Premier Foods Plc · LSE:PFD

Premier Foods — Investor Day (June 2014)

43 slides from Premier Foods's investor day presentation, Jun 19, 2014

  1. Slide 1: Premier Foods Worksop site visit

    Premier Foods Worksop site visit 19th June 2014

  2. Slide 2: Cautionary Statement

    CAUTIONARY STATEMENT Certain statements in this presentation are forward looking statements. By their nature, forward looking statements involve a number of risks, uncertainties or assumptions that could cause actual results or events to differ materially from those expressed or implied by those sta

  3. Slide 3: Agenda for Today

    1 2 3 4 5 AGENDA FOR TODA Y Time Activity Who 08:45 Arrival & Introductions All 09:00 Why have we invited you here today? Gavin Darby, Chief Executive Officer 09:10 Cost reduction programmes Alastair Murray, Chief Financial Officer Brian Leach, Operations Director 09:40 Innovation at Premier Foods H

  4. Slide 4: Gavin Darby, Chief Executive Officer

    Gavin Darby 1 Chief Executive Officer

  5. Slide 5: Today's Objectives

    1 2 3 4 TODAY’S OBJECTIVES Demonstrate how we can drive future category growth through: 1 – Delivering innovative new products to market – Our breadth of process & packaging capabilities 2 Recent cost reduction activity 3 Illustrate the scale and flexibility of our manufacturing facilities 4 Provide

  6. Slide 6: Category Focused Growth Strategy

    1 2 3 4 CATEGORY FOCUSED GROWTH STRATEGY Designed to drive value growth DRIVING CATEGORY GROWTH CONSUMERS CUSTOMERS Capitalise on UK specific Maximise mutual value Category insights to BRANDS from customer identify growth partnerships Drive Category opportunities building innovation with pace COSTS

  7. Slide 7: Our Investment Proposition

    1 2 3 4 OUR INVESTMENT PROPOSITION  Focused on growth categories  Broad stable of leading brands driving category growth through marketing and innovation  Diverse manufacturing processes provide wide scope to innovate  Strong capabilities to serve today’s multi-format retail environment  Contin

  8. Slide 8: Alastair Murray, CFO and Brian Leach, Operations Director

    Alastair Murray, Chief Financial Officer 2 Brian Leach, Operations Director

  9. Slide 9: Manufacturing Capabilities & Cost Reduction Programmes

    1 2 3 4 MANUFACTURING CAPABILITIES & COST REDUCTION PROGRAMMES 1 Knighton joint venture 2 Grocery supply chain infrastructure 3 Technologies & capabilities 4 Key performance indicators 5 Simplifying our business 6 Investing for growth and efficiency 9

  10. Slide 10: Knighton Joint Venture – Overview

    1 2 3 4 KNIGHTON JOINT VENTURE – OVERVIEW  A ‘Dry Powders’ site  Strong capabilities: – Spray drying – Agglomeration – Blending – Instantisation  Significant capacity availability  Home to support brands and non- branded products  Prohibitive closure costs  Joint venture decided as optimal sol

  11. Slide 11: Knighton Joint Venture – What This Solution Brings

    1 2 3 4 KNIGHTON JOINT VENTURE – WHAT THIS SOLUTION BRINGS  Joint expertise with Specialty Powders to I drive future growth  Increases Group’s branded focus I  Good news for 200 skilled employees I  Improved efficiencies for Ashford site I  Increased utilisation at Knighton I  2014 EBITDA impa

  12. Slide 12: Grocery Supply Chain Infrastructure - Manufacturing

    1 2 3 4 GROCERY SUPPLY CHAIN INFRASTRUCTURE - MANUFACTURING 9 Manufacturing sites delivering: 385,000 : Tonnes 1.1m : Pallets CARLTON MORETON WORKSOP CHARNWOOD STOKE ASHFORD KNIGHTON ANDOVER LIFTON 12

  13. Slide 13: Grocery Supply Chain Infrastructure - Distribution

    1 2 3 4 GROCERY SUPPLY CHAIN INFRASTRUCTURE - DISTRIBUTION GREAT BEAR (3rd Party) CORBY (3rd Party) • Northern RDC • Southern RDC • 29,000 PALS • 35,000 PALS • 24/7 Operation • 24/7 Operation RUGBY (CAKE NDC) • Transition from NDC to 2 RDC solution • Drives improved customer service • Significant re

  14. Slide 14: Transforming Our Service Offering

    1 2 3 4 TRANSFORMING OUR SERVICE OFFERING Service Offering (2012) Revised Service Offering • Day 1 for day 2 delivery • Day 1 for day 3 delivery • 7 day ordering & deliveries • 5 day ordering • Shared resource with top 5 customers and • Fixed minimum order quantities developing VMI • Internally focu

  15. Slide 15: Wide Range of Technologies & Capabilities

    1 2 3 4 WIDE RANGE OF TECHNOLOGIES & CAPABILITIES WORKSOP ASHFORD LIFTON Wet Savoury Dry Savoury Desserts Creamery Capabilities Capabilities Capabilities • Wet sauce manufacturer in glass & pouches • Dry mix powders combined with fat addition • Aseptic can line • Poppadoms & noodle manufactured in f

