Cranswick Plc · LSE:CWK
Cranswick — Shareholder Meeting (July 2023)
31 slides from Cranswick's shareholder meeting presentation, Jul 24, 2023
Slide 1: Annual General Meeting 24 July 2023
ANNUAL GENERAL MEETING 24 JULY 2023 AGM_Presentation_2023_v12.indd 1 21/07/2023 12:31
Slide 2: Business Update, Financial Highlights, Resolutions and Voting
TH E VALU AGEEN WEDACR EATE BUSINESS UPDATE ADAM COUCH, CEO FINANCIAL HIGHLIGHTS MARK BOTTOMLEY, CFO RESOLUTIONS AND VOTING DISCLAIMER: Certain statements in this presentation are forward looking statements. By their nature, forward looking statements involve a number of risks, uncertainties or assu
Slide 3: Business Update
BUSINESS UPDATE A DA M CO U C H CHIEF EXECUTIVE OFFICER 2 AGM_Presentation_2023_v12.indd 2 21/07/2023 12:31
Slide 4: Our Long-Term Trading Record
B U SI N ES S U PDATE OUR LONG -TERM TRADING RECORD ADJ U STED PROFIT B EFOR E TA X 1 (£M) DIVI DEN D PER S HAR E (PENCE) £2,323m 79.4 140.1 £2,009m 136.9 75.6 129.7 70.0 Revenue 33 years of unbroken dividend growth £1,667m 60.4 102.3 55.9 53.7 92.0 90.2 44.1 75.5 £1,005m 37.5 64.4 34.0 57.8 32.0 £7
Slide 5: Financial Performance
B U SI N ES S U PDATE FINANCIAL PERFORMANCE Revenue Adjusted operating profit1 ROCE2 Demonstrated ability to pass through +15.7% +4.2% 15.8% significant cost inflation Stable long-term margins DPS Adjusted EPS1 Free cash flow3 Strong return on capital employed +5.0% +2.2% £149.2m Unbroken dividend g
Slide 6: Commercial and Strategic Highlights
B U SI N ES S U PDATE COMMERCIAL AND STRATEGIC HIGHLIGHTS 5 YEAR CAGR Strong revenue growth reflecting inflation recovery with operating margin Compound annual growth improving in the second half of the year rates to 25 March 2023 Broad-based inflationary pressure across the Group’s cost base contin
Slide 7: Cranswick's Value Creation Model
B U SI N ES S U PDATE CRANSWICK’S VALUE CREATION MODEL PU R POS E Creating great tasting, affordable food; authentically made and sustainably produced OU R GU I DI NG PRI NCI PLES M EDI U M TER M TARG ETS Q UA LIT Y VA LU E Delight the customer Vertical integration Revenue Growth Lead on premium Tec
Slide 8: Our Strategy and Growth Agenda
B U SI N ES S U PDATE OUR STRATEGY AND GROW TH AGENDA CONSOLIDATE EXPAND DIVERSIFY I NCR EAS E MAR KET S HAR E DRIVE TH E COR E I DENTI F Y N EW OPPORTU N ITI ES I N G ROW TH CATEGORI ES Self sufficiency in UK pigs continuing to increase Prepared poultry creates new opportunity for growth Transforma
Slide 9: Consolidation and Driving the Core
B U SI N ES S U PDATE CONSOLIDATION AND DRIVING THE CORE Investment and new business wins support growth FRESH PORK COOKED BACON S LOW COOK • Semi automated butchery investment • Production commenced in April 2021 • Food hero, Kevin Morel, brings unique skills • New retail and food service customers
Slide 10: Expanding Our Offer: Driving Our Poultry Business
B U SI N ES S U PDATE EXPANDING OUR OFFER Driving our poultry business EYE I NVESTM ENT & G ROW TH B R EADED CH ICKEN SITE COM M I S SION ED DEVELOPI NG CU STOM ER R EL ATION S H I PS • Peak capacity of 1.4m birds per week • Production commenced in April 2022 and volumes • Major QSR launch in H2 FY2
Slide 11: Expanding Our Offer: Mediterranean Foods Portfolio
