • Three areas of focus across multiple workstreams • organisation model and overheads; 1 2 3 Organisation Output Technology- • output optimisation; model & optimisation enabled overheads efficiencies • technology- enabled efficiencie
Slide 23: Making progress in our Better Future Plan
Making progress in our Better Future Plan FY22 roadmap • Committing to 100% deforestation free supply chain by 2025, signatory of Soy Manifesto By 2030 we will source every • Commitment made to source 100% of our eggs, cage- ingredient from a sustainable free by 2025 and fair supply chain H1 22 prog
Slide 24: Emma Hynes, CFO
Emma Hynes, CFO . Se a =
Slide 25: Outlook
Outlook • Encouraging revenue momentum and improved profit conversion entering peak seasonal trading • Strong recovery to date against inflationary challenge • Profit conversion underpinned by Better Greencore programme • Anticipate FY22 outturn in line with current market expectations • Continued f
Slide 26: Q&A
Q&A
Slide 27: Supplementary financial information
Supplementary financial information
Slide 28: H1 22: other financial items
H1 22: other financial items Highlights £m H1 22 H1 21 Net finance costs (6.2) (9.7) • Lower net bank interest payable as debt levels reduced, with lower associated rates Tax (before exceptional items) (1.7) 2.0 • Effective tax rate 19% (H1 21:18%) Group exceptional items (after tax) (6.5) 9.9 • Net
Slide 29: H1 22 cashflow
H1 22 cashflow £m H1 22 H1 21 Opening Net Debt (excluding lease liabilities) 183.1 350.5 Adjusted EBITDA 43.8 26.5 Working capital (34.8) (21.1) Maintenance capex (6.0) (7.9) Exceptional cashflows (0.3) (2.4) Interest/tax (7.7) (9.2) Pension (5.8) (3.0) Leases (8.7) (7.9) Other 1.7 1.4 Free Cash Flo
Slide 30: H1 22 balance sheet highlights
H1 22 balance sheet highlights £m H1 22 H1 21 Net Debt 272.3 332.1 Net Debt (excluding lease liabilities) 219.3 271.3 Net Debt: EBITDA (x)1 2.1 7.2 Pension deficit (net of deferred tax) 8.7 55.7 Average Invested Capital 743.5 758.6 ROIC (%) 6.3 (0.6) 1 as measured under financing agreements H1 22 RE
Slide 31: Definitions of APMs
Definitions of APMs The Group uses the following Alternative Performance Measures (‘APMs’) which are non-IFRS measures to monitor the performance of its operations and of the Group as a whole Pro Forma Revenue Growth (vs FY21) Adjusted Profit Before Tax Pro Forma Revenue Growth adjusts reported reve
Slide 32: Definitions of APMs (continued)
Definitions of APMs (continued) Capital Expenditure Net Debt and Net Debt Excluding Lease Liabilities The Group defines Maintenance Capital Expenditure as the expenditure Net Debt comprises current and non–current borrowings less net cash and cash required for the purpose of sustaining the operating
Slide 33: IR Contacts & Calendar
IR CONTACTS & CALENDAR Emma Hynes Chief Financial Officer H1 22 Results 24 May 2022 Jack Gorman Q3 22 Trading Update 26 July 2022 Head of Investor Relations Full Year Period End 30 September 2022 FY22 Results 29 November 2022 investor.relations@greencore.com +353 1 605 1000 H1 22 RESULTS | MAY 2022
Slide 34: Greencore at a glance
Greencore at a glance
Slide 35: FY20 Results | November 2020
FY20 RESULTS | NOVEMBER 2020 35
Slide 36: Food to go categories, other convenience categories, distribution
Food to go categories We operate 13 manufacturing units across nine locations, including eight sandwich units, three salad units and two sushi focused units. Other convenience categories We operate eight manufacturing units across seven locations, comprising three chilled ready meal units, two chill
Slide 37: Our business model
Our business model Our inputs Sourcing with Integrity Making with Care Feeding with Pride People We are committed to ensuring that the raw Our Great Food is underpinned by our dedication We design products with taste, freshness, c.13,000 materials we use in the products we supply to to food safety,
Slide 38: Our strategy defines the direction of the Group
Our strategy defines the direction of the Group Growth Our leadership positions in attractive and structurally growing food categories underpin a strategy that combines strong organic growth potential with disciplined strategic investment Relevance Our model of embedded, long term customer partnersh
Slide 39: Our differentiators drive our strategy
Our differentiators drive our strategy People at the Core By embedding a safety culture, providing inspiring leadership and having engaging and effective teams, we ensure that people are at the core of our business Sustainability Sustainability underpins all areas of our business from sourcing with