  16. Slide 16: Wide Range of Technologies & Capabilities - Cake

    1 2 3 4 WIDE RANGE OF TECHNOLOGIES & CAPABILITIES - CAKE CARLTON (BARNSLEY) MORETON STOKE Cake - Pies Cake – Chocolate Cake - Slices Capabilities Capabilities Capabilities • Pie • Mini rolls enrobing • Snack Pack packing technology • Slice • Large celebration cakes • Iced toppings • Fondant Fancies

  17. Slide 17: Key Performance Indicators – Track Record of Continuous Improvement

    1 2 3 4 KEY PERFORMANCE INDICATORS – A TRACK RECORD OF CONTINUOUS IMPROVEMENT Customer Service Zero Waste to CO2 Emissions up to 98.7%1 landfill reduced by 9%2 1 – 2014 YTD, excludes cake; 2 – C02 Equivalent emissions reduction 2011 - 2013 17

  18. Slide 18: Investing for Growth and Efficiency

    1 2 3 4 INVESTING FOR GROWTH AND EFFICIENCY 2014 PROJECTS DOUBLING OUR 2013 INVESTMENT GROWTH £35m-£40m c.£20m • New Snackpack slices line • Cadbury Desserts • Additional Pack formats • Bisto Best relaunch Snackpack Snackpack Other Growth Other Growth Growth COST REDUCTION Cost reduction Cost reduct

  19. Slide 19: Examples of Recent Investment

    1 2 3 4 EXAMPLES OF RECENT INVESTMENT CANNING FILLER - LIFTON TWIN POT FILLING - LIFTON AUTO PACKING - MORETON REPLACEMENT FRYER - WORKSOP 19

  20. Slide 20: Helen Warren-Piper and John Petre

    Helen Warren-Piper, Business Unit Director 3 John Petre, Technical & Innovation Director

  21. Slide 21: Our Category Approach

    1 2 3 4 OUR CATEGORY APPROACH  Drive category growth and market share  Clear category growth drivers grounded in shopper insights  Insight led innovation as a driver of category growth  Premier products in more meal occasions  Premier products in more family meal occasions 21

  22. Slide 22: Brand Metrics Demonstrate High Consumer Usage in UK

    1 2 3 4 BRAND METRICS DEMONSTRATE HIGH CONSUMER USAGE IN UK 108 107 104 94 90 Consumer Reach 76 Points 75 67 67  High ‘Consumer Reach Points’ a function of purchasing frequency  The Premier Foods brands above grew CRPs in 2013 Source: Kantar Worldpanel, Purchase Panel October 2013 22

  23. Slide 23: Key Consumer Trends in Savoury Food

    1 2 3 4 KEY CONSUMER TRENDS IN SAVOURY FOOD CONVENIENCE FEELS LIKE I’M COOKING REAL FOOD Busy Lives Increasing interest in food & Increased concerns about cooking (TV chefs) ‘what’s in it’ Pressure on time to cook & eat Time pressures / skill gaps Wet feels fresher than dry On the Go eating Emotiona

  24. Slide 24: Consumer Insight

    1 2 3 4 CONSUMER INSIGHT Definition of insight: a clear, deep understanding of a complicated problem or situation We always eat the same old Consumer Insight meals over and I’d love to be able to create the sort over again of delicious meals I see on TV, but I don’t have the time / skill to experime

  25. Slide 25: The World of Savoury

    1 2 3 4 THE WORLD OF SAVOURY COOKING SAUCES & FLAVOURINGS & SEASONINGS EASY EATING ACCOMPANIMENTS Competitive set Competitive set  Knorr Stock Pots  Ainslie soup & Cous Cous Competitive set  Knorr cubes  Pot Noodle  Blue Dragon  Aunt Bessies  Naked/ Kabuto/ Itsu  Pataks  Schwartz, Colmans,

  26. Slide 26: Innovation Process

    1 2 3 4 INNOVATION PROCESS Strategic Consumer Project Ideation Thinking Platforms Management  Category Strategies  Consumer Trends  Consumer Relevant  Product development  Technical Platforms  Consumer Segments  Differentiated  Technical validation  Brand Strategies  Consumer Insights  Sc

  27. Slide 27: Recent Innovation: Oxo Shake 'n' Flavour

    1 2 3 4 RECENT INNOVATION: OXO SHAKE ‘N’ FLAVOUR Consumer Consumer Project Ideation Insights Platform Management  I trust OXO to add  Easy flavour  A simple shaker  Idea  In store = 7 flavour to my transformer pot months cooking  Flavours to create  Worksop  Cubes can be fiddly family favour

