Greencore Group PLC · LSE:GNC
Greencore — FY2009 Earnings Presentation
23 slides from Greencore's earnings presentation, November 2009
Slide 1: Preliminary Results for the year ended 25 September 2009
Preliminary Results for the year ended 25 September 2009 1
Slide 2: FY09: A year of progress
FY09: A year of progress 1 Performance improved 2 Balance sheet reconfigured 3 Organisation enhanced Portfolio reshaped to deliver UK and 4 US Convenience Foods strategy 2
Slide 3: Financial summary
Financial summary €m FY09 FY08 %Change CC* Revenue 1,103.8 1,308.1 -1%** Group operating profit 72.9 77.3 +8%** Net finance costs*** (28.8) (28.3) Share of associates 0.4 1.3 PBT 44.5 50.3 +2% Tax (adjusted) (7.9) (7.8) PAT (result) 36.6 42.5 -% Adjusted EPS 17.4c 20.3c -% * constant currency | ** o
Slide 4: Convenience Foods
Convenience Foods €m FY09 FY08 %Change %Change 50 bps of margin accretion CC Constant currency profit growth in Revenue* 794.4 877.1 -9% +2% each quarter, Q2 - Q4 Operating 46.4 46.2 -% +14% Progress sustained in our profit* emerging US business with 46% Margin 5.8% 5.3% Q4 sales growth * excluding
Slide 5: Ingredients and Related Property
Ingredients and Related Property €m FY09 FY08 %Change %Change Solid Malt performance in the CC context of a challenging market Revenue* 304.6 353.5 -14% -8% Property contribution down c. €1m reflecting weak property market Operating 26.9 30.1 -11% -2% profit* Decision to exit Drummonds to Margin 8.8
Slide 6: Finance costs
Finance costs €m FY09 FY08 Interest (28.4) (29.2) Unwind discount to present value (0.4) 0.9 Finance cost before fair value and pensions (28.8) (28.3) Pension credit 1.1 9.1 Fair value of derivatives (20.0) (3.4) Net finance (47.7) (22.6) 6
Slide 7: Exceptional charges
Exceptional charges No increase in net exceptional loss in H2 FY09 exceptionals (€m) Profit/ Cash Loss Convenience Foods (8.7) (5.5) Ingredients (15.5) 6.6 Insurance receivable 2.4 1.4 Sugar related (3.4) (4.3) Net loss (post tax) (25.2) (1.8) 7
Slide 8: EPS and dividend
EPS and dividend €cent FY09 FY08 Dividend rebased to payout ratio of 40-50% Adjusted EPS 17.4 20.3 Dividend per share: Prudent approach Interim 3.0 5.3 to balance payout Final proposed 4.5 8.21 with medium-term Total 7.5 13.51 development needs 8
Slide 9: Cashflow
Cashflow €m FY09 FY08 Operating profit 70.8 76.6 Depreciation/Amortisation 30.3 28.4 Working capital (3.0) (14.2) Maintainance capex (9.4) (9.2) Pensions (8.5) (6.4) Other 4.0 (1.4) Free cashflow 84.2 73.8 Enhancement capital (25.3) (30.9) Exceptionals (current & prior years) (21.2) 73.2 Interest, t
Slide 10: Pension update and strategy
Pension update and strategy €m Detailed action plan for DB deficit Two largest DB schemes (comprising c. 87% of liabilities) being closed to future accrual FY09 FY08 from 31 December Intention is to close remaining DB schemes to Defined benefit future accrual in FY10 (“DB”) pension 75.5 53.7 All fut
Slide 11: Refinancing
Refinancing In April 2009, a new €360m three year bank facility was put in place A further €50m bi-lateral facility was agreed in May Result is a significant extension in the debt maturity profile: €m 50 360 46 65 Aug 2011 Apr 2012 Oct 2013 Oct 2015 Post year end, c. €50m of private placement financ
Slide 12: Return on capital employed
Return on capital employed ROCE* % 14.8% Capital employed: - book value of shareholders equity 14.5% - comparable net debt - exclude pension balances - exclude development land 30 bps improvement in returns FY08 FY09 * ROCE: Operating profit/capital employed 12
Slide 13: Operating review
Operating review 1 Convenience Foods performing strongly in tough environment Good underlying 2 Excellent margin recovery in Convenience Foods portfolio performance 3 Further momentum in the US 4 Resilient performance in Ingredients 13
Slide 14: Good underlying portfolio performance
Good underlying portfolio performance Operating Profit (€m) - continuing businesses +8% +6.5 -0.4 82.4 76.3 73.3 +14% -2% FY08 Convenience Ingredients FY09 FY09 Foods CC 14
Slide 15: Convenience Foods performing well in tough environment
Convenience Foods performing well 1 in tough environment A greater proportion of ‘value’ products Portfolio ‘aligned’ for Focus on retail channel and serving current customers well tougher environment ‘Best in class’ efficiency underpinning all that we do Innovation attracting new consumers and revi
Slide 16: Convenience Foods performing well in tough environment
Convenience Foods performing well 1 in tough environment Food Market: -0.5% Consumers seeking out value to Greencore: +5.7% Strong support for new convenience offerings in salads, sushi and baguettes Market share: Go (sandwiches) 25% Market share gains through customer focus, category scale and busi
Slide 17: Excellent margin recovery in Convenience Foods
Excellent margin recovery in 2 Convenience Foods Purchasing initiatives: 350 projects delivering c.€10m benefit in FY09 Sustained focus on purchasing, Labour productivity: 12% improvement in average pence per unit manufacturing and supply chain efficiency programmes Lean manufacturing: Hundreds of p
Slide 18: Further momentum in the US
Further momentum in the US 3 Markets continue to grow strongly Manufactured sandwiches +32% Packaged entrees +11% Salads + 6% Interest and investment in chilled prepared foods at ‘top 10’ retailers has increased significantly Transfer of 12 senior Greencore leaders from UK and Irish Convenience Food
Slide 19: Continued momentum in the US
Continued momentum in the US 3 New facility opened in Cincinnati focused on sandwiches for Kroger Roll-out of New sandwich capacity in Boston facility for existing and new sandwiches in H2 customers From standing start sandwiches now comprises 26% of US sales Greencore currently serving six of the t
Slide 20: Resilient performance in Ingredients
Resilient performance in Ingredients 4 Ingredients 14% decrease in malt deliveries % Change €m CC Weaker deliveries in Malt Decline in beer sales and customer destocking has impacted demand Revenue* 304.6 -8% Malt profit performance Business insulated because of long Operating Profit* 26.9 -2% susta
Slide 21: FY09: A year of progress
FY09: A year of progress Strong margin recovery and positive trajectory in UK Convenience Foods 1. PERFORMANCE IMPROVED Performance ‘underwritten’ by cost reduction Revenue doubled in Greencore USA €410m Group debt refinanced 2. BALANCE SHEET RECONFIGURED Pensions volatility being addressed Business
Slide 22: Outlook
Outlook Excellent start to FY10 in Convenience Foods - Continued improving performance in the UK - Further progress in the US Weaker performance in Malt deliveries expected, but offset by long-term agreements and energy On track to deliver modest earnings growth in FY10 22
Slide 23: Contact details
Contact details Patrick Coveney, Chief Executive Officer T: + 353 (0)1 6051045 E: patrick.coveney@greencore.com Geoff Doherty, Chief Financial Officer T: + 353 (0)1 6051018 E: geoff.doherty@greencore.com Imelda Hurley, Head of Investor Relations T: + 353 (0)1 6051018 E: imelda.hurley@greencore.com 2