Slide 1: Results for the year ended 27 September 2019
RESULTS For the year ended 27 September 2019 EVENT / REF NO. 1
Slide 2: Disclaimer - Forward Looking Statements
DISCLAIMER ─ FORWARD LOOKING STATEMENTS Certain statements made in this document are forward‐looking. These represent expectations for the Group’s business, and involve known and unknown risks and uncertainties, many of which are beyond the Group’s control. The Group has based these forward‐looking
Slide 3: Today's Agenda
TODAY’S AGENDA FY19 Highlights Patrick Coveney Financial Review Eoin Tonge Operating & Strategic Update Patrick Coveney Q&A FY19 RESULTS | NOVEMBER 2019 3
Slide 4: FY19 Highlights
FY19 HIGHLIGHTS Patrick Coveney FY19 RESULTS | NOVEMBER 2019 4
Slide 5: FY19 Highlights
FY19 HIGHLIGHTS • Refocused portfolio and strategy • Resilient financial performance • Anticipating a year of profitable growth FY19 RESULTS | NOVEMBER 2019 5
Slide 6: Financial Review
FINANCIAL REVIEW Eoin Tonge FY19 RESULTS | NOVEMBER 2019 6
Slide 7: FY19 P&L Summary
FY19 P&L SUMMARY £m unless otherwise stated FY19 FY18 Change Group Revenue 1,446.1 1,498.5 -3.5% Pro Forma Revenue Growth (%) +2.6% Adjusted Operating Profit 105.5 104.6 +0.9% Adjusted Operating Margin (%) 7.3% 7.0% +30 bps Group Operating Profit 99.8 49.8 +100.4% Adjusted Profit Before Tax 92.3 79.
Slide 8: Pro Forma Revenue
PRO FORMA REVENUE MODEST GROWTH IN A CHALLENGING ENVIRONMENT Pro Forma Revenue Growth composition FY19 PERFORMANCE FTG categories Other convenience categories Group • Pro forma revenue +2.6% 6 • 3.3% pro forma growth in food to go categories 5 4 ─ greater contribution from £484m 3.3% manufactured pr
Slide 9: Profit Progression
PROFIT PROGRESSION MARGIN DRIVEN BY MIX AND EFFICIENCIES Profit performance FY19 PERFORMANCE £m +1.4% FY18 FY19 • Growth in food to go 150 categories driven by volume +0.9% growth and strong operational 100 140.0 142.0 performance 104.6 105.5 50 • Mixed performance in other Adj EBITDA Adj Op Profit
Slide 10: Free Cash Flow Improvement
FREE CASH FLOW IMPROVEMENT IMPROVEMENT IN UNDERLYING CONVERSION FY19 PERFORMANCE Free Cash Flow • Overall performance impacted by US cash flows £m 142.0 150 • Excluding US cash flows -1.6 ─ converted 47% of Adjusted -30.6 100 -9.6 EBITDA to Free Cash Flow -20.4 3.3 67.1 (FY18: 33%) 12.2 54.9 -16.0 5
Slide 11: Net Debt at 1.8x EBITDA
NET DEBT AT 1.8X EBITDA FY19 PERFORMANCE Net debt, FY18 – FY19 • US disposal and reset capital £m structure 300 • Three dividend payments 0 during the financial year -100 521.6 • Includes increased debt -200 755.7 associated with the acquisition -300 12.5 -288.5 of Freshtime -400 -500 54.9 50.3 13.6
Slide 12: Capital Allocation
CAPITAL ALLOCATION FY19 IN ACTION FY19 Disciplined organic and inorganic investment OPTIMISE 1.5 – 2.0x Net Debt: Progressive £70m2 TOTAL EBITDA1 dividend SHAREHOLDER 1.8x +11.3% Incremental shareholder return RETURNS £509m ROIC 14.4% (FY18:15.6%) 1 As measured under financing agreements 2 Includes
Slide 13: Operating & Strategic Update
OPERATING & STRATEGIC UPDATE Patrick Coveney FY19 RESULTS | NOVEMBER 2019 13
Slide 14: FY19 Highlights
FY19 HIGHLIGHTS • Sold US business at a premium and used proceeds to: ─ reduce leverage ─ underpin future growth plans ─ return £509m of capital to shareholders • Reshaped balance sheet, structure and team • Reset our strategy; outlined at our Capital Markets Day in September • Acquired Freshtime FY
