Cranswick Plc · LSE:CWK
Cranswick — FY2024 Earnings Presentation
34 slides from Cranswick's earnings presentation, May 2024
Slide 1: Results for the 53 weeks ended 30 March 2024
RE SULTS FOR THE 53 WEEKS ENDED 3 0 M A R C H 2 0 2 4
Slide 2: Introduction and FY24 Highlights agenda
F Y 2 4 AG HIE GNHDA LIGHTS IN TROD U C TI ON AN D F Y 2 4 H IG H L IG H TS ADAM COU C H, CEO F I N AN C I AL R EV IEW MAR K BOT TOML EY , CFO COMME RC I AL U P DAT E JI M BR I SBY, CCO OP E RATI N G & STRAT EG IC R EV IEW ADAM COU C H, CEO Q&A DISCLAIMER: Certain statements in this presentation are
Slide 3: FY24 Highlights
FY24 HIGHLIGHTS A DA M C O U C H CHIEF EXECUTIVE OFFICER 2
Slide 4: Our long-term trading record
FY24 HIGHLIGHTS O U R L O N G -T E R M T R A D I N G R E C O R D ADJUSTED PROFIT BEFORE TAX 1 (£M) DIVIDEND PER SHARE (PENCE) £2,599m 90.0 176.6 £2,323m Revenue 34 years of unbroken dividend growth 75.6 136.9 60.4 £1,667m 53.7 102.3 90.2 £1,005m 37.5 64.4 32.0 28.5 £740m 52.2 25.0 43.8 45.6 19.9 33.
Slide 5: Commercial and strategic highlights
FY24 HIGHLIGHTS C O M M E R C I A L A N D S T R AT E G I C H I G H L I G H T S REVENUE ADJUSTED Strong revenue growth, underpinned by positive volume growth OPERATING PROFIT1 across all four UK food categories + 11.9% + 26.3% Strong contribution from expanded farming operations, tight cost Like-for-
Slide 6: Financial Review
FINANCIAL REVIEW M A R K B OT TO M L EY CHIEF FINANCIAL OFFICER 5
Slide 7: Financial highlights
FINANCIAL REVIEW FINANCIAL HIGHLIGHTS REVENUE (£M) +11.9% ADJUSTED PROFIT BEFORE TAX (£M)1 +26.1% 2024 2,599.3 2024 176.6 2023 2,323.0 2023 140.1 2022 2008.5 2022 136.9 ADJUSTED EARNINGS PER SHARE (P)1 +15.6% DIVIDEND PER SHARE (P) +13.4% 2024 242.8 2024 90.0 2023 210.0 2023 79.4 2022 205.4 2022 7
Slide 8: FY24 summary
FINANCIAL REVIEW FY24 SUMMARY £M FY24 FY23 CHANGE FY24 CHANGE 53 weeks 52 weeks 52 weeks Revenue 2,599.3 2,323.0 +11.9% 2,549.6 +9.8% Like-for-like revenue growth1 - - +11.6% - +9.4% Adjusted operating profit2 185.1 146.5 +26.3% 181.5 +23.9% Adjusted operating margin2 7.1% 6.3% +81 bps - - Adjusted
Slide 9: Strong revenue growth
FINANCIAL REVIEW ST R O N G R EV E N U E G R OW T H REVENUE BRIDGE (£M) Revenue growth is driven by: • Strong volume growth in UK Food • Effective recovery of widespread cost inflation (43.2) (1.2) 2,599.3 • Record Christmas trading 48.4 251.9 20.4 • Prepared Poultry and Cooked Bacon business wins P
Slide 10: Positive margin progression
FINANCIAL REVIEW POSITIVE MARGIN PROGRESSION ADJUSTED GROSS MARGIN1 ADJUSTED EBITDA MARGIN1,2 ADJUSTED OPERATING MARGIN1,2 14.4% 10.4% 7.0% 7.0% 7.1% 14.2% 10.3% 14.0% 10.0% 13.3% 9.3% 9.3% 6.3% 6.3% 13.0% FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 Strong contribution
Slide 11: Adjusted EPS bridge
FINANCIAL REVIEW ADJUSTED EPS BRIDGE ADJUSTED EARNINGS PER SHARE (PENCE)1 ADJUSTED EPS GROWTH1 + 15.6% 70.4 (4.2) (34.1) 0.7 242.8 210.0 ADJUSTED EPS 10 YEAR CAGR1 +11.2 % DIVIDEND PER SHARE FY23 adjusted EPS1 Adjusted operating Interest cost Tax Other FY24 adjusted EPS1 +13.4% profit1 DIVIDEND PER
Slide 12: Net debt
FINANCIAL REVIEW NET DEBT NET DEBT (£M) 266.8 1.4 (41.4) (90.6) (43.9) (101.4) (99.4) (47.1) (15.6) (17.8) (9.8) March Adjusted Working capital Taxation Net Dividends Acquisitions2 EBT share Leases Other March 2023 EBITDA1 and biological capex purchases 2024 assets LEVERAGE3 Net debt excluding IFRS
Slide 13: Strong long-term cash generation
