Premier Foods Plc · LSE:PFD
Premier Foods — H1 FY2024/25 Earnings Presentation
38 slides from Premier Foods's earnings presentation, Nov 14, 2024
Slide 1: Half year results for 26 weeks ended 28 September 2024
Half year results for 26 weeks ended 28 September 2024 14 November 2024
Slide 2: Alex Whitehouse, CEO
(Cremer FOODS Alex Whitehouse CEO ( enriching life THROUGH FOOD’
Slide 3: Strong volume led branded revenue growth
Strong volume led branded revenue growth Revenue1 Branded revenue UK market share2 Trading profit1 £499m £445m +110bps +29bps £70m Volume Value +4.6% +6.8% +5.5% Adjusted PBT1 Adjusted eps1 Net debt Net debt/EBITDA3 £61m 5.3p £221m 1.1x +8.9% +8.1% £52m lower than prior year 1 – Excludes Charnwood &
Slide 4: Further progress across our strategic pillars
Further progress across our strategic pillars 1 2 3 4 5 Infrastructure Inorganic Grow the UK core Category expansion International investment opportunities £23m +67% +31%1 +5.6% +63% vs prior year H1 UK Branded Investing in efficiency Revenue growth from International FUEL10K now has No.12 revenue g
Slide 5: Continued progress on our ESG commitments
Continued progress on our ESG commitments PRODUCT PLANET PEOPLE 1 66% 3.2m Grocery non-HFSS 45% 2 H1 Scope 1 since FY20/21 Meals Proportion of products 17% emissions donated H2 with regulated health or nutrition claim reductions c.350k H1 S T Solar panel E M STEM vacancies investment filled internal
Slide 6: Duncan Leggett, CFO
\" PREMIER : FOODS Duncan Leggett CFO ( enriching life THROUGH FOOD’
Slide 7: Branded volume and revenues delivered earnings progression
Branded volume and revenues delivered earnings progression £m FY24/25 H1 Change vs PY Comments Branded revenue 445 6.8% Strong branded volume growth Non-branded revenue 54 (10.4%) Driven by consumers switching to brands and contract exits Total revenue 499 4.6% Divisional contribution 105 4.3% Margi
Slide 8: Branded volume growth in both Grocery & Sweet Treats
Branded volume growth in both Grocery & Sweet Treats £m FY24/25 H1 Change vs PY Comments Grocery Branded revenue 339 7.0% Major brands delivered through volume growth plans and promotional activity Non-branded revenue 35 (7.6%) Lower volumes as consumers switch to brands and exits on non-core ranges
Slide 9: Net debt 19% lower than last year, leverage now 1.1x
Net debt 19% lower than last year, leverage now 1.1x Cash flow bridge FY24/25 guidance £m £m Working capital Neutral Depreciation (incl. software amortis’n) c.£25m 300 £52m Amortisation of brands c.£20m 273 37 Capital expenditure £40-45m 250 236 82 Restructuring - cash c.£7m 20 3 221 Interest – cash
Slide 10: Value creation through capital allocation framework
Value creation through capital allocation framework Capex M&A Dividends Pensions • Strong pipeline of opportunities to • The Spice Tailor & FUEL10K were • Expect to pay a progressive • Deficit payments enhance efficiencies through selected very carefully and are dividend suspended attractive payback
Slide 11: Alex Whitehouse, CEO
PREMIER FOODS Alex Whitehouse CEO SPICE TAILO ( enriching life THROUGH FOOD’
Slide 12: Our strategy and purpose
Our strategy and purpose Extending our brand building capabilities beyond our UK core 1 2 3 4 5 Continue Supply chain Expand UK into Build International Inorganic to grow the UK core investment new categories businesses with opportunities critical mass A strong and growing Invest in operational Buil
Slide 13: Our branded growth model is at the core of what we do
Our branded growth model is at the core of what we do 1 Leading brand positions 2 Insight driven new products • Our brands are leaders in their core categories • Launch new products linked to key consumer trends • High household penetration • Major focus on health & nutrition 3 Sustained marketing i
Slide 14: Strong UK branded volume growth and market share gains
1 Strong UK branded volume growth and market share gains Volumes Market share1 H1 UK Branded Volume Volume Value 19% 12% +110bps +29bps vs prior year vs prior year Grocery Grocery Sweet Treats Sweet Treats UK Grocery Sweet Treats ▪ Branded growth model and sharper promotional pricing drive volumes ▪
Slide 15: Product innovation and investment driving branded growth
1 Product innovation and investment driving branded growth Brand investment Product innovation aligned to consumer trends Health & Snacking & Packaging Convenience Indulgence Nutrition On the go sustainability Grocery ▪ New OXO ‘Made with Love’ TV campaign for 2024 ▪ All major brands to Sweet Treats
Slide 16: Product innovation programme aligns to consumer trends
