Premier Foods Plc · LSE:PFD
Premier Foods — FY2023/24 Earnings Presentation
40 slides from Premier Foods's earnings presentation, May 16, 2024
Slide 1: Preliminary results for 52 weeks ended 30 March 2024
Preliminary results for 52 weeks ended 30 March 2024 16 May 2024
Slide 2: Alex Whitehouse, CEO
(Cremer FOODS Alex Whitehouse CEO ( enriching life THROUGH FOOD’
Slide 3: Full year ahead of expectations and return to volume growth in Q4
Full year ahead of expectations and return to volume growth in Q4 Revenue1 UK market share2 Trading profit Adjusted PBT £1,123m +29bps £180m £158m +15.1% vs prior year +14.0% +15.1% Adjusted eps Net debt/EBITDA Dividend Pension contributions 13.7p 1.2x +20% £33m +6.4% lowest ever leverage 3x eps gro
Slide 4: Delivering on all our strategic growth pillars
Delivering on all our strategic growth pillars 1 2 3 4 5 Infrastructure Inorganic Grow the UK core Category expansion International investment opportunities 1 £33m +72% +12%2 +13.6% +£13m vs prior year UK Branded Investing in efficiency Revenue growth from International FUEL10K revenue growth and pr
Slide 5: And a track record of sustained progress
And a track record of sustained progress Revenue (£m)1 Trading profit (£m)1,2 Pandemic 1,123 180 +6.4% elevated +6.9% CAGR volumes CAGR 1,006 158 934 148 148 901 129 133 847 824 FY18/19 FY19/20 FY20/21 FY21/22 FY22/23 FY23/24 FY18/19 FY19/20 FY20/21 FY21/22 FY22/23 FY23/24 Adjusted PBT1,2 Net debt/E
Slide 6: Continued progress on our ESG commitments
Continued progress on our ESG commitments PRODUCT PLANET PEOPLE 44% Scope 1 & 2 Management colleagues Health benefit1 and 14% emissions reductions 46% who are higher nutritional female Standard2 +19%2 Solar panel investment c.950,000 High nutritional at Stoke site meals donated standard sales growth
Slide 7: Duncan Leggett, CFO
\" PREMIER : FOODS Duncan Leggett CFO ( enriching life THROUGH FOOD’
Slide 8: Another very strong year
Another very strong year £m FY23/24 Change vs PY Comments Branded revenue 958 13.5% Particularly strong Grocery performance and improved Sweet Treats in H2 Non-branded revenue 165 25.2% Pricing and new contract benefits Total revenue 1,123 15.1% Divisional contribution 254 17.3% Ongoing supply chain
Slide 9: Growth across both Grocery and Sweet Treats
Growth across both Grocery and Sweet Treats £m FY23/24 Change vs PY Comments Grocery Branded revenue 741 16.5% All major brands in growth; Ambrosia becomes Group’s fourth £100m brand Non-branded revenue 95 17.8% Largely due to price increases, Charnwood volumes down Total revenue 836 16.7% Divisiona
Slide 10: Leverage at lowest ever levels of 1.2x Net debt/EBITDA
Leverage at lowest ever levels of 1.2x Net debt/EBITDA Cash flow bridge FY24/25 guidance £m £m Working capital Neutral 350 Depreciation (incl. software amortisation) c.£25m 1.5x 1.0x 1.2x Amortisation of brands c.£20m 300 274 204 Capital expenditure £40-45m 250 30 236 Restructuring - cash c.£5m 14 2
Slide 11: 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 12: Capital allocation framework
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 selected very carefully and are dividend suspended • Facilitates manufacturing of new performing str
Slide 13: Alex Whitehouse, CEO
PREMIER FOODS Alex Whitehouse CEO SPICE TAILO ( enriching life THROUGH FOOD’
Slide 14: 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 15: 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 16: Consistent UK branded revenue growth and market share gains
1 Consistent UK branded revenue growth and market share gains Revenue Market share UK Branded Revenue trend Grocery market share trend £m 27% +200bps over 3yrs 900 26% 850 Pandemic elevated 800 volumes 25% 750 24% 700 23% 650 22% 600 21% 550 20% 500 FY20/21 FY21/22 FY22/23 FY23/24 FY18/19 FY19/20 FY
Slide 17: Continued innovation and upweighted brand investment
1 Continued innovation and upweighted brand investment Product innovation aligned to Mr Kipling ‘Best ever’ Increased brand Ambrosia Deluxe consumer trends Mince Pies investment Health & Nutrition Convenience Snacking & On the go ▪ Focuses on indulgence trend, although is ▪ Contributed to share non-
Slide 18: Great instore execution and distribution gains
1 Great instore execution and distribution gains Supported by strong retailer relationships Cross-brand ‘Win a Instore KPIs Batchelors Aquaman Dinner Give a Dinner’ Distribution points Accelerating +1.2% performance Bisto during H2 Paxo Off-shelf display Sharwood’s All Grocery Loyd +34% categories G
Slide 19: Our Nissin partnership goes from strength to strength
1 Our Nissin partnership goes from strength to strength Exceptional Nissin revenue progression Market leader in authentic noodles Future plans £m 40 30 +54% 5yr CAGR 20 ▪ Will commence 1 distribution of authentic 68% Demae Ramen range in 10 market share FY24/25 ▪ Opportunity for 0 ▪ Very successful
Slide 20: We’re heading into a more stable environment
1 We’re heading into a more stable environment Food inflation1 is back down to more stable levels Volume & Price dynamics in FY23/24 UK Branded Revenue 3yr CAGRs % 20 5% % YoY increase in 18 Food & Non- 16 alcoholic beverages Volume 3% 14 12 10 Price 8 6 Q1 Q2 Q3 Q4 4 4.0 FY17-20 FY21-24 2 ▪ Continu