FINANCIAL REVIEW S T R O N G L O N G -T E R M C A S H G E N E R AT I O N FREE CASH CASH INFLOW / £M FLOW NET CAPEX ACQUISITION1 DIVIDEND PAID (OUTFLOW)2 B A N K I N G FAC I L I T Y FY24 223.4 90.6 39.2 43.9 49.7 £250m revolving credit facility in place FY23 149.2 83.9 (0.1) 36.3 29.1 with five major
Slide 14: Strategic investment continues
FINANCIAL REVIEW S T R AT E G I C I N V E S T M E N T C O N T I N U E S C O N S O L I DAT E E X PA N D ONGOING PROJECTS ONGOING PROJECTS £62m Fresh Pork Hull site expansion incorporating on site cold £23m Investment in new Worsley houmous facility storage, efficiency and capacity improvements (£8m i
Slide 15: Delivering on value creation
FINANCIAL REVIEW D E L I V E R I N G O N VA L U E C R E AT I O N OU R GU I DI NG PRI NCI PLES Q UA LIT Y VA LU E Delight the customer Vertical integration Lead on premium Utilisation Capital Attractive Technical excellence Efficiency Employed ROCE MAKI N G M E AT S U STAI NAB LE I N N OVATI O N P EO
Slide 16: A sustainable capital allocation framework
FINANCIAL REVIEW A S U S TA I N A B L E C A P I TA L A L L O C AT I O N F R A M E W O R K • £ 9 1 . 4 M D E LI V E R E D W I T H IN VE STIN G IN CAP E X OF C. £ 1 0 0 M P. A . ST RO NG FO RWA R D P I P E LI NE THE BUSIN E S S TO TO ADD CAPACI T Y, SU PPORT OU R CAPAB I L I T Y AN D • I NV E ST M E N
Slide 17: FY25 guidance
FINANCIAL REVIEW F Y 2 5 G U I DA N C E REVENUE ADJUSTED GROWTH1 OPERATING MARGIN 2 c.5% c.7% FINANCE COSTS EFFECTIVE TAX RATE FY24 REPORTED TO UNDERLYING RESULT c.£8m c.26% £M REVENUE ADJUSTED PROFIT BEFORE TAX 2 FY24 reported 2,599.3 176.6 CAPITAL EXPENDITURE 53rd week (49.7) (3.4) c.£100m Insuran
Slide 18: Commercial Update
C O M M E R C I A L U P DAT E J I M B R I S BY CHIEF COMMERCIAL OFFICER 17
Slide 19: Retail growth continues as consumer confidence improves
C O M M E R C I A L U P DAT E RETA IL GROW T H CON TI N UE S AS CON SU M ER CO N FID EN C E IM P ROV E S F R E S H & C H I L L E D S A L E S B Y R E TA I L E R ( £ M ) placement S T R O N G S A L E S I N R E TA I L 14,000 ENVIRONMENT 12,000 52w/e March 23 52w/e March 24 10,000 • Strong Tesco and Sai
Slide 20: Strong commercial progress in year
C O M M E R C I A L U P DAT E STRONG COMMERCIAL PROGRESS IN YEAR R E S I LI E NT D E M A N D CO M M E RC IA L P E R FO R M A N C E M A R K ET S H A R E GA I N S • C ontinued volume growth in • I nflation managed through • New retail business secured key categories strategic cost models across the Gr
Slide 21: Strong category sales
C O M M E R C I A L U P DAT E S T R O N G C AT E G O R Y S A L E S U K FOOD SALES FY24 C R A N SW I C K R EV E N U E BY C H A N N E L F Y 2 4 Change Category Value Volume 77% Fresh Pork1 +18.8% +7.6% UK Retail +15% Convenience2 +13.3% +4.3% Gourmet Products3 +20.7% +10.5% Manufacturing +15% 14% Poul
Slide 22: Commercial growth agenda and outlook
C O M M E R C I A L U P DAT E C O M M E R C I A L G R O W T H AG E N DA A N D O U T L O O K C O N S O L I D AT E E X PA N D DIVERSIFY • C ontinue to develop • Further business wins in added • Further investment at Lincoln partnerships through vertical value poultry confirmed site to drive efficienci
Slide 23: Further commercial growth through differentiated business model
C OF M Y 2M4E H RCI GI A HLL IUGPHDAT TS E F U RT H E R C O M M E R C I A L G R OW T H T H R O U G H D I F F E R E N T I AT E D B U S I N E S S M O D E L OU R GU I DI NG PRI NCI PLES S U P P LY C H A I N LEAN PROCESSING Q UA LIT Y VA LU E Delight the customer Vertical integration Lead on premium Uti