  28. Slide 28: Upcoming Innovation

    1 2 3 4 UPCOMING INNOVATION STRATEGIC REVOLUTIONISE DRY PREMIUMISE GRAVY EXTEND OXO BEYOND OPPORTUNITY PACKET MIXES WITH WET WITH WET STOCK AND INTO WET CONSUMER FEELS LIKE I’M COOKING CONVENIENCE REAL FOOD TRENDS CONSUMER EASY FLAVOUR “REAL” INGREDIENTS ARE WET TRANSFORMER PLATFORMS TECHNOLOGY POUC

  29. Slide 29: Upweighting Our Technical & Innovation Resources

    1 2 3 4 UPWEIGHTING OUR TECHNICAL & INNOVATION RESOURCES  Increased Marketing resource in developing Innovation Head of Head of Innovation Innovation Savoury Sweet Innovation Innovation Innovation Innovation Controller Manager Controller Manager  Commitment to additional Technical Development reso

  30. Slide 30: Role of Technical Innovation

    1 2 3 4 ROLE OF TECHNICAL INNOVATION Innovation • Drive branded growth through fewer, bigger & better projects. • Development through the whole process • Innovation funnel • Development chefs Value • Deliver Business Improvement Savings • Drive complexity reduction • Non-branded product development

  31. Slide 31: Savoury Centre of Excellence - Capabilities

    1 2 3 4 SAVOURY CENTRE OF EXCELLENCE - CAPABILITIES Category Savoury Main brands Pilot Plant Demonstration Kitchen Capabilities Packaging Lab Sensory & Product Guidance Development chefs Sensory Panel Development Kitchen Shelf life testing

  32. Slide 32: Sweet Centres of Excellence

    1 2 3 4 SWEET CENTRES OF EXCELLENCE Category Sweet Centre Cake - Barnsley Desserts – Lifton (Devon) Main Brands Small cakes Large cakes Custard Products Celebration Cakes Rice Pudding Puddings Pies Cartons Film Cans Packaging Plastic Thermoforms Pots Cartons Heat sealing UHT Retorting Processes Baki

  33. Slide 33: Leveraging Innovation with Our Suppliers

    1 2 3 4 LEVERAGING INNOVATION WITH OUR SUPPLIERS APPROACH OUTCOME  Briefing based on category growth  More than 100 relevant ideas generated drivers/consumer insights  Screened to 12 big ideas  Supplier response on potential ideas  2 projects being fast tracked, 6 ideas  Feedback on key areas

  34. Slide 34: Premier Analytical Services

    1 2 3 4 PREMIER ANALYTICAL SERVICES  Premier Analytical Services (PAS) – the Group’s main science and testing laboratory  Each Year - 130 customers, 200 different tests, 37,000 samples  Innovation project support provision  Food safety, legal and quality expertise and testing  Troubleshooting a

  35. Slide 35: ARE dani eee bs?

    ARE dani eee bs? 7 Ney es | 7 Ye je. A | Litt fil

  36. Slide 36: Karl Smith, Factory General Manager

    Karl Smith 4 Factory General Manager

  37. Slide 37: Site History

    1 2 3 4 SITE HISTORY 1 Started life as a dried pea manufacturing site in the late 1930s – William Batchelor started a grocers business in Sheffield in the 1890s 2 A few owners in recent times: 1943 - 2001 2001 - 2006 2006 - Present 3 Manufacturing capabilities have been enhanced over time: – 1992: B

  38. Slide 38: Site Facts & Figures

    1 2 3 4 SITE FACTS & FIGURES Pre-2007 2013 % Increase Tonnes 21,000 84,000 300% SKUs 182 375 106% Headcount 320 484 51% Tonnage/head 66 174 165% Acreage 23 23 No change Branded mix 100% 95% (5%) Worksop is home to the following Brands 38

  39. Slide 39: Further Worksop Facts

    1 2 3 4 FURTHER WORKSOP FACTS  Worksop factory is organised in 4 Manufacturing Centres: – Sauces – Oxo – Noodles & Poppadoms – Salt & Savouries  A Technical support team exists in each centre, delivering  Skilled technical operators carry out changeovers, inspections & maintenance tasks  Reward

  40. Slide 40: Site Plan

    1 2 3 4 SITE PLAN Car Park Salt & Savoury Noodles & Poppadoms OXO Sauces 40

  41. Slide 41: Manufacturing Capabilities

    1 2 3 4 MANUFACTURING CAPABILITIES Manufacturing Product Formats Process Packing Centre Glass Jars Blending, Wet Sauces Filling, Labelling, Sauces Pasteurising, Wet Pouches Case-packing Foil/PET pouches Retorting Block Noodles with Dough mixing, Flow-wrapping Flow-wrap Noodles & flavour sachet Rolli

  42. Slide 42: Factory KPIs

    1 2 3 4 FACTORY KPIs KPI Target Year to date Accidents 14 (Full Year) 4 OHSAS 18001 Attendance 98.5% 98.6% Quality (cpmu) 12.6 (End of Year) 17 ISO 14001 Service 99.0% 99.7% Efficiency 72.5% 73.6% BRC A+ Grade Manufacturing £13.0m £12.7m Controllable Costs 42

  43. Slide 43: Factory Tour

    1 2 3 4 FACTORY TOUR 43

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