Slide 1: Results for the year ended 29 September 2023
RESULTS For the year ended 29 September 2023
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 1. Introduction Dalton Philips, CEO 2. Financial Review Jonathan Solesbury, Interim CFO 3. Strategic & Operating Update Dalton Philips, CEO 4. Outlook Dalton Philips, CEO 5. Q&A Dalton Philips, CEO Jonathan Solesbury, Interim CFO FY23 RESULTS | NOVEMBER 2023 3
Slide 4: Introduction
INTRODUCTION Dalton Philips, CEO
Slide 5: Strong performance in FY23
Strong performance in FY23 Overview Enablers Manufactured volume growth of 0.5% Embedding functional structure outperforming the market – notably sandwich growth of 3.5% Recovery of inflation, alongside proactive Leadership team reset product and customer portfolio management Ongoing tighter cost co
Slide 6: Financial Review
FINANCIAL REVIEW Jonathan Solesbury, Interim CFO
Slide 7: FY23 key financial metrics
FY23 key financial metrics Group key financial metrics Pro Forma Revenue Growth(1) Adjusted Operating Profit 13.5% £76.3M Reported Revenue Growth 10.0% +5.7% vs FY22 Adjusted EPS Free Cash Flow 9.3P £56.8M +0.1p vs FY22 -£1.9m v FY22 ND:EBITDA(1) ROIC 1.2X +0.3x vs FY22 8.9% +50bps vs FY22 (1) Pro F
Slide 8: Financial summary
Financial summary Metric FY23 FY22 Change Group Revenue £1,913.7m £1,739.6m +10.0% Pro Forma Revenue Growth(1) +13.5% Adjusted EBITDA £132.8m £126.9m +4.6% Adjusted Operating Profit £76.3m £72.2m +5.7% Adjusted Operating Margin (%) 4.0% 4.2% -20bps Adjusted Profit Before Tax £58.1m £59.8m -2.8% Grou
Slide 9: Revenue momentum driven by inflation recovery and volume growth
Revenue momentum driven by inflation recovery and volume growth +10.0% Highlights • High-single digit revenue growth across Food to Go categories and low teen revenue growth across Other Convenience +0.7% (1.9%) categories, supporting overall revenue growth of 10.0% +11.3% • Significant recovery of
Slide 10: Successful recovery and mitigation of inflation
Successful recovery and mitigation of inflation Highlights Easing inflation across H2 Successful inflation recovery • H2 FY23 saw an easing in the overall rate of inflation across the Group • Overall inflation at low double digit % of total cost base in FY23 • Inflation remains significant across la
Slide 11: Solid cash generation
Solid cash generation £m 160 FCF Conversion 140 43% 2.2 120 26.6 100 10.9 20.3 80 11.1 132.8 60 15.6 6.3 40 56.8 20 0 Adjusted Net Working Maintenance Exceptional Interest Pension Leases Other Free Cash EBITDA Capital Capex Cashflows & Tax Flow(1) (1) Excluding strategic capex FY23 RESULTS | NOVEMBE
Slide 12: Net debt reduced and leverage within medium target range
Net debt reduced and leverage within medium target range £m 0 £m ND:EBITDA 600 483 1.2x -20 500 -40 400 300 -60 154 200 -80 -154.0 100 -180.0 0 -100 Committed Facilities Net Debt -120 Revolving Credit Facilities Private Placement Notes -10.8 Net Debt (ex lease liabilities) Other Bank -140 56.8 -30.1
Slide 13: Capital allocation
Capital allocation Ensuring leverage remains within medium term leverage target* of 1.0-1.5x Prioritise organic investment across strategic capex, IT and sustainability Will continue to return value to shareholders through share buyback and or dividends On-going value return of up to £15m commenced
Slide 14: Strategic & Operating Update
STRATEGIC & OPERATING UPDATE Dalton Philips, CEO
Slide 15: Continued progress, building on our strong foundations
Continued progress, building on our strong foundations No. 1 in: Leading market positions in attractive, growing Sandwiches categories Deep, long-term partnerships with all major UK Italian retailers ready meals New management team focused on improving profitability and returns Own-label ambient coo