Slide 15: Our Strategy: Winning in UK Convenience Food
OUR STRATEGY WINNING IN UK CONVENIENCE FOOD 1 GROWTH 2 RELEVANCE Drive growth in expanding food to go market Deepen customer relevance 3 DIFFERENTIATION Adopt a distinctive and repeatable Greencore Way of working GREAT PEOPLE AT GREENCORE SUSTAINABLE FOOD THE CORE EXCELLENCE BUSINESS FY19 RESULTS |
Slide 16: Performing Solidly in a Subdued Food to Go Market
1 PERFORMING SOLIDLY IN A SUBDUED FOOD TO GO MARKET FY19 revenue performance FOOD TO GO CATEGORIES REMAIN ATTRACTIVE 3.3% • Long term structural drivers in place -0.3% Greencore food to go1 Food to go market2 ─ health, freshness, and local sourcing H2 19 revenue performance £447m ─ fragmenting meal
Slide 17: Drive Growth in Expanding Food to Go Market
1 DRIVE GROWTH IN EXPANDING FOOD TO GO MARKET FY19 REVIEW BROADENING OUR PRODUCT PROPOSITION ENABLING CONSUMERS TO BUY MORE INNOVATION IN THE CORE SCALE IN MORE CATEGORIES SPACE OPTIMISED CONSUMER REACH EXTENDED • 47%1 SKUs new to • Building scale in • Improved • Bespoke café channel market – meal s
Slide 18: Drive Growth in Expanding Food to Go Market: Acquisition of Freshtime
1 DRIVE GROWTH IN EXPANDING FOOD TO GO MARKET ACQUISITION OF FRESHTIME • £56m acquisition expanded presence in meal salads and chilled snacking • Strong strategic fit • Good progress since acquisition • FY20 objectives ─ leverage commercial platform ─ execute operationally ─ exploit synergies FY19 R
Slide 19: Deepen Customer Relevance
2 DEEPEN CUSTOMER RELEVANCE FY19 REVIEW HIGHLIGHTS Achieved top score again in Advantage Report1 • Extended contracts with Strategic alignment several customers People Category development • Invested in initiatives to drive Retailer own label returns across shared value Trade & shopper marketing cha
Slide 20: Adopt a Distinctive and Repeatable Way of Working
3 ADOPT A DISTINCTIVE AND REPEATABLE WAY OF WORKING FY19 REVIEW GREAT PEOPLE AT GREENCORE SUSTAINABLE FOOD THE CORE EXCELLENCE BUSINESS • Self-auditing of food • Implemented award- • Deployed analytical • Up-weighted quality and safety winning line manager and data technology sustainability • Step-u
Slide 21: Entering FY20 with Clear Objectives
ENTERING FY20 WITH CLEAR OBJECTIVES FY20 STRATEGIC PRIORITIES OUTLOOK • Navigate through uncertain external • Anticipate year of profitable growth environment • Medium term financial ambitions • Broaden product and channel proposition • Mid single digit organic revenue growth • Enhance operational p
Slide 22: Q&A
Q&A FY19 RESULTS | NOVEMBER 2019 22
Slide 23: Appendix: Supplementary Financials
APPENDIX 1 SUPPLEMENTARY FINANCIALS FY19 RESULTS | NOVEMBER 2019 23
Slide 24: Definitions of APMs
DEFINITIONS OF APMS The Group uses the following Alternative Performance Measures (‘APMs’) which are non-IFRS measures to monitor the performance of its operations and of the Group as a whole PRO FORMA REVENUE GROWTH ADJUSTED PROFIT BEFORE TAX Pro Forma Revenue Growth adjusts FY19 reported revenue t
Slide 25: Definitions of APMs (continued)
DEFINITIONS OF APMS (CONTINUED) CAPITAL EXPENDITURE NET DEBT The Group defines Maintenance Capital Expenditure as the expenditure Net Debt comprises current and non-current borrowings less net cash required for the purpose of sustaining the operating capacity and asset base of and cash equivalents t
Slide 26: FY19 P&L: Other Financial Items
