Slide 1: Results for the year ended 26 September 2014
Results For the year ended 26 September 2014
Slide 2: Agenda
AGENDA Highlights Patrick Coveney, CEO Financial Review Alan Williams, CFO Strategy, Operating Review & Outlook Patrick Coveney, CEO Q&A Open to the Floor 2
Slide 3: Highlights
HIGHLIGHTS Strong performance Significant strategic investments 3
Slide 4: Financial Review
FINANCIAL REVIEW Alan Williams Chief Financial Officer
Slide 5: Financial Summary
FINANCIAL SUMMARY FY14 Versus FY13 Revenue £1,273.5m +6.4% Operating profit1 £82.9m +11.4% Operating margin1 6.5% +30 bps Adjusted PBT2 £68.7m +15.5% Adjusted earnings per share2 15.9p +13.6% Dividend per share 5.45p +13.5% Net debt £212.1m -£20.7m ROIC 13.7% +100bps 1. EBITDA, operating profit and
Slide 6: Convenience Foods
CONVENIENCE FOODS Strong performance of Convenience Foods division FY14 FY13 FY14 Like for like revenue growth* £m £m % change Revenue 1,213.4 1,129.2 +7.5% 15.3% Operating 80.7 72.2 +11.8% 7.5% 8.4% profit1 Operating 6.7% 6.4% +30 bps margin1 UK US Convenience Foods Convenience Foods LFL revenue
Slide 7: Ingredients & Property
INGREDIENTS & PROPERTY Steady performance of Ingredients and Property % change FY14 FY13 Actual Constant Division represents 5% of £m £m currency currency Group activity Revenue 60.1 67.9 -11.5% -9.7% Operating 2.2 2.2 n/a n/a profit1 Revenue decline driven by Lower commodity prices in edible oi
Slide 8: Financing, Tax and Pensions
FINANCING, TAX AND PENSIONS Financing Bank interest payable fell to £14.9m (FY13: £15.5m): lower average net debt and lower effective interest rate Net finance charge including non cash items* of £15.4m (FY13: £16.8m) Tax Group effective tax rate of 1% (FY13: 0%**) Effective tax rate continu
Slide 9: Exceptional Items
EXCEPTIONAL ITEMS Income £m Statement Planned exit from Newburyport and Brockton US facilities (9.9) Transaction and integration costs of US acquisition (1.3) Disposal of Ministry of Cake (6.5) Disposal of Littlehampton property (3.5) Resolution of legacy insurance matter 3.8 Pension curtailment gai
Slide 10: EPS and Dividend
EPS AND DIVIDEND EPS FY14 FY13 Adjusted earnings 15.6% ahead Adjusted earnings2 £63.7m £55.1m Adjusted earnings per share up 13.6% Denominator for earnings 401.2m 393.6m per share Adjusted earnings per share2 15.9p 14.0p Dividend FY14 FY13 Final dividend proposed of 3.25 pence per share Total
Slide 11: Cashflow and Net Debt
CASHFLOW AND NET DEBT Net debt at 26 September 2014 of £212.1m - comfortably below 2.0 times Net Debt/EBITDA £m FY14 FY13 Analysis of capital expenditure EBITDA1 109.5 99.3 £m FY14 FY13 Working capital inflow 9.8 9.9 Base capex 34.6 34.4 Net capex (51.3) (34.4) Major capacity 16.7 - Interest & tax (
Slide 12: Borrowings Profile
BORROWINGS PROFILE Total committed facilities of £485m – weighted average debt maturity of 2.7 years as at 26 September 2014 Maturity of facilities at 26 September 2014, £m 300 250 280 200 150 100 50 60 50 55 40 0 FY16 FY16 FY19 FY20 FY22 October 2015 May 2016 October 2018 March 2020 October 2021
Slide 13: Summary - Financial Goals
SUMMARY - FINANCIAL GOALS Key Metrics Goal FY14 Outcome Key Drivers Successful customer initiatives & 5% 8.4% convenience store growth in UK Revenue* LFL LFL Roll out of major customer contract in the US Strong growth Operating Maintain 6.7% Improvements in lower margin Margin* above 6% part
Slide 14: Strategy, Operating Review and Outlook
STRATEGY, OPERATING REVIEW AND OUTLOOK Patrick Coveney Chief Executive Officer