Slide 24: Product portfolio
C O M M E R C I A L U P DAT E PRODUCT PORTFOLIO FRESH PORK G O U R M ET SAU SAG E G O U R M ET BACO N S LOW CO O K CO O K E D M E AT R E A DY TO E AT FRESH CHICKEN COAT E D C H I C K E N G O U R M ET PA ST RY A M B I E N T FO O D S CHICKEN S P EC I A LIT Y O LI V E S & A NTI PA STI CHARCUTERIE HOUMO
Slide 25: Market share opportunities
C O M M E R C I A L U P DAT E MARKET SHARE OPPORTUNITIES Cranswick share of retail category sales MEDITERRANEAN PIG MEAT POULTRY FOODS Cranswick Other Retail Sales Value Cooked Pastry Premium Bacon Premium Fresh Sausage Slow Fresh RTE Coated Charcuterie Houmous Olives & meats pastry bacon pork cook
Slide 26: Operating & Strategic Review
O P E R AT I N G & S T R AT E G I C R E V I E W A DA M C O U C H CHIEF EXECUTIVE OFFICER 25
Slide 27: Strategy and growth agenda
O P E R AT I N G & S T R AT E G I C R E V I E W S T R AT E GY A N D G R O W T H AG E N DA C O N S O L I D AT E E X PA N D DIVERSIFY I NCR E AS E M A R KE T SH A R E ID E N T IF Y N EW DRIVE THE CORE I N GROW T H CAT EG O R IE S O P P O RT UN IT IE S • Robust volume growth across • S trong pipeline f
Slide 28: Adding value through supply chain investment
O P E R AT I N G & S T R AT E G I C R E V I E W A D D I N G VA L U E T H R O U G H S U P P LY C H A I N I N V E S T M E N T Substantial feed milling, pig and poultry businesses strengthen customer relationships and improves security of supply Increasing self-sufficiency reduces market volatility and
Slide 29: Summary & outlook
O P E R AT I N G & S T R AT E G I C R E V I E W S U M M A RY & O U T LO O K STRO N G P E R FO R M A N C E O N G O I N G I N V E STM E NT P O S ITIV E O UTLOO K • S trong revenue growth • £62m investment in Hull Fresh • G rowth strategy on track Pork site • Robust margins • Positive forward momentum
Slide 30: Appendix 1
APPENDICES APPENDIX 1 Simply Sausage - Gourmet Sausage Sold Cranswick Pet Products Froch Foods 53 weeks ended 30 March 2024 29
Slide 31: Appendix 2: Our locations
APPENDICES APPENDIX 2 Our locations We have sites across the UK and our primary processing facilities are well placed within key farming areas. • Over 14,500 employees Ballymena • Operating from 23 production facilities, 3 feed mills and extensive pig and poultry farming operations • Over £600m capi
Slide 32: Appendix 3: Adjusted & reported earnings, tax & EPS
APPENDICES APPENDIX 3 Adjusted & reported earnings, tax & earnings per share ADJUSTED & REPORTED EARNINGS (£M) FY24 FY23 TAX (%) FY24 FY23 Adjusted operating profit 185.1 146.5 Headline tax rate 25.0 19.0 Net IAS 41 movement 2.2 7.6 Disallowed expenses 1.2 0.6 Impairment of acquired intangible asset
Slide 33: Appendix 4: Balance sheet and cash flow
APPENDICES APPENDIX 4 Balance sheet and cash flow BALANCE SHEET (£M) FY24 FY23 STATUTORY CASH FLOW (£M) FY24 FY23 Investments 0.9 - Cash generated from operations 269.8 173.4 PPE 518.9 464.1 Tax paid (41.4) (20.4) Intangible assets 213.5 223.2 Net cash from operating activities 228.4 153.0 ROU asset
Slide 34: Appendix 5: Free cash flow
APPENDICES APPENDIX 5 Free cash flow FREE CASH FLOW (£M) FY24 FY23 Net cash from operating activities 228.4 153.0 Net interest paid (5.0) (3.8) Free cash flow 223.4 149.2 FREE CASH CONVERSION (£M) FY24 FY23 Free cash flow 223.4 149.2 Non-growth capital expenditure (22.1) (36.4) Net IAS 41 valuation