Slide 1: Preliminary Results for the year ended 24 September 2010
Preliminary Results for the year ended 24 September 2010
Slide 2: 2010 Results Highlights
2010 Results Highlights Highlights Patrick Coveney, CEO Financial Review Geoff Doherty, CFO Operating Review Patrick Coveney, CEO Outlook Patrick Coveney, CEO Q&A Open to the floor 1
Slide 3: Highlights
Highlights FINANCIAL BUSINESS • Strong Group performance* • Convenience Foods portfolio • Operating profit growth +17.6% • Malt, Water and Continental disposals • Sales growth +6.9% completed • Convenience Foods now 90% of Group • Retained profit of €34.5m activity • Excellent performance in • 32% r
Slide 4: Financial Review
Financial Review Geoff Doherty Chief Financial Officer 3
Slide 5: 2010 Results Highlights
2010 Results Highlights Versus FY09 Revenue €856.0m +6.9% Operating profit* €59.7m +17.6% Operating margin* 7.0% +63bps Effective tax rate 17% +1% Net debt €193.4m -32% Adjusted EPS** 16.7c -4.0% * before exceptional items and acquisition related amortisation ** before exceptional items, acquisition
Slide 6: Convenience Foods
Convenience Foods Continuing • Strong sales growth - volume €m FY10 FY09 %Change rather than price led Revenue 784.5 708.6 +10.7% • Strong consumer trends towards ‘on the go’ and ‘at home’ food Operating consumption 54.1 44.7 +21% profit* • 63 bps improvement in operating Margin 6.9% 6.3% margin dri
Slide 7: Malt
Malt Discontinued • Malt business disposed for total consideration of up to €113m €m FY10 FY09 • FY10 reflects six months to date of disposal. FY09 is full year Revenue 90.6 217.1 Operating 8.6 20.5 • Spot malt margins in decline, profit* indicative of malt earnings returning to lower point of cycle
Slide 8: Ingredients & Property
Ingredients & Property Continuing • Represents a modest part of the €m FY10 FY09 % Group, post Malt Change Revenue 71.5 92.2 -23% • Comprises edible oils, molasses and surplus property trading Operating 5.6 6.1 profit* • Solid performance overall in a difficult domestic Irish market * before excepti
Slide 9: Decreasing Finance Costs
Decreasing Finance Costs €m FY10 FY09 Bank interest payable (25.3) (28.3) Unwind discount to present value (0.2) (0.4) Finance cost* (25.5) (28.7) Pension (charge)/credit (0.2) 1.2 FX/fair value of derivatives (1.8) (20.4) Net finance (27.5) (47.9) * before fair value and pensions 8
Slide 10: FY11: Significant Decrease Forecast in Interest Payable
FY11: Significant Decrease Forecast in Interest Payable FY11 Forecast €m Bank interest payable 15.5 • Restructuring of net debt post Commitment fees 2.0 disposals Facility fee amortisation 1.5 • Settlement of a portion of the Total cash interest Group’s fixed interest swaps for 19.0 €9.6m Interest P
Slide 11: Net Exceptional Gain from Malt, Water & Continental Disposals
Net Exceptional Gain from Malt, Water & Continental Disposals FY10 exceptionals Profit/(Loss)* Cash on completion Earnout/other Total Consideration €m Malt disposal 16.6 106.3 7.0 113.3 Water disposal (2.6) 14.1 3.0 17.1 Continental foods disposal (4.5) 9.0 3.0 12.0 Net increase in equity/cash 9.5 1
Slide 12: EPS & Dividend
EPS & Dividend €cent FY10 FY09 • Adjusted EPS down 4% Adjusted EPS 16.7 17.4 • Dilutive impact of Malt in year Dividend per share substantially offset by growth in Interim paid 3.0 3.0 Convenience earnings Final proposed 4.5 4.5 • Continuing adjusted EPS in FY10 7.5 7.5 is 13.3 cent 11
Slide 13: Cashflow
Cashflow €m Continuing Discontinued Total EBITDA 80.6 12.5 93.1 Working capital movement 24.6 (46.8) (22.2) Net capex (21.3) (2.8) (24.1) Free cashflow 83.9 (37.1) 46.8 Pension deficit funding (10.3) - (10.3) Interest payments (27.9) - (27.9) Taxation payments (1.3) (0.9) (2.2) Operating cashflow 44
Slide 14: Summary - Financial Performance