Slide 15: Strategic delivery has created a focused, growing food to go leader
STRATEGIC DELIVERY HAS CREATED A FOCUSED, 1 GROWING FOOD TO GO LEADER • FY14 Group revenue of £1.3bn • LFL Convenience Foods growth of 8.4% UK UK UK US Ingredients Prepared Food to Go Grocery Food to Go & Property Meals c. % of run rate 40% 20% 20% 15% 5% revenue* Food to Go long term focus driven b
Slide 16: UK business focused on highest growth categories within food
OUR UK BUSINESS IS FOCUSED ON THE HIGHEST 1 GROWTH CATEGORIES WITHIN FOOD Estimated market size Estimated market growth (excluding beverages) 2013 / 2014 Sandwiches £6bn +10% High growth categories Out-of- home/FtG £15bn +5% Other out-of- home £65bn +0.3% consumption Rest of food £150bn -1.3% 1 Base
Slide 17: Growth underpinned by expansion in the convenience channel
THIS GROWTH IS UNDERPINNED BY EXPANSION 1 IN THE CONVENIENCE CHANNEL… Physical formats for leading grocers CAGR CAGR Number of stores CAGR 2014 -2017 2009 -2014 2011–13, % 13,419 371 7% 1% 11,360 360 2% 1% 5,020 8,761 Hypermarkets 252 4,681 Supermarkets 4,215 8% 5% 8,028 6,319 Convenience 4,294 2009
Slide 18: Underlying consumer trends that support growth in our categories
...AND BY UNDERLYING CONSUMER TRENDS 1 THAT SUPPORT GROWTH IN OUR CATEGORIES 1 Good value for money Affordable indulgence 2 3 Convenient to eat/snack Fresh and healthy 4 18
Slide 19: Reshaped US operations into a food to go focused business
WE HAVE RESHAPED OUR US OPERATIONS INTO 1 A FOOD TO GO FOCUSED BUSINESS 2008 2010 2012 - 2014 Entry into the Emergence of Focused, scaled-up US Market Food to Go Food to Go business • Acquisition of Home • Acquisition of On A • Acquisitions of MarketFare Foods, HC Made Brand Foods Roll Schau & Letti
Slide 20: Economics of our food to go business support our refined strategy
THE ECONOMICS OF OUR FOOD TO GO 1 BUSINESS SUPPORT OUR REFINED STRATEGY Revenue Growth - UK Food to Go Revenue Growth - US Food to Go 64.3% 58.0% 15.3% 9.8% 6.9% 22.5% 24.7% 4.4% FY11 FY12 FY13 FY14 FY11 FY12 FY13 FY14 1 Continued strong growth in the UK and a platform to materially grow our US busi
Slide 21: UK Convenience Performance
UK CONVENIENCE PERFORMANCE 2 STRONG PERFORMANCE IN CHALLENGING ENVIRONMENT Growth rates Performance driven by: 7.5% Strong market growth in food to go Multiple new customer initiatives delivering share growth in key 2.1% categories 1.1% Positive operating leverage UK food market (excl drinks)*
Slide 22: UK Convenience Performance: Divisional Highlights
UK CONVENIENCE PERFORMANCE 2 DIVISIONAL HIGHLIGHTS 1 Food to Go Division Strong revenue growth of 15.3% versus market growth of 9.5%: Successful re-launches with several key customers 44% New business wins Market share Expansion of Northampton food to go facility sandwiches 2 Prepared Meals
Slide 23: US Food to Go Performance
2 US FOOD TO GO PERFORMANCE... FY14 Focused on food to go categories to small store performance customers Revenue growth of 24.7%* (LFL growth of 15.3%) Rollout of major contract with key customer Planned exit of non-core product lines Increased focus on hot eating offerings Significant
Slide 24: Wide food to go footprint with fresh & frozen capabilities
...CREATING A WIDE FOOD TO GO FOOTPRINT 2 WITH FRESH & FROZEN CAPABILITIES SEATTLE, WA Announced November 2014 MINNEAPOLIS, MN NEWBURYPORT, MA Capability: Fresh & NPD centre Acquired February 2014 Acquired April 2008 Employees: 190 BROCKTON, MA Closing in FY15 Capability: Frozen Acquired December 20