B U SI N ES S U PDATE EXPANDING OUR OFFER Increasing our Mediterranean Foods portfolio CAPAB I LIT Y I N CONTI N ENTAL M EATS DEVELOPM ENT OF HOU MOU S AN D DI PS B ROADEN I NG TH E PORTFOLIO • Good growth momentum from new business wins • Significant distribution gains for Ramona’s brand • Redesign
Slide 12: Diversification: Growing Our Pet Food Business
B U SI N ES S U PDATE DIVERSIFICATION Growing our pet food business Cranswick Pet Products (formerly Grove) acquired in January 2022 Heads of terms in place for long-term supply agreement between Cranswick and Pets at Home Producing a range of dog food for Pets at Home owned brands Supply commences
Slide 13: Delivering Our ESG Commitments
B U SI N ES S U PDATE DELIVERING OUR ESG COMMITMENTS 11 SITES WITH SOLAR INSTALLED BOARD LEVEL ESG COMMITTEE 7% REDUCTION IN SCOPE 1 AND SCOPE 2 OR IN PROGRESS SOYA REDUCTION AND REPLACEMENT 1 MILLION MEALS DONATED FURTHER AWARD WINS 52 weeks ended 25 March 2023 12 AGM_Presentation_2023_v12.indd 12
Slide 14: Summary
B U SI N ES S U PDATE SUMMARY ESTABLISHED TRACK RECORD CONSISTENT AND PROVEN STRATEGY POSITIVE OUTLOOK High quality sustainable growth achieved across Expansion of Poultry vertical continues Long term prospects remain strong all categories Step change in momentum at Pet Products Increasing levers fo
Slide 15: Financial Review
FINANCIAL REVIEW MAR K BOT TO M LEY CHIEF FINANCIAL OFFICER 14 AGM_Presentation_2023_v12.indd 14 21/07/2023 12:32
Slide 16: Financial Highlights
FI NANCIAL R EVI EW FINANCIAL HIGHLIGHTS Revenue (£m) +15.7% Adjusted profit before tax (£m)1 +2.3% 2023 2,323.0 2023 140.1 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 +2.2% Dividend per share (p) +5.0% 2023 210.0 2023 79.4 2022 205.4 2022
Slide 17: FY23 Summary
FI NANCIAL R EVI EW FY23 SUMMARY £m FY23 FY22 Change Revenue 2,323.0 2,008.5 +15.7% Like-for-like revenue growth1 – – +14.4% Adjusted gross margin2 13.0% 14.0% -104bps Adjusted operating profit2,3 146.5 140.6 +4.2% Adjusted operating margin2,3 6.3% 7.0% -69bps Adjusted profit before tax2,3 140.1 136
Slide 18: Strong Revenue Growth
FI NANCIAL R EVI EW STRONG REVENUE GROW TH R EVEN U E B RI DG E (£M) Revenue growth is driven by: • Proactive inflation recovery across all categories +1.1% +3.6% +0.1% • Strong contribution from new customer contracts and new 22.7 product lines 2.7 +1.7% 71.2 • Full year contribution from Pet Produ
Slide 19: Stable Margins
FI NANCIAL R EVI EW STABLE MARGINS Adjusted gross margin1, 2 Adjusted EBITDA margin1, 2 Adjusted operating margin1, 2, 3 Average: 13.5% Average: 9.5% Average: 6.6% 10.4% 14.2% 10.0% 14.0% 7.0% 7.0% 13.0% 13.3% 9.3% 9.3% 13.0% 6.4% 6.3% 6.3% 8.4% FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 FY19
Slide 20: Strong Cash Generation
FI NANCIAL R EVI EW STRONG CASH GENERATION Net debt (£m) (18.1) (23.4) (20.4) 215.3 (83.9) (101.4) (106.0) (36.3) (16.3) (12.3) March 2022 EBITDA Biological assets Working capital Taxation Net capex Dividends Leases Other March 2023 Net debt/EBITDA Net debt excluding IFRS 16 lease liabilities at Mar
Slide 21: Track Record of Value Creation