FY19 P&L: OTHER FINANCIAL ITEMS £m FY19 FY18 Net interest payable (14.2) (26.2) Tax (before exceptional items) (13.2) (13.0) Discontinued operations (before exceptional items) 8.9 31.2 Group exceptional items (after tax) 25.9 (51.7) Pence per share FY19 FY18 Adjusted EPS 16.0 15.1 Basic EPS 19.9 4.8
Slide 27: FY19 Cashflow
FY19 CASHFLOW £m FY19 FY18 EBITDA 151.1 205.0 Working capital (22.8) (15.9) Maintenance capex (30.6) (36.7) Exceptional cashflows (9.6) (15.0) Interest/tax/pension/other (33.2) (45.0) Free Cash Flow 54.9 92.4 Strategic capex (13.6) (26.8) Dividends (50.3) (35.7) M&A (net) 755.7 - Tender offer (509.0
Slide 28: FY19 Balance Sheet Highlights
FY19 BALANCE SHEET HIGHLIGHTS £m FY19 FY18 Net Debt 288.5 501.1 Net Debt:EBITDA (x)1 1.8 2.3 Pension deficit (net of deferred tax) 74.8 73.6 Average Invested Capital 628.3 590.4 ROIC (%) 14.4 15.6 1 as measured under financing agreements FY19 RESULTS | NOVEMBER 2019 28
Slide 29: IFRS16 Leases
IFRS16 LEASES • Adopting IFRS16 in FY20; no restatement of prior periods • Summary impact on financial statements in transition year (FY20) ─ c.£46m increase in liabilities, corresponding increase in assets with a small net adjustment to reserves ─ minimal impact on profit measures, albeit significa
Slide 30: Appendix: Greencore Profile
APPENDIX 2 GREENCORE PROFILE FY19 RESULTS | NOVEMBER 2019 30
Slide 31: Greencore... Our Investment Case
GREENCORE… OUR INVESTMENT CASE STRONG PLATFORMS ON WHICH TO BUILD MEDIUM TERM FINANCIAL AMBITION Deep customer relationships with mandate to MID SINGLE-DIGIT do more ORGANIC REVENUE GROWTH Leadership positions in food to go – the UK’s HIGH SINGLE-DIGIT most attractive food category ADJUSTED EPS GROW
Slide 32: Greencore... Operating in Attractive Categories
GREENCORE… OPERATING IN ATTRACTIVE CATEGORIES STRATEGICALLY RELEVANT… FAST GROWING… Market CAGR, FY14-FY181 FY14 FY18 1.8% 5.8% UK food market UK food to go market Food to go market growth forecast, 2019 - 20241 For consumers… …for current customers …and for new entrants 5.0% Supermarkets & • Meets
Slide 33: Greencore... Set Up for Growth
GREENCORE… SET UP FOR GROWTH Portfolio weighted towards food to go Diverse customer base Food to go Other convenience Co-op Morrisons Waitrose categories categories M&S Aldi Lidl Sandwiches Ready Meals Sainsburys Boots Starbucks Salads, sushi & chilled Other (inc. Irish snacking ingredients) Tesco P
Slide 34: Greencore... Well-Invested Network & Capacity for Growth
GREENCORE… WELL-INVESTED NETWORK & CAPACITY FOR GROWTH FOOD TO GO OTHER CONVENIENCE DISTRIBUTION c.£300m investment in current network over the past 5 years 13 production units 8 production units 17 distribution across 9 locations across 7 locations centres • 8 sandwich-focused • 3 chilled ready mea
Slide 35: Greencore... Attractive Economic Model
GREENCORE… ATTRACTIVE ECONOMIC MODEL STRONG FINANCIAL METRICS IN FY19… …WITH A TRACK RECORD OF DELIVERY1 Revenue UK & Ireland Revenue Adjusted EBITDA CAGR 8.5% £1,446.1m £142.0m CAGR current categories2 10.3% Adjusted Operating Profit Adjusted EBITDA Margin FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY
Slide 36: IR Calendar & Contacts
IR CALENDAR & CONTACTS Q1 Trading Update 28 January 2020 Jack Gorman Annual General Meeting 28 January 2020 Head of Investor Relations H1 Results 19 May 2020 Q3 Trading Update 28 July 2020 investor.relations@greencore.com FY20 Period End 25 September 2020 +353 1 605 1000 FY20 Results 24 November 202