Slide 1: Interim Results
Interim Results For the half year ended 28 March 2014 1
Slide 2: Agenda
AGENDA Highlights Patrick Coveney, CEO Financial Review Alan Williams, CFO Operating & Strategic Review Patrick Coveney, CEO Outlook Patrick Coveney, CEO Q&A Open to the Floor 2
Slide 3: Highlights
HIGHLIGHTS 1. Strong first half performance: 18.6% increase in adjusted EPS 2. Food to go led strategy working well in UK and US 3. Step-up in strategic investments to support confirmed new business 4. Announcement of Northampton investment and disposal of foodservice desserts business, Ministry of
Slide 4: Financial Review
FINANCIAL REVIEW Alan Williams Chief Financial Officer
Slide 5: Financial Summary
FINANCIAL SUMMARY H1 14 Versus H1 13 Reported revenue £619.8m +8.2% Operating profit1 £37.2m +14.0% Operating margin1 6.0% +30bps Adjusted PBT2 £30.7m +20.5% Adjusted earnings per share2 7.0p +18.6% 1 Operating profit and margin are stated before exceptional items and acquisition related amortisatio
Slide 6: Convenience Foods
CONVENIENCE FOODS • Like for like revenue* growth of 9.6% H1 14 H1 13 % • Food to go products benefiting £m £m change from convenience channel development and improving Reported 587.9 542.1 +8.4% economic conditions revenue • Rollout of major customer Operating 35.9 31.3 +14.9% contract in the US pr
Slide 7: Ingredients & Property
INGREDIENTS & PROPERTY % • Increase in revenue driven H1 14 H1 13 % change by edible oils trading volume £m £m change constant currency • Molasses revenue lower due to milder weather Revenue 31.9 30.8 +3.7% +2.8% • Negotiations progressing on Operating 1.3 1.4 -6.6% -7.7% the disposal of Littlehampt
Slide 8: Financing, Tax and Pensions
FINANCING, TAX AND PENSIONS Financing • Bank interest payable fell to £7.0m (H1 13: £7.7m) - lower net debt and lower effective interest rate • H2 14 expected to be modestly higher given investments Tax • Effective tax rate remains very low at 1% (H1 13: Restated credit of 1%) - reflects continuing
Slide 9: Exceptional Items
EXCEPTIONAL ITEMS Income Statement Of which: H1 14 Exceptional Items Charge cash items £m £m Planned exit from Newburyport and (9.8) (1.2) Brockton US facilities Impairment of investment in Ministry of (5.8) - Cake Transaction and integration costs of US (1.3) (1.3) acquisition Pre tax impact (16.9)
Slide 10: EPS and Dividend
EPS AND DIVIDEND EPS & Dividend H1 14 H1 13 • Adjusted earnings 22.3% ahead Adjusted earnings2 £28.1m £23.0m • Adjusted earnings per share up 18.6% Denominator for earnings 399.6m 391.5m • 15.8% increase in interim dividend per share Adjusted earnings per 7.0p 5.9p share2 Interim dividend per share
Slide 11: Cashflow and Net Debt
CASHFLOW AND NET DEBT Cashflow £m H1 14 H1 13 EBITDA 50.6 44.9 Working capital movement (14.1) (17.3) Net capex (17.2) (18.4) Interest & tax (8.4) (7.6) Operating cashflow 10.9 1.6 Pension financing (5.1) (5.3) Exceptionals (5.6) (10.6) Dividends paid (4.5) (5.0) Other including FX 2.3 (3.7) Cash ou
Slide 12: Borrowings Profile
BORROWINGS PROFILE • Total committed facilities of £487m – weighted average debt maturity of 3.2 years as at 28 March 2014 • Arranged €70m (£58m) non-bank committed loan facility with 6 year maturity • Refinanced $65m (£39m) of US private placement notes with new 8 year facility £m 280 60 58 50 39 O
Slide 13: Summary Financial Performance
SUMMARY FINANCIAL PERFORMANCE • Group revenue up 8.2% • Like for like Convenience Foods revenue growth of 9.6% • Group operating profit up 14% • Strong adjusted EPS growth of 18.6% 13
Slide 14: Operating & Strategic Review
OPERATING & STRATEGIC REVIEW PATRICK COVENEY CHIEF EXECUTIVE OFFICER
Slide 15: FY14 Performance Priorities
FY14 PERFORMANCE PRIORITIES 1 EMBED food to go strategy across the Group DRIVE growth and performance in UK 2 Convenience business 3 SCALE UP US Convenience business 15
Slide 16: A Focused, Growing Food to Go Leader
1 A FOCUSED, GROWING FOOD TO GO LEADER... c. % of UK UK UK US Ingredients & Food to Go Prepared Meals Grocery Food to Go Property run rate revenue* 40% 20% 20% 15% 5% * Divisional shares rounded to the nearest 5% 16
Slide 17: Building on Positive Long Term Food to Go Trends
…BUILDING ON POSITIVE LONG TERM 1 FOOD TO GO TRENDS… Growth in convenience stores operated Channel extension opportunities in food by UK multiples* to go market (£bn)** 100% = £6.5bn 7300 Greencore today 5600 1.1 1.2 Grocery multiples 3600 0.8 Convenience stores 2.7 0.7 Coffee shop chains Foodservic
Slide 18: Aligned with Greencore's Position, Capability and Economic Model
