Slide 1: Results for the 52 weeks ended 26 March 2022
R E S U LT S FOR THE 52 WEEKS ENDED 26 MARCH 2022
Slide 2: Agenda
AG E N DA I NT ROD U C T I ON AND FY 2 2 H I G H L I G H TS Ad a m Co uc h , C EO FI NANC I AL REV I EW Ma r k Botto mley, C FO COMMERC I AL U P DAT E Jim Br is by , CCO OP ERAT I NG & ST RAT EG I C R EV I EW Ad a m Co uc h, C EO Q& A DISCLAIMER: Certain statements in this presentation are forward l
Slide 3: Our long-term trading record 1990–2022
O U R L O N G -T E R M T R A D I N G R E C O R D 1990 – 2022 £2008.5m 136.9 75.6 ADJUSTED PROFIT BEFORE TAX 1 (£M) 129.7 DIVIDEND PER SHARE (pence) 70.0 60.4 £1,667m 102.3 90.2 92.0 32 YEARS OF UNBROKEN DIVIDEND GROWTH 55.9 53.7 75.5 44.1 64.4 37.5 £1,005m 57.8 34.0 32.0 52.2 30.0 49.1 28.5 47.3 27.
Slide 4: FY22 Highlights
FY22 HIGHLIGHTS A DA M C O U C H CHIEF EXECUTIVE OFFICER
Slide 5: FY22 Highlights
FY22 HIGHLIGHTS 5 YEAR CAGR Revenue above £2bn, with adjusted operating margin maintained at 7.0% Compound annual growth rates to 26 March 2022 Unprecedented industry wide labour and supply chain challenges being well managed REVENUE with excellent customer service levels maintained +10.0% Ongoing c
Slide 6: Over the last five years we have delivered
OV E R T H E L A S T F I V E Y E A R S W E H AV E D E L I V E R E D OPERATIONAL PERFORMANCE GROWTH THROUGH ENHANCED OUR INCREASED OUR PIG INCREASED POULTRY ACQUISITION FIXED ASSETS BASE PROCESSING OPERATIONS FARMING OPERATIONS £120m invested in Over £400m of From 46k to 62k From 0.5m to 1.4m six new
Slide 7: Supporting the refugee crisis whilst managing the business impacts
SUPPORTING THE REFUGEE CRISIS W H I L S T M A N AG I N G T H E B U S I N E S S I M PAC T S H U M A N I TA R I A N S U P P O R T I N F L AT I O N A N D C O M M O D I T I E S Providing additional support to our permanent Ukrainian Working with customers and suppliers to manage colleagues with family s
Slide 8: Financial Review
FINANCIAL REVIEW M A R K B OT TO M L EY CHIEF FINANCIAL OFFICER
Slide 9: Financial Highlights
FINANCIAL HIGHLIGHTS REVENUE (£M) +5.8% ADJUSTED PROFIT BEFORE TAX (£M)1 +5.6% 2022 2,008.5 2022 136.9 2021 1,898.4 2021 129.7 2020 1,667.2 2020 102.3 ADJUSTED EARNINGS PER SHARE (P)1 +3.1% DIVIDEND PER SHARE (P) +8.0% 2022 205.4 2022 75.6 2021 199.3 2021 70.0 2020 156.4 2020 60.4 FREE CASH FLOW (£M
Slide 10: FY22 Summary
FY22 SUMMARY £M FY22 FY21 CHANGE Revenue 2,008.5 1,898.4 +5.8% Like-for-like revenue growth1 - - +5.3% Adjusted gross margin2 14.0% 14.2% -19bps Adjusted operating profit2,3 140.6 132.5 +6.1% Adjusted operating margin2,3 7.0% 7.0% +2bps Adjusted profit before tax2,3 136.9 129.7 +5.6% Effective tax r
Slide 11: Strong underlying revenue growth
ST R O N G R EV E N U E G R OW T H U N D E R LY I N G R E V E N U E REVENUE BRIDGE (£M) G R O W T H I S D R I V E N B Y: +2.5% -1.8% – Strong retail demand 48.8 (35.1) +0.5% +2.1% – Recovery of the food service sector 9.3 +2.5% 39.5 – Wholesale demand also driven by the recovery of food service 47.6
Slide 12: Operating margin maintained despite inflationary pressures
O P E R AT I N G M A R G I N M A I N TA I N E D D E S P I T E I N F L AT I O N A R Y P R E S S U R E S +91bps -19bps FY20 FY21 FY22 +105bps -32bps +68bps +2bps 13.3% 14.2% 14.0% 9.3% 10.4% 10.0% 6.3% 7.0% 7.0% ADJUSTED GROSS MARGIN1,2 ADJUSTED EBITDA MARGIN1,2 ADJUSTED OPERATING MARGIN1,2,3 Adjusted
Slide 13: Strong operating cash performance
S T R O N G O P E R AT I N G C A S H P E R F O R M A N C E D E S P I T E I N F L AT I O N A N D B R E X I T L I N K E D W O R K I N G C A P I TA L E X PA N S I O N 5.0 (15.0) (3.5) (12.3) 0.8 12.3 (8.7) 181.4 160.0 £M March 2021 Adjusted Inventories Biological Receivables Payables Taxation Other Mar
Slide 14: Modest increase in net debt
MODEST INCREASE IN NET DEBT D R I V E N P R I M A R I LY B Y AC Q U I S I T I O N S (36.6) (9.8) (92.4) 201.7 £M (92.4) (32.8) (106.0) (38.5) 1.8 (7.0) March 2021 Adjusted Working Taxation Net Dividends Acquisitions Leases Other March 2022 EBITDA Capital Capex Opening and closing net debt includes I