FI NANCIAL R EVI EW TRACK RECORD OF VALUE CREATION TOTAL CU M U L ATIVE CAPITAL EM PLOYED (£M) AN D ROCE (%) • Proven track record of attractive ROCE whilst continuing to deploy capital via strong investment pipeline Average Capital Employed ROCE • £120m spent on acquisitions in the past five years
Slide 22: Strategic Investment Continues
FI NANCIAL R EVI EW STRATEGIC INVESTMENT CONTINUES CONSOLIDATE EXPAND £10m Phase 1 of major expansion at Hull Fresh Pork £8m Expansion of production capacity at Bury Continental site £10m Expansion of Milton Keynes Cooked Meats site £8m Investment to double the ‘slow cook’ capacity at Hull Cooked Me
Slide 23: A Sustainable Capital Allocation Framework
FI NANCIAL R EVI EW A SUSTAINABLE CAPITAL ALLOCATION FRAMEWORK INVESTING IN THE BUSINESS TO CAPEX OF C . £100M TO ADD CAPACIT Y, SUPPORT OUR GROW TH STR ATEGY CAPABILIT Y AND AUTOMATION MAINTAIN INVESTMENT TARGET LEVER AGE OF GR ADE BALANCE SHEET <2X NET DEBT: EBITDA MAINTAIN PROGRESSIVE COVER OF ≥2
Slide 24: FY24 Q1 Trading Update
FI NANCIAL R EVI EW FY24 Q1 TRADING UPDATE CURRENT TR ADING • Reported revenue 14.7% ahead • UK revenue ahead across all 4 food categories • Cost inflation proactively managed and mitigated through tight cost control INVESTMENT • Ongoing investment in retail packing, slow cook capacity and efficienc
Slide 25: Resolutions and Voting
RESOLUTIONS AND VOTING 52 weeks ended 25 March 2023 24 AGM_Presentation_2023_v12.indd 24 21/07/2023 12:32
Slide 26: Resolutions and Voting: Resolutions 1-4
R ESOLUTION S AN D VOTI NG FOR AGAINST ABSTAIN MILLIONS OF SHARES 1. To receive and adopt the Strategic Report and the Report of the Directors 43.7 0.0 0.3 and the Accounts for the 52 weeks ended 25 March 2023 2. To receive and approve the Remuneration Committee Report for the 39.6 4.4 0.0 52 weeks
Slide 27: Resolutions and Voting: Resolutions 5-8
R ESOLUTION S AN D VOTI NG FOR AGAINST ABSTAIN MILLIONS OF SHARES 5. To re-elect Mark Bottomley as a Director 42.5 1.5 0.0 6. To re-elect Jim Brisby as a Director 42.5 1.5 0.0 7. To re-elect Adam Couch as a Director 42.7 1.3 0.0 8. To re-elect Pam Powell as a Director 43.2 0.8 0.0 52 weeks ended 25
Slide 28: Resolutions and Voting: Resolutions 9-12
R ESOLUTION S AN D VOTI NG FOR AGAINST ABSTAIN MILLIONS OF SHARES 9. To re-elect Tim Smith as a Director 41.7 2.1 0.2 10. To elect Chris Aldersley as a Director 42.5 1.5 0.0 11. To elect Yetunde Hofmann as a Director 44.0 0.0 0.0 12. To re-appoint PricewaterhouseCoopers LLP as auditors 43.7 0.3 0.0
Slide 29: Resolutions and Voting: Resolutions 13-16
R ESOLUTION S AN D VOTI NG FOR AGAINST ABSTAIN MILLIONS OF SHARES 13. To authorise the Directors to determine the auditors’ remuneration 44.0 0.0 0.0 14. To authorise the Directors to allot shares 43.3 0.7 0.0 15. To authorise the Directors to disapply pre-emption rights (general) 41.1 2.9 0.0 16. T
Slide 30: Resolutions and Voting: Resolutions 17-19
R ESOLUTION S AN D VOTI NG FOR AGAINST ABSTAIN MILLIONS OF SHARES 17. To authorise the Company to buy its own shares 43.7 0.2 0.1 18. To authorise the Directors to call a general meeting on not less than 43.1 0.9 0.0 14 clear days’ notice 19. To approve the Cranswick 2023 Save As You Earn Plan 44.0
Slide 31: Annual General Meeting July 2023
ANNUAL GENERAL MEETING 24 JULY 2023 AGM_Presentation_2023_v12.indd 30 21/07/2023 12:32