Slide 16: Greencore outperforms the market
Greencore outperforms the market Volume growth 52 weeks to 1 October 2023 Market Greencore ~3% 3.5% 0.5% -0.7% Food to go Greencore Group Greencore -2.7% Food to go market (manufactured) sandwiches, wraps market projected and rolls CAGR 23-28(1) Grocery market Grocery volumes have declined in the fa
Slide 17: Three horizon framework for recovery and growth
Three horizon framework for recovery and growth 1 Stabilise 2 Rebuild 3 Grow Horizon 1 – FY23 Horizon 2 – FY24-26 Horizon 3 – FY24-28 Grow revenue and cash generation to provide strategic Rebuild profitability and flexibility, by: Stabilise the business by: returns by: Broadening existing • Recove
Slide 18: Resilient business model underpins increase in operating profit
Horizon 1: Stabilise 1 Resilient business model underpins increase in operating profit Volume: Positive relative performance across our key categories Revenue Price: Recovery of the vast majority of inflation Portfolio mix: Targeted product innovation alongside customer Operating product and portfol
Slide 19: Prioritising rebuild of profitability and returns
Horizon 2: Rebuild 2 Prioritising rebuild of profitability and returns Material upside to regaining historic levels of profitability and returns Our Horizon 2 framework Where we play Adjusted operating profit (£m) Portfolio Selection & Growth +30 How we win Commercial Operational Cost Excellence Exc
Slide 20: Reviewing and re-balancing activity by returns across the portfolio
Horizon 2: Rebuild - Portfolio 2 Reviewing and re-balancing activity by returns across the portfolio • Rationalising low return contracts, enhancing Customers margin & • Releasing capacity for future growth Contracts • Rigorous decision making on allocation of capacity • Reviewing and optimising low
Slide 21: Amplifying Commercial Excellence
Horizon 2: Rebuild - Commercial 2 Amplifying Commercial Excellence c.400 New SKUs • Exposure to structurally outperforming launched in Volume & categories FY23 with Growth • Deepening of selected partnerships +1p.p. Higher margin • Innovation driving value for us and for vs. core portfolio customers
Slide 22: Operational Excellence agenda reset
Horizon 2: Rebuild - Operations 2 Operational Excellence agenda reset 1 2 3 4 Factory Model Lighthouse (pilot) Operational Horizontal Diagnostic to sites leading the Excellence pillars deployment across identify opportunity way in FY24 deployed the network • Detailed diagnostic • Four sites selected
Slide 23: Significant investment in tech-enabled processes
Horizon 2: Rebuild - Tech 2 Significant investment in tech-enabled processes Our technology landscape is ...but we are addressing this immature... through focused investment Complex and disparate IT ecosystem Material capability unlocks (e.g. ERP built across multiple acquisitions migration from 200
Slide 24: Sustainability strategy built on three pillars
Horizon 2: Rebuild - Sustainability 2 Sustainability strategy built on three pillars Pillar Sourcing with Integrity Making with Care Feeding with Pride FY23 • Calculated soy footprint • Focused on priority areas • Developed Healthy and for the first time – energy, food waste and Sustainable Diets ro
Slide 25: Strategic growth drivers in our core and beyond
Horizon 3: Grow 3 Strategic growth drivers in our core and beyond Leveraging existing customer partnership development with greater exposure to growth Growth trajectory to be enhanced through targeted investment in higher growth portfolios, categories and channels Disciplined capital allocation will
Slide 26: Key messages