Slide 21: Infrastructure investment
2 Infrastructure investment Capex fuels branded growth Efficiency & energy reduction Solar panel installations Mr Kipling sponge puddings Cash Capital generation investment Gross Branded growth margin accretion 6 2 done to come Brand investment ▪ Air compressor ▪ Installed solar panels on replacemen
Slide 22: New categories up +72%, driven by Porridge & Ice-cream
3 New categories up +72%, driven by Porridge & Ice-cream Ambrosia Porridge Ice Cream Oxo Marinades • Revenue 10.2% increased 92% in +56% FY23/24 Sales growth • Range of five marinade variants in market 5.2% 2.3% Retailer Cape Herb & Spice distribution Mar 2022 Mar 2023 Mar 2024 % value share • Reven
Slide 23: International revenue increased 12%
4 International revenue increased 12% 1 Ireland Australia EMEA USA +4,700 +1,000 +3,000 distribution stores stores points • Strong growth across all • Strong market leadership • Revenue growth 35%; Grocery brands, up 17% of Cake & Indian sauces • FY23/24 revenue growth increased distribution of • Th
Slide 24: The Spice Tailor: Returns ahead of plan
5 The Spice Tailor: Returns ahead of plan Performance Instore execution Brand investment & Product Innovation Significant geographical expansion Distribution increased to 10 countries Sales growth ▪ Digital brand advertising in UK & Australia Market share ▪ Significant weighted ▪ Strong NPD distribu
Slide 25: Progress on FUEL10K post acquisition
5 Progress on FUEL10K post acquisition Instore activation Product innovation 1 +30% Organisational Full year integration revenue growth complete +130bps2 ▪ 25g Protein breakfast shakes Market ▪ Leveraging Ambrosia Porridge pots ▪ Nutritionally Complete Meal solutions, Initial returns success and FUE
Slide 26: M&A approach
5 M&A approach 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 investment our proven branded FUEL
Slide 27: Further strategic progress expected in FY24/25
Further strategic progress expected in FY24/25 1 UK branded core 2 Infrastructure investment 3 New categories 4 International Growth ▪ Drive sales of Mr Kipling cake in North America and ▪ Example: Expanding capacity Australia/New Zealand for successful Ambrosia porridge pots range ▪ Continue to bui
Slide 28: Summary & outlook
Summary & outlook 1 ― Another very strong year, ahead of expectations and a return to volume growth in Q4 2 ― Strong progress against all five strategic pillars 3 ― FY24/25 will see a return to volume growth, as demonstrated in Q4, accompanied by lower price/unit 4 ― Continue to drive five pillar gr
Slide 29: Q&A
PREMIER FOODS Q&A ( enriching life THROUGH FOOD’
Slide 30: 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 31: 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 32: Definitions
Definitions ▪ The period ‘FY23/24’ refers to the 52 weeks ended 30 March 2024, unless where otherwise stated. The period ‘FY22/23’ refers to the 52 weeks ended 1 April 2023, unless otherwise stated. ▪ Trading profit is defined as Profit/(loss) before tax before net finance costs, amortisation of bra
Slide 33: 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 34: UK Grocery market
UK Grocery market 17% 38% 43% Chilled Frozen Ambient & Fresh 57% 62% 83% Branded Private Label Branded Private Label Branded Private Label Market size £43bn £57bn £9bn Premier Foods Flavourings & Ambient Ambient QMS Cooking Sauces categories Seasonings Desserts Cake Category size £500m £532m £1,203m
Slide 35: Statutory vs Headline Revenue
Statutory vs Headline Revenue Quarter 4 Full Year £m Knighton Knighton Statutory Headline Statutory Headline Foods Foods Grocery Branded revenue 198 - 198 740 - 741 Non-branded revenue 24 (2) 22 110 (15) 95 Total revenue 222 (2) 220 850 (15) 836 Sweet Treats Branded revenue 57 - 57 218 - 218 Non-bra
Slide 36: 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 37: Adjusted earnings per share
Adjusted earnings per share £m FY23/24 FY22/23 Trading profit 180 157 Net regular interest (22) (20) Adjusted PBT 158 137 Tax (25%/19%) (40) (26) Adjusted earnings 118 111 Weighted average shares in issue (million) 862.4 861.2 Adjusted earnings per share (pence) 13.7p 12.9p 37
Slide 38: Interest and taxation
Interest and taxation £m FY23/24 FY22/23 Change Senior secured notes interest 12 12 - Interest Bank debt interest 8 6 (2) 20 18 (2) Amortisation of debt issuance costs 2 2 - Net regular interest 22 20 (2) ▪ Tax charge of £39m, due to operating activities charge at UK corporation tax rate of 25% ▪ No
Slide 39: Pensions
Pensions 30 March 2024 1 April 2023 IAS19 Accounting ▪ Liabilities decreased by £63m valuation (£m) Premier Premier to £2,964m RHM Combined RHM Combined Foods Foods ▪ Asset values £228m lower at £3,565m Assets 3,032 533 3,565 3,240 553 3,793 ▪ Assets reduced by more than Liabilities (2,233) (731) (2
Slide 40: Summarised balance sheet
Summarised balance sheet £m 30 March 2024 1 April 2023 Property, plant & equipment 190 186 Intangibles / Goodwill 992 975 Deferred tax asset 22 22 Retirement benefit assets 810 960 Non-current Assets 2,014 2,143 Working Capital - Stock 99 94 - Debtors 116 103 - Creditors (265) (255) Total Working Ca