Slide 25: Investments in capability and culture
INVESTMENTS IN CAPABILITY AND CULTURE TO 2 DELIVER STRATEGY AND FUTURE PERFORMANCE Large scale facility People and Process enhancement • Structures • Northampton • HR and talent • IT • Rhode Island • Culture & • Jacksonville communication • Lean Greencore • Seattle • Consumer & shopper insight 25
Slide 26: Outlook
3 OUTLOOK Confident in our ability to deliver profitable growth despite uncertain outlook for UK grocery retail market Further significant step up in capital expenditure on capacity, productivity and capability initiatives with execution a key area of focus Well positioned to deliver further p
Slide 27: Appendix
APPENDIX
Slide 28: About Greencore
ABOUT GREENCORE A leading manufacturer of convenience food in the UK and the US Strong market positions in the UK convenience food market across food to go, chilled prepared meals, chilled soups and sauces, ambient sauces & pickles, cakes & desserts and Yorkshire Puddings A fast growing food t
Slide 29: History
HISTORY ORIGINS TRANSITION FOCUS DEVELOPMENT Focused convenience food Scale convenience food A broad-based food and Exit of sugar and rebalancing of business in the UK and the US business with significant growth agribusiness centred around the portfolio achieving growth mainly through organic initia
Slide 30: Business Overview
BUSINESS OVERVIEW Food to Go USA A fast growing food to go business in the US, No.1 manufacturer of sandwiches serving both the convenience and small Also manufactures sushi as well as store channel and the grocery channel snack and side of plate salads Seven sites operating in Newburyport (
Slide 31: Category Scale in the UK
CATEGORY SCALE IN THE UK Market Market Position Share Food to Go – Sandwiches (grocery) No.1 44%* – Sandwiches (grocery and convenience) No.1 38%* – Sushi No.2 24% – Salads No.5 7% Chilled Meal Solutions – Chilled Italian Meals No.1 42% – Quiche No.2 37% – Chilled Soups No.3 22% Other Meal Occasions
Slide 32: IAS 19 Revised - Impact
IAS 19 REVISED - IMPACT IAS19 (Revised) applied in FY14 FY13 restated to reflect impact of IAS19 (Revised) Full year impact FY13 restatement Scheme administration costs including UK PPF levy now Operating Costs recognised in the Income Statement - previously charged directly +£2.0m impact to sch
Slide 33: Significant Strategic Activity in FY14: Northampton
SIGNIFICANT STRATEGIC ACTIVITY IN FY14 NORTHAMPTON Investment in Northampton £30m investment to support a significant deepening of business relationship The first phase, the extension to existing facility, is nearing completion First product transferred in September 2014 Phase two will comme
Slide 34: Rhode Island & West Coast Facility
SIGNIFICANT STRATEGIC ACTIVITY IN FY14 RHODE ISLAND & WEST COAST FACILITY Rhode Island investment Development of US West Coast facility Investment of c.£20m in building a Construction of our first West Coast 100,000 square feet greenfield facility in Washington State sandwich manufacturing facil
Slide 35: Jacksonville & Lettieri's
SIGNIFICANT STRATEGIC ACTIVITY IN FY14 JACKSONVILLE & LETTIERI’S Jacksonville investment Acquisition of Lettieri’s £7m investment in frozen food to go A leading manufacturer of frozen capabilities to support a key customer food to go products for convenience Focus on breakfast and lunchtime ho
Slide 36: Greencore: bringing convenience to good food
greencore bringing convenience to good food