Key messages 1 Horizon 1: We have stabilised the business in FY23, with a clear framework to further rebuild 2 Horizon 2: A focus on returns across our portfolios will augment profitability and strategic focus 3 Horizon 3: Increased cash generation coupled with disciplined capital allocation to prov
Slide 27: Outlook
Greencore OUTLOOK Dalton Philips, CEO Making every day tas beler
Slide 28: Outlook
Outlook Exited FY23 with a more stable business, underpinned 1 by strong foundations to drive future delivery 2 Focus remains on returning Group towards historic absolute levels of profitability across Horizon 2 3 Investing c.£10m in technology roadmap during FY24 “We are pleased with the start of t
Slide 29: Q&A
Greencore” Q&A
Slide 30: Appendix 1: Supplementary financial information
APPENDIX 1 Supplementary financial information
Slide 31: Continued inflation recovery across Food to Go and Other Convenience categories
Continued inflation recovery across Food to Go and Other Convenience categories Food to Go Other Convenience categories categories Food to Go Reported revenue increased by 7.9% driven by: +7.9% +14.3% • Continued inflation recovery • Strong volume growth across sandwiches +0.4% (3.6%) • New business
Slide 32: FY23: other financial items
FY23: other financial items £m FY23 FY22 Highlights Net finance costs (20.8) (12.3) Tax (before exceptional items) (10.5) (10.5) • Net finance costs increased due to increasing interest rates in the Group exceptional items (after tax) (5.5) (13.5) market • Effective tax rate 21% (FY22:19%) • Net exc
Slide 33: FY23 cashflow
FY23 cashflow £m FY23 FY22 Opening Net Debt (excluding lease liabilities) 180.0 183.1 Adjusted EBITDA 132.8 126.9 Working capital 2.2 2.0 Maintenance capex (26.6) (16.9) Exceptional cashflows (10.9) (13.6) Interest/tax (20.3) (14.5) Pension (11.1) (11.5) Leases (15.6) (17.3) Other 6.3 3.6 Free Cash
Slide 34: FY23 balance sheet highlights
FY23 balance sheet highlights £m FY23 FY22 Net Debt 199.0 228.0 Net Debt (excluding lease liabilities) 154.0 180.0 Net Debt: EBITDA (x)1 1.2 1.5 Pension deficit (net of deferred tax) 12.8 10.4 Average Invested Capital 678.1 695.0 ROIC (%) 8.9 8.4 1 as measured under financing agreements FY23 RESULTS
Slide 35: FY24 guidance
FY24 guidance £m FY24 FY23 Depreciation and Amortisation1 c.£55m £56.5m Capital Expenditure c.£50m £37.4m Cash Interest2 c.£24m £16.4m P&L Interest2 c.£22m £16.9m Cash Tax c.£4m £2.7m Effective Tax Rate c.25% 21% Pension Deficit Contributions & Costs c.£12-15m £11.1m 1 excludes customer related amor
Slide 36: 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 FY22) Adjusted Earnings is calculated as Profit attributable to equity holders
Slide 37: Definition of APMs continued
Definition of APMs continued… Capital Expenditure Net Debt and Net Debt Excluding Lease Liabilities The Group defines Maintenance Capital Expenditure as the expenditure required for Net Debt comprises current and non–current borrowings less net cash and cash the purpose of sustaining the operating c
Slide 38: IR Contacts Calendar
IR CONTACTS CALENDAR Curtis Armstrong Q1 24 Trading Update 25 January 2024 Director of FP&A and IR Half Year Period End 29 March 2024 David Marshall Half Year Results 21 May 2024 Head of Capital Markets investor.relations@greencore.com 38
Slide 39: Appendix 2: Greencore at a glance
APPENDIX 2 Greencore at a glance
Slide 40: FY23 RESULTS | NOVEMBER 2023
FY23 RESULTS | NOVEMBER 2023 40
Slide 41: 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 materials Our Great Food is underpinned by our dedication to We design products with taste, freshness, c.13,600 we use in the products we supply to our customers