1 Product innovation programme aligns to consumer trends Mr Kipling Signature Nibbles & Bites H1 Revenue Progression £m +134% H1 YoY Revenue ▪ Rich and moist brownies covered in thick chocolate ▪ Range aligns very strongly to indulgence consumer trend ▪ Targets sharing or individual treating occasio
Slide 17: Nissin momentum continues
1 Nissin momentum continues Exceptional Nissin revenue progression New products in H1 Growing scale Half year revenue progression £m +£60m 67%1 Retail sales value Market share +43% 5yr CAGR Revenue vs other brands2 £m ▪ Demae Ramen now in range and added to H1 FY19/20 FY20/21 FY21/22 FY22/23 FY23/24
Slide 18: Great instore execution and further distribution gains
1 Great instore execution and further distribution gains Supported by strong retailer relationships Share of 1 Impactful instore activity Distribution +78bps Grocery categories Oxo Marinades Oxo core Bisto +56bps Batchelors Cake category ▪ Strong brand performance and innovation programme driving di
Slide 19: Substantially increasing infrastructure investment
2 Substantially increasing infrastructure investment Deep pipeline of attractive payback projects to implement over the medium term Capex fuels branded growth Increasing investment levels Digitisation of operations £m Cash Capital 40-45 generation investment 33 Branded Gross 20 growth margin accreti
Slide 20: Extensive pipeline of growth and cost reduction projects
2 Extensive pipeline of growth and cost reduction projects Growth Cost reduction Ambrosia pot filling capacity Cooking Sauces line upgrade Low energy ice topped manufacture Upgraded Bisto packing line • Replaced old process that used • New pot filling and packing line • Replacement of existing asset
Slide 21: New categories momentum continues, sales up +67%
3 New categories momentum continues, sales up +67% Ambrosia Porridge Ice Cream H1 Revenue Instore activation H1 Revenue Range +62% +139% Revenue Revenue growth growth Brand investment • Available in tubs and handheld formats • Leverages iconic flavours of Angel Joint high impact Delight, Mr Kipling
Slide 22: International revenue increased 31%
4 International revenue increased 31% 1 Australia & New Zealand +39% North America +28% EMEA +9% • USA: Driving rate of sale on existing distribution • Canada: Strong growth through distribution gains Expanding cake TV media New product development • USA & Canada: • Strong revenue growth in H1 drive
Slide 23: The Spice Tailor & FUEL10K leveraging the branded growth model
5 The Spice Tailor & FUEL10K leveraging the branded growth model Extending The Spice Tailor into new cuisines Leading the category Brand investment Existing: Indian & Thai New: Chinese & East Asian • Now the UK’s leading1 Granola First out of SKU in Quarter 2 home media activity for • Increasing FUE
Slide 24: Actively seeking further M&A opportunities
5 Actively seeking further M&A opportunities Brand equity ▪ We are focused on ▪ Assets of most acquiring brands with Application of interest are where Product innovation strong potential Branded we believe we can Branded Growth add value by applying assets ▪ The Spice Tailor and Model Marketing inve
Slide 25: Strong plans for the second half
Strong plans for the second half 1 UK branded core 2 Infrastructure investment 3 New categories 4 International Growth & capacity Ambrosia Porridge Australia & New Zealand Launching more Mr Kipling NPD Distribution New listings of Sharwood’s Expanding capacity to realise Launching 5th Ambrosia Porri
Slide 26: Summary & outlook
Summary & outlook 1 ― Double-digit branded volume driven growth in H1 2 ― Outperforming our categories with volume & value market share gains 3 ― Increased capital investment to drive manufacturing efficiencies and so fuel future branded growth 4 ― Strong growth in all international markets 5 ― Acqu
Slide 27: Q&A
— Woremen FOODS Q&A ( enriching life THROUGH FOOD’
Slide 28: Appendix
PREMIER FOODS Appendix G (shin life THROUGH FOOD’ DELICIOUSLY ~ [Kipling | D “ , et ee noeyity APPLE PIES REAL am © DELICIOUSLY GOOD Ur Kiting || ar. ee
Slide 29: Cautionary statement
Cautionary statement This presentation may contain "forward-looking statements" that are based on estimates and assumptions and are subject to risks and uncertainties. Forward-looking statements are all statements other than statements of historical fact or statements in the present tense, and can b
Slide 30: Definitions
Definitions ▪ The period ‘FY24/25 H1’ refers to the 26 weeks ended 28 September 2024, unless where otherwise stated. The period ‘FY23/24 H1’ refers to the 26 weeks ended 30 September 2023, unless otherwise stated. ▪ Trading profit is defined as Profit/(loss) before tax before net finance costs, amor
Slide 31: Why invest in Premier Foods?