Summary - Financial Performance • Strong performance in Convenience Foods • Solid Ingredients & Property performance • Increase in operating margin • 32% reduction in net debt • Significant reduction in bank interest costs • Total result for financial year of €34.5m 13
Slide 15: Operating Review & Outlook
Operating Review & Outlook Patrick Coveney Chief Executive Officer 14
Slide 16: Operating Review
Operating Review 1 Portfolio focused on Convenience Foods Excellent performance across 2 Convenience Foods business - Category growth - Industry capacity tightening - Greencore performance 3 Progress in Greencore USA 15
Slide 17: Our Portfolio
1 Our Portfolio Irish Sugar 1934 1991 2000 2006 2008 2009 2010 Decision to Exit Sale of Sale of Sale of Sale of Sugar Processing Drummonds Water Malt Cont. A FOCUSED Regional Irish Broad based food Sugar Ingredients and and agribusiness CONVENIENCE agribusiness Company company player FOODS BUSINESS
Slide 18: Convenience Foods Portfolio - Disposals
1 Convenience Foods Portfolio - Disposals Malt • A standalone business in need of capital investment • Cyclical earnings ranging from nil to c.€25m, with highly seasonal working capital demands • Earnings on downward trajectory Impact • Consideration of €113.3m 1. Focused growth portfolio now Water
Slide 19: Excellent Performance Across Convenience Foods Business
Excellent Performance 2 Across Convenience Foods Business • Consumers driving both volume and value growth Continuing business • Industry capacity tightening • Sales growth +10.7% • Operating profit growth +21.1% • Greencore gaining market shares and enhancing • Operating margin 6.9% margins • Manag
Slide 20: Consumers Driving Growth
2a Consumers Driving Growth Accelerating market growth* 8.1% Driven by 7.8% • Consumers still demand convenience • Increased ‘at-home’ and ‘on-the go’ 7.5% food consumption • Out-performance by top 5 retailers and ‘out of town’ formats • Promotional intensity and ‘value innovation’ sustaining volume
Slide 21: Industry Capacity Tightening
2b Industry Capacity Tightening Ready meals market • Large players reshaping landscape • At least six facilities closed • More than 15% of industry Impact capacity removed* 1. Tight credit environment has curtailed capacity additions 2. Recent market growth has absorbed much of the available Food to
Slide 22: Greencore Performance - Sales
2c Greencore Performance - Sales Sandwiches +8.6% • Strong category performance in all core customers +4.8% • Drove up our share of Sainbury’s business by c.10% through category expansion and new delivery formats • New business wins including Dunnes Stores (Ireland) and Superdrug • Successful migrat
Slide 23: Greencore Delivery - Margin
2d Greencore Delivery - Margin • Overhead costs rebased in all areas Benefit of FY09 • 5% indirect labour saving efficiency initiatives • Pay freeze across our factories, with senior management team taking 5% pay cut • Market growth and Greencore share gains have had positive impact Operational leve
Slide 24: Progress in USA
3 Progress in USA • Sales momentum with underlying sales 18% ahead of the previous year and 53% ahead of FY08 • Food to Go represents a key growth driver, with fresh manufactured sandwiches replacing ‘made in store’ lines at two core customers • Broadening of relationships with our core customers bu
Slide 25: Outlook
Outlook • Very strong trading in Convenience Foods in FY10 • Good start to FY11 • Manageable input price inflation • Significant reduction in Group interest expense 24
Slide 26: Summary
Summary • Focused Convenience Foods portfolio put in place with disposal activity now complete • Food consumption trends should underpin growth in the years ahead • Strong team and category competences • On track to deliver strong growth on a continuing basis in FY11 25
Slide 27: 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 Imelda Hurley, Managing Director - Finance & Head of Investor Relations T: + 353 (0)1 6051018 E: