Slide 1: Results for the year ended 30 September 2022
RESULTS For the year ended 30 September 2022
Slide 2: Disclaimer ─ forward looking statements
Disclaimer ─ forward looking statements Certain statements made in this document are, or may be deemed to be, 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 bas
Slide 3: Today's agenda
Today’s agenda Gary Kennedy, Board Chair Welcome & Introduction Dalton Philips, CEO Financial Review Emma Hynes, CFO Initial Perspectives & Outlook Dalton Philips, CEO Dalton Philips, CEO Q&A Emma Hynes, CFO Kevin Moore, Deputy CEO Note: The Group uses Alternative Performance Measures ('APMs') which
Slide 4: Welcome
WELCOME Gary Kennedy, Board Chair
Slide 5: Executive summary
Executive summary Strong improvement in revenue and profitability in FY22 • Our financial momentum has continued to improve through H2 and revenue continues to be above pre-COVID-19 levels • Strong recovery against FY22 input cost and other inflation within the Group’s customer base or other mitigat
Slide 6: Introduction
INTRODUCTION Dalton Philips, CEO
Slide 7: First impressions
First impressions Very excited to be here and encouraged by what I am 1 seeing across our business My positive view of Greencore has been cemented over the last 9 weeks visiting sites, speaking to top 150 leaders and connecting with our customers Our business is resilient, and I am confident that we
Slide 8: Financial Review
FINANCIAL REVIEW Emma Hynes, CFO
Slide 9: FY22 key financial metrics
FY22 key financial metrics Pro Forma Revenue Growth Adjusted Operating Profit Adjusted EPS +29.4% £72.2m 9.2p +£33.2m +5.5p Free Cash Flow ND:EBITDA* ROIC £58.7m 1.5x 8.4% -£13.5m Group Target Range 1.0-1.5x +390bps *As per financing agreements, excluding lease liabilities Note: all comparisons vers
Slide 10: Much improved year on year performance – strong revenue growth and margin progression
Much improved year on year performance – strong revenue growth and margin progression £m unless otherwise stated FY22 FY21 Change Group Revenue 1,739.6 1,324.8 +31.3% Pro Forma Revenue Growth (%) +29.4% +6.2% Adjusted EBITDA 126.9 92.3 +37.5% Adjusted Operating Profit 72.2 39.0 +£33.2m Adjusted Oper
Slide 11: Strong revenue momentum across food to go and convenience categories
Strong revenue momentum across food to go and convenience categories Highlights 1,740 • Strong revenue momentum in both food to go and other convenience categories 1,325 578 483 • Successful execution of inflation recovery Other convenience (£m) within Group customer base driving mid-teen pro forma
Slide 12: Continued progression in operating profit conversion despite challenging environment
Continued progression in operating profit conversion despite challenging environment Operating Profit performance Margin performance £m % 120 10 FY19 110 FY19 100 8 FY19 90 80 FY22 FY22 70 FY19 6 FY21 60 FY22 FY22 50 105.5 FY21 FY21 4 8.2 7.3 FY21 40 72.2 5.7 30 60.8 5.2 55.0 4.2 2 20 38.8 39.0 2.9
Slide 13: Effective recovery of inflation through a challenging environment
Effective recovery of inflation through a challenging environment …but we have continued to recover the FY22 has proved to be an extremely majority of inflation through the Group’s challenging inflationary environment… customer base, with full recovery also supported by internal productivity… Distri
Slide 14: Adjusted EPS growth driven by increased profits
Adjusted EPS growth driven by increased profits Pence 12.0 11.0 0.8 10.0 1.6 0.1 0.3 9.0 0.2 8.0 7.0 6.8 6.0 5.0 9.2 4.0 3.0 2.0 3.7 1.0 0.0 Adjusted Adjusted EBITDA D&A Finance costs Tax Other Shares Adjusted EPS FY21 EPS FY22 14
Slide 15: Positive free cash flow in FY22, as anticipated – with strong conversion
Positive free cash flow in FY22, as anticipated – with strong conversion £m FCF Conversion 140 (12mth) 2.0 46% 120 16.9 13.6 100 14.5 80 11.5 126.9 17.3 3.6 60 40 58.7 20 0 Adjusted Net Working Maintenance Capex Exceptional Interest & Tax Pension Leases Other Free Cash Flow EBITDA Capital Cashflows
Slide 16: Free cash inflow, offset by strategic capex, share buy back and FX drives net debt decrease
Free cash inflow, offset by strategic capex, share buy back and FX drives net debt decrease 0 -20 -40 -60 -80 -183.1 -180.0 -100 -228.0 -120 -242.7 -140 -33.1 58.7 0.0 -160 -11.8 -10.7 -180 -200 -48.0 -59.6 -220 -240 -260 -280 £m Net Debt FY21 Lease Net Debt Free Cash Strategic Equity/ M&A FX/Other
Slide 17: Continued financial resilience through FY22 leverage within Group target range
Continued financial resilience through FY22 leverage delivered within Group FY22 highlights target range Leverage £m • Group deleveraging in FY22 to 1.5x, now 578 ND:EBITDA 600 within Group target range of 1.0-1.5x 1.5x 500 Revolving Credit Facilities • Leverage below FY19 levels 400 Other Bank 300
Slide 18: Strategic capital investment programme
Strategic capital investment programme Multi-year capital Adding c.70 SKUs to our ready Business onboarded, investment of c.£30m across meals and salads offering; commissioning ongoing, with three key sites to onboard expanding meals capacity by focus on volume ramp up new business c.30% 18
Slide 19: Capital management framework
Capital management framework • Ensuring leverage remains within medium term DISCIPLINED ORGANIC INVESTMENT PROGESSIVE VALUE RETURN POLICY leverage target of 1.0-1.5x a priority DISCIPLINED • Delivered on commitment to recommence value INORGANIC return in FY22, with initial £10m share buyback INVESTM
Slide 20: Initial Perspectives
INITIAL PERSPECTIVES Dalton Philips, CEO
Slide 21: Our size and scale enables us to play a unique role in feeding the nation
Our size and scale enables us to play a unique role in feeding the nation We play an active part in We are an essential We support the British feeding the nation partner to our customers economy and food industry 1.2 billion Nationwide availability >£500m Convenience food items produced Broad range
Slide 22: The UK sandwich market has been resilient to macro economic headwinds
The UK sandwich market has been resilient to macro economic headwinds x% Volume CAGR UK CCI1 UK sandwich volumes Quarterly UK Consumer Confidence Index vs volume of sandwiches, Q1 2006 – Q4 2018 6.0% Total Volume CAGR 5.8% 5.8% 5.6% Units CCI Global Financial Crisis Low consumer Post-recession growt
Slide 23: Our markets have grown well and Greencore's recovery has outpaced both
Our markets have grown well and Greencore’s recovery has outpaced both, especially in food to go UK markets, by calendar year, value indexed to 100 in 2019 X% Market CAGR 2022-25 Market value Greencore revenue Food to go +20ppts 123 118 4.6% 100 100 91 90 103 72 68 Grocery retail1 +15ppts 128 121 2.
Slide 24: Strong market performance despite record inflation in sandwiches and ready meals
We have observed strong market performance despite record inflation in sandwiches and ready meals Average quarterly retail price Sandwiches Ready meals UK volume vs average quarterly retail price1, Q3 19-Q3 22 UK volume vs average quarterly retail price2, Q3 19-Q3 ‘22 Units (m) Retail Price (£) Unit
Slide 25: Pre-packaged sandwiches are the go-to out of home lunch option
Pre-packaged sandwiches are the go-to out of home lunch option with a unique value proposition Of consumers aged 18-85 buy Percent of respondents eating ‘out-of-home’ options more than once per week, (%) 57% pre-packaged sandwiches at least once every 2 weeks 82% Pre-packaged sandwiches 23 who eat p
Slide 26: Exposure to outperforming food to go channels and white space
Our business has disproportionate exposure to outperforming food to go channels and white space to go after X% Under market growth X% Above market growth Food to go market by channel 1 CAGR Greencore revenue per channel share of total market 2022-25 share of FY22 TOTAL FOOD TO GO 100% 4.6% 100% QSR
Slide 27: Our performance is supported by distinctive capabilities across the value chain
Our performance is supported by distinctive capabilities across the value chain Products: recognised leader across categories Customers: privileged customer relationships Our products won 5 Grocer new own-label 2 awards 2021-22 We worked with all the UK’s fastest growing grocers in 20221 150 colleag
Slide 28: Our immediate priority is driving core performance to rebuild profitability and cash generation
Our immediate priority is driving core performance to rebuild profitability and cash generation 1 Enhance 2 Recover inflation 3 Simplify portfolio 4 Deliver on Better manufacturing Greencore plan efficiency Enhance efficiency and Continue to engage Proactively manage Deliver on phase 1 of unlock man
Slide 29: Five key areas to build profitability and drive shareholder returns (1/2)
Over time, we will focus on five key areas across our business to further build profitability and drive shareholder returns (1/2) 1 Operational Build on GME1 to deploy a truly world-class operational model: excellence • Optimise asset utilisation driven by effective OEE2 management & efficiency • Im
Slide 30: Five key areas to build profitability and drive shareholder returns (2/2)
Over time, we will focus on five key areas across our business to further build profitability and drive shareholder returns (2/2) 4 Technology Ensure technology supports our future value creation ambitions investment • Simplify and de-risk our technology landscape and reduce complexity across busine
Slide 31: Outlook
Greencore® OUTLOOK Making every day mheYer
Slide 32: Outlook – we have a positive outlook for the years ahead
Outlook – we have a positive outlook for the years ahead FY23 will be a year of further substantial inflation and we are working with our 1 customers on recovery and mitigation 2 Continuing to make decisions on customer contracts Remaining focused on the execution of our Better Greencore change prog
Slide 33: Q&A
Q&A
Slide 34: Appendix: Supplementary financial information
APPENDIX 1 Supplementary financial information
Slide 35: FY22: other financial items
FY22: other financial items Highlights £m FY22 FY21 Net finance costs (12.3) (19.0) • Lower net bank interest payable as debt levels reduced, with lower Tax (before exceptional items) (10.5) (2.5) associated rates Group exceptional items (after tax) (13.5) 12.1 • Effective tax rate 19% (FY21:15%) •
Slide 36: FY22 cashflow
FY22 cashflow £m FY22 FY21 Opening Net Debt (excluding lease liabilities) 183.1 350.5 Adjusted EBITDA 126.9 92.3 Working capital 2.0 33.2 Maintenance capex (16.9) (16.2) Exceptional cashflows (13.6) (3.3) Interest/tax (14.5) (19.0) Pension (11.5) (7.0) Leases (17.3) (14.3) Other 3.6 6.5 Free Cash Fl
Slide 37: FY22 balance sheet highlights
FY22 balance sheet highlights £m FY22 FY21 Net Debt 228.0 242.7 Net Debt (excluding lease liabilities) 180.0 183.1 Net Debt: EBITDA (x)1 1.5 2.0 Pension deficit (net of deferred tax) 10.4 29.3 Average Invested Capital 695.0 728.8 ROIC (%) 8.4 4.5 1 as measured under financing agreements 37
Slide 38: FY23 guidance
FY23 guidance £m FY22 FY23 Depreciation and Amortisation (£54.7m) c.(£55m) Capital Expenditure (£50.0m) c.(£60m) Cash Interest1 (£15.5m) c.(£18m) P&L Interest1 (£11.1m) c.(£20m) Cash Tax £2.2m c.(£6m) Effective Tax Rate 19% c.21% Pension Deficit Contributions & Costs (£15.0m) c.(£15m) 1 on interest
Slide 39: Continued financial resilience through FY22 - leverage within Group target range
Continued financial resilience through FY22 - leverage delivered within Group target range Net Debt Leverage Facilities Pensions FY22 Net Debt FY22 Primary RCF £340m Net Surplus/(Deficit) £180.0m (1) Leverage 1.45% + SONIA Funding Basis (FY21 £183.1m) 1.5x Maturity 2026(4) Irish DB €26.0m Committed
Slide 40: 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 FY22 Adjusted Profit Before Tax Pro Forma Revenue Growth adjusts reported revenue
Slide 41: Definitions of APMs (continued)
Definitions of APMs (continued) Capital Expenditure Net Debt and Net Debt Excluding Lease Liabilities The Group defines Maintenance Capital Expenditure as the expenditure Net Debt comprises current and non–current borrowings less net cash and cash required for the purpose of sustaining the operating
Slide 42: IR Contacts & Calendar
IR CONTACTS & CALENDAR Emma Hynes FY22 Results 29 November 2022 Chief Financial Officer Q1 23 Trading Update 26 January 2023 investor.relations@greencore.com Half Year Period End 31 March 2023 +353 1 605 1000 42
Slide 43: Appendix: Greencore at a glance
APPENDIX 2 Greencore at a glance
Slide 44: Yorkshire puddings
Yorkshire puddings per year Lh. sandwiches and other food to go items each year chilled prepared meals per year eer: across 20 categories 10.600 The world’s largest fresh pre-packaged ine chilled soups sauces per year
Slide 45: Food for now categories, food for later categories, distribution
Food for now categories We operate 11 manufacturing units across seven locations, including eight sandwich units, two sushi focused units and one food for now salad unit. Food for later categories We operate 12 manufacturing units across nine locations, comprising five chilled ready meal units, two
Slide 46: Our business model
Our business model Our inputs Sourcing with Integrity Making with Care Feeding with Pride People We are committed to ensuring that the raw Our Great Food is underpinned by our dedication We design products with taste, freshness, c.14,000 materials we use in the products we supply to to food safety,
Slide 47: Our strategy defines the direction of the Group
Our strategy defines the direction of the Group Growth Our leadership positions in attractive and structurally growing food categories underpin a strategy that combines strong organic growth potential with disciplined strategic investment Relevance Our model of embedded, long term customer partnersh
Slide 48: Our differentiators drive our strategy
Our differentiators drive our strategy People at the Core By embedding a safety culture, providing inspiring leadership and having engaging and effective teams, we ensure that people are at the core of our business Sustainability Sustainability underpins all areas of our business from sourcing with