…AND ALIGNED WITH GREENCORE’S POSITION, 1 CAPABILITY AND ECONOMIC MODEL • 37% share in sandwiches - #1 in market • Broad manufacturing footprint Our Position • Emerging positions in salads, sushi, soup and baked goods • Industry-leading scale • Leading edge food safety Our Capability • Customer insi
Slide 19: UK Convenience Performance – Strong Growth in Challenged Environment
UK CONVENIENCE PERFORMANCE – STRONG 2 GROWTH IN CHALLENGED ENVIRONMENT Convenience Foods growth % 26 weeks to end March 14 Driven by… • Unit volume growth (⅔) and mix (⅓) Chilled 2.1 Convenience* • Strong growth in convenience formats • Portfolio weighted to food to Greencore UK LFL 7.9 go • Increas
Slide 20: UK Convenience Performance – Divisional Highlights
UK CONVENIENCE PERFORMANCE 2 – DIVISIONAL HIGHLIGHTS Food to Go • Strong revenue growth of 17.2% versus market growth of 9.4% • Successful re-launch activity and net 37% Market share sandwiches listing gains Prepared Meals • Revenue growth of 0.3% • Improving trajectory through H1 in 38% Market shar
Slide 21: Greencore USA H1 Delivery
3 GREENCORE USA H1 DELIVERY • Business focused on food to go categories to small store customers • Like for like revenue up 25.7% H1 Performance • Growth driven predominantly by rollout of new major contract • Market volumes impacted by bitter winter across several regions • Increased focus on hot e
Slide 22: Acquisition of Lettieri's
3.1 ACQUISITION OF LETTIERI’S Minneapolis, MN Newburyport & Brockton, MA • A leading manufacturer of frozen food to Salt Lake City, UT go products for convenience store channel Chicago, IL • A modern purpose built facility in Fredericksburg, VA Minneapolis with high quality assets Jacksonville, FL •
Slide 23: Jacksonville Investment
3.2 JACKSONVILLE INVESTMENT • $10m investment in frozen food to go Minneapolis, MN capabilities Newburyport & Brockton, MA • Capacity to support $100m of revenue Salt Lake City, UT with focus on hot eating products at Chicago, IL breakfast and lunchtime Fredericksburg, VA • First products coming to
Slide 24: Rhode Island Investment
3.3 RHODE ISLAND INVESTMENT • c.$35m investment in a 100,000 square New England & foot sandwich facility, opening in Spring New York state ME 2015 • Phased exit from Newburyport and VT Brockton facilities during FY15 NH Newburyport & • Designed to deliver $8m productivity Brockton, MA NY MA savings
Slide 25: Delivering Our Strategy – Today's Announcement
DELIVERING OUR STRATEGY – TODAY’S ANNOUNCEMENT • Investment in Northampton food to go facility • £30m investment from FY14 – FY16 to facilitate a significant new business award • Underpins specific future growth opportunities with the Northampton facility customer • First phase of new products confi
Slide 26: Outlook for FY14
OUTLOOK FOR FY14 • Strong first half • Economic conditions steadily improving but UK grocery market facing continued pressure and uncertainty • Notwithstanding the strong comparator period, we expect to deliver good revenue growth in H2 14 • We remain confident in our ability to deliver adjusted EPS
Slide 27: Greencore – Bringing convenience to good food
greencore A greencore bringing convenience to good food
Slide 28: Appendix
greencore Appendix
Slide 29: IAS 19 Revised - Impact
IAS 19 REVISED - IMPACT • IAS19 (Revised) applied in H1 14 • H1 13 restated to reflect impact of IAS19 (Revised) Estimated H1 Impact Full year impact H1 14 H1 13 FY13 (restated) restatement Operating Scheme administration costs including UK PPF Costs levy now recognised in the Income Statement - +£0
Slide 30: 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 31: History
HISTORY ORIGINS TRANSITION FOCUS a broad-based food and the exit of sugar and the convenience food in the UK and agribusiness centred around the rebalancing of the portfolio the US Irish sugar business • Greencore established in 1991 • Exit of sugar announced in 2006 • Strong UK growth through follo
Slide 32: Business Overview
BUSINESS OVERVIEW Food to Go USA •A fast growing food to go business in •No.1 manufacturer of sandwiches the US, serving both the convenience •Also manufactures sushi as well as and small store channel and the snack and side of plate salads grocery channel •UK sites in Worksop, London (2), •Seven si
Slide 33: Category Scale in the UK
CATEGORY SCALE IN THE UK Market Market Position Share Food to Go •Sandwiches No.1 37% •Sushi No.3 21% •Salads No.4 12% Chilled Meal Solutions •Chilled Italian Meals No.1 38% •Quiche No.2 36% •Chilled Italian Pasta Sauce No.2 37% Other Meal Occasions •Own Label Cooking Sauces No.1 82% •Own Label Pick
Slide 34: Greencore – Bringing convenience to good food
greencore A greencore bringing convenience to good food