Slide 15: Capex programme continues
CAPEX PROGRAMME CONTINUES £M FY22 FY21 FRESH PORK – significant investment in automation and sustainability initiatives with £5.6m spent on a new automated Deboflex leg boning line and £4.5m on Fresh Pork 26.4 20.5 acquiring the Ballymena site Convenience 14.3 13.9 CONVENIENCE – projects included th
Slide 16: New £250m sustainability linked bank facility
N E W £ 2 5 0 M S U S TA I N A B I L I T Y L I N K E D B A N K I N G FAC I L I T Y B A N K I N G FAC I L I T Y R E VO LV I N G C R E D I T FAC I L I T Y ( £ M ) Sustainability linked financing 50 £250m revolving credit facility with five major banks 40 Includes committed overdraft of £20m Accordion
Slide 17: A sustainable capital allocation framework
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 I N V E ST I N G I N T H E B U S I N E S S TO C A P E X O F C . £ 1 0 0 M T O A D D C A PAC I T Y, S U P P O R T O U R G R O W T H S T R AT E GY C A PA B I L I T Y A N D A U T O M AT I O N M A I N TA I N I N V E S T M E N T TA
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
Slide 19: Retail sales continue to perform ahead of pre-pandemic levels
R E TA I L S A L E S C O N T I N U E T O P E R F O R M A H E A D O F P R E - PA N D E M I C L E V E L S F R E S H & C H I L L E D C AT E G O R Y S A L E S B Y R E TA I L E R 14,000 All retailers remain ahead of pre-pandemic 12,000 sales in fresh & chilled categories 52w/e 22 Mar 20 52w/e 21 Mar 21 5
Slide 20: Out of home market recovery
O U T O F H O M E M A R K E T R E C OV E R I N G FOODSERVICE CHANNEL PERFORMANCE Consumers have returned to eating out of home more often in the latest year, as COVID-19 restrictions eased vs 2020 vs 2019 TOTAL FOODSERVICE SALES +49.0% -23.0% Fast food the only area to outperform pre-covid 2019 mark
Slide 21: Sales of chilled meat remain above 2019 levels
S A L E S O F C H I L L E D M E AT R E M A I N A B OV E 2 0 2 0 L E V E L S P R O T E I N VO L U M E I N R E TA I L S I N C E 2 0 1 9 C AT E G O R Y P E R F O R M A N C E 900 815 800 742 762 726 700 654 667 600 Volume (’000 tonnes) 500 400 360 310 309 300 200 Retail volumes of fresh protein are ahea
Slide 22: Cost price inflation evident
C O S T P R I C E I N F L AT I O N E V I D E N T F E E D W H E AT P R I C E S 2 0 0 0 - 2 0 2 2 ( E X - FA R M , S P O T ) Record wheat prices affecting animal feed costs 350 May 329.5 300 Strong increase in SPP supported by Cranswick 250 and balancing cost of production 200 Additional inflation com
Slide 23: Strong category sales
S T R O N G C AT E G O R Y S A L E S R E TA I L A N D E X P O R T D R I V I N G C H A N N E L G R O W T H C R A N SW I C K SA L E S F Y 2 2 Sales of fresh pork reduced; increased volumes used for internal added value lines and China suspension from CHANGE Watton restricting volumes CATEGORY VALUE VO
Slide 24: Commercial priorities
COMMERCIAL PRIORITIES ENHANCED E X PA N D I N G P O U LT R Y C O O K E D B AC O N SOUS VIDE MEDITERRANEAN C A PA B I L I T Y A N D S A U S AG E G R OW T H FOOD OFFER Increase capacity at new Ramona’s – roll out houmous Growth plans with Fast growing category Breaded facility and dips into key grocer
Slide 25: Accelerating our sustainability focus
AC C E L E R AT I N G O U R S U S TA I N A B I L I T Y F O C U S CARBON NEUTRAL SITES S C I E N C E B A S E D TA R G E T S VA L I DAT E D N E T Z E R O TA R G E T F O R 2 0 4 0 D E F O R E S TAT I O N F R E E S OYA R E G E N E R AT I V E AG R I C U LT U R E C A R B O N N E U T R A L FA R M S B Y 2 0
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
Slide 27: Our strategy and growth agenda
O U R S T R AT E GY A N D G R O W T H AG E N DA OUR PURPOSE Feeding the nation with authentically made, sust ainably produced food ; created with passion C O N S O L I DAT I O N D I V E R S I F I C AT I O N I N T E R N AT I O N A L DEVELOPING NEW D RI V E TH E CO RE E XPA N D I N G O U R O F F E R O
Slide 28: Consolidation: investment in vertical integration