Why invest in Premier Foods? 1 Portfolio of category leading brands 2 Proven branded growth model 3 Strong margin profile • Market leaders in • Sector leading the UK in our five • Strong track record margins main categories of delivering comparable with • 90% of UK branded revenue 5.1% large-cap pee
Slide 32: Statutory vs Headline Revenue
Statutory vs Headline Revenue Quarter 2 Half Year £m Statutory Charnwood Headline Statutory Charnwood Headline Grocery Branded revenue 177 - 177 339 - 339 Non-branded revenue 18 (0) 18 37 (2) 35 Total revenue 195 (0) 195 376 (2) 374 Sweet Treats Branded revenue 54 - 54 106 - 106 Non-branded revenue
Slide 33: FY23/24 adjusted for Charnwood closure
FY23/24 adjusted for Charnwood closure Revenue (£m) Q1 Q2 Q3 Q4 FY Statutory reported 235.9 258.2 356.3 287.1 1,137.5 Knighton (4.8) (4.9) (3.6) (1.6) (14.9) Headline ex Knighton 231.1 253.3 352.7 285.5 1,122.6 Charnwood (3.9) (3.8) (3.1) (3.1) (13.9) Headline ex Knighton & Charnwood 227.2 249.5 349
Slide 34: Adjusted earnings per share
Adjusted earnings per share £m FY24/25 H1 FY23/24 H1 % change Trading profit 70 67 5.5% Net regular interest (9) (11) 12.8% Adjusted PBT 61 56 8.9% Tax (25%) (15) (14) (8.9%) Adjusted earnings 46 42 8.9% Weighted average shares in issue (million) 863.3 862.5 0.1% Adjusted earnings per share (pence)
Slide 35: Interest and taxation
Interest and taxation £m FY24/25 H1 FY23/24 H1 Change Senior secured notes interest 6 6 - Interest Bank debt interest 2 4 2 8 10 2 Amortisation of debt issuance costs 1 1 - Net regular interest 9 11 2 ▪ Tax charge £14m, due to operating activities charge at UK corporation tax rate of 25% ▪ Notional
Slide 36: Suspension of pension DC payments presents investment opportunities
Suspension of pension DC payments presents investment opportunities Significant reduction in pension cash outflows1 from FY24/25 Re-cap on progress & timeline 1 Segregated merger of schemes in July 2020 39 38 38 33 2 Strong delivery of investment strategy by pension Trustees 3 Suspension of deficit
Slide 37: Pensions
Pensions 28 September 2024 30 March 2024 ▪ Liabilities decreased by IAS19 Accounting £152m to £2,812m valuation (£m) Premier Premier RHM Combined RHM Combined ▪ Asset values decreased by Foods Foods £74m to £3,491m Assets 2,973 518 3,491 3,032 533 3,565 ▪ Discount rate increased by 30bps to 5.1% ref
Slide 38: Summarised balance sheet
Summarised balance sheet £m 28 September 2024 30 March 2024 Property, plant & equipment 199 190 Intangibles / Goodwill 982 992 Deferred tax asset 21 22 Retirement benefit assets 866 810 Non-current Assets 2,068 2,014 Working Capital - Stock 132 99 - Debtors 119 116 - Creditors (299) (265) Total Work