C O N S O L I DAT I O N I N V E S T M E N T I N V E R T I C A L I N T E G R AT I O N Continued investment in expanding and enhancing our agricultural supply chain £12 million spent to strengthen vertical integration, increase capacity and improve our industry leading animal welfare standards Further
Slide 29: Consolidation: cooked bacon facility
C O N S O L I DAT I O N C O O K E D B AC O N FAC I L I T Y Commissioning of the Gourmet Kitchen facility completed in April 2021 Sales of Cooked Bacon to anchor Quick Service restaurant other UK Retail and Food Service customers commenced in the year Performing to plan Further opportunities for grow
Slide 30: Diversification: premium breaded poultry
D I V E R S I F I C AT I O N P R E M I U M B R E A D E D P O U LT R Y Premium breaded poultry facility sales commenced in April 2022 Strong demand from retail and food service customers Additional capacity and capability added into the design Facility uses a range of innovative production processes,
Slide 31: Diversification: Ramona's and Atlantica
D I V E R S I F I C AT I O N R A M O N A A N D AT L A N T I C A Growth in Convenience accelerated by two complementary bolt-on acquisitions, Ramona’s Kitchen and Atlantica UK Both acquisitions further strengthen our non-meat offering Ramona’s Kitchen offers a range of plant-based Mediterranean foods
Slide 32: Diversification: Grove Pet Foods
D I V E R S I F I C AT I O N G R OV E P E T F O O D S Acquisition of Grove Pet Foods completed on 28 January 2022 Opportunity to add value to fifth quarter and offal from pig and poultry processing Produce wide range of dried pet foods and treats under the Vitalin and Alpha brands Contract manufactu
Slide 33: International
I N T E R N AT I O N A L C OV I D 1 9 A N D A F R I C A N S W I N E F E V E R FA R E A S T Pig prices in China remain close to record lows Demand remains subdued as a result of lockdown pandemic dining restrictions and weaker economic growth China continues to limit imports in an effort to balance s
Slide 34: Summary and outlook
S U M M A RY A N D O U T LO O K STRONG PERFORMANCE ONGOING INVESTMENT P O S I T I V E O U T LO O K Strong revenue growth Expansion of Eye Poultry facility Inflation being well managed Positive earnings momentum Investment in Breaded Poultry facility Growth strategy on track Robust financial position
Slide 35: Appendix: Our growth history
APPENDIX 1 O U R G R OW T H H I STO RY 1975 1988 1991 1992 1992 1 9 95 1999 2 0 01 2 0 04 2 0 05 Established Move into food Preston George Bucktons FT Sutton’s Deli Simply Sausages Pethick & Co – Continental Jack Scaife’s Perkins Agri-Food business production abattoir Pet Food Cooked Meats – Gourmet
Slide 36: Appendix: Our locations
APPENDIX 2 O U R L O C AT I O N S WE HAVE SITES ACROSS THE UK AND OUR PRIMARY PROCESSING FACILITIES ARE WELL PLACED WITHIN KEY FARMING AREAS OVER 13,300 EMPLOYEES BALLYMENA OPERATING IN 20 FACILITIES OVER £400M CAPITAL INVESTMENT IN THE LAST 5 YEARS ALL 14 ELIGIBLE* MANUFACTURING SITES CERTIFIED MAL
Slide 37: Adjusted & reported earnings; tax & earnings per share
APPENDIX 3 A D J U S T E D & R E P O R T E D E A R N I N G S ; TA X & E A R N I N G S P E R S H A R E ADJUSTED & REPORTED EARNINGS TAX £M FY22 FY21 % FY22 FY21 Adjusted operating profit 140.6 132.5 Headline tax rate 19.0 19.0 Disallowed expenses 1.1 1.3 Net IAS 41 movement (2.8) (11.4) Prior year ad
Slide 38: Balance sheet & cash flow
APPENDIX 4 BA L A N C E S H E E T & CA S H F LOW BALANCE SHEET (£M) FY22 FY21 CASH FLOW (£M) FY22 FY21 Property, plant & equipment 434.8 376.7 Cash generated from operations 169.8 203.5 Intangible assets 231.3 203.8 Tax paid (9.8) (22.1) Right-of-use assets 65.5 68.8 Net cash from operating activiti
Slide 39: Cash allocation
APPENDIX 5 C A S H A L L O C AT I O N ( £ M ) FREE CASH ACQUISITION / CASH INFLOW / B A N K I N G FAC I L I T Y NET CAPEX DIVIDEND PAID FLOW (DISPOSAL)2 (OUTFLOW)1 £250m revolving credit facility FY22 158.4 92.4 38.5 32.8 (5.3) with five major banks FY21 180.9 71.1 10.7 27.9 71.2 Includes committed