Greencore Group Plc · LSE:GNC
Greencore — Investor Day (September 2014)
87 slides from Greencore's investor day presentation, Sep 25, 2014
Slide 1: Institutional Investor & Analyst Market Visit
Institutional Investor & Analyst Market Visit Jacksonville, September 25, 2014 1
Slide 2: Introduction and Overview
Introduction and Overview % greencore group
Slide 3: Objectives for Today
OBJECTIVES FOR TODAY • Describe evolution of our business since 2011 • Set out the strategy and performance drivers of our business • Deep-dive into our two specialist Food to Go businesses – representing over half of run-rate revenue • Report against Group financial targets and outline key elements
Slide 4: Agenda
AGENDA Patrick Coveney Presentations on Group Strategy including Alan Williams 08.00 – 10.30 the UK & US Food to Go businesses Chris Kirke Liam McClennon Store visits and transfer to Jacksonville Chris Calitri 10.30 – 12.00 facility Stephen Young Liam McClennon 12.00 – 14.30 Facility visit, lunch an
Slide 5: Greencore's Evolution into a Fast Growing, International Convenience Food Leader
GREENCORE’S EVOLUTION INTO A FAST GROWING, INTERNATIONAL CONVENIENCE FOOD LEADER 1 Refinement of our strategy 2 Strengthening of our organisation 3 Sustained delivery against our financial metrics 5
Slide 6: We Have Refined Our Strategy to Focus on Deepening Our Leadership in Food to Go
WE HAVE REFINED OUR STRATEGY TO FOCUS ON DEEPENING 1 OUR LEADERSHIP IN FOOD TO GO IN THE UK AND US Where we were in 2011 Where we are now • A focused growing convenience food • A refined strategy focused on deepening business leadership in Food to Go • Strong UK business with good organic • UK busin
Slide 7: Refined Strategy Underpinned by Category, Geographic and Channel Choices
THIS REFINED STRATEGY IS UNDERPINNED BY SPECIFIC CATEGORY, 1 GEOGRAPHIC AND CHANNEL CHOICES • Deepen food to go leadership – in share, growth capability and economic delivery • Supplement food to go proposition with complementary, market leading positions in other categories • Build distinctive, end
Slide 8: Strategic Delivery Has Created a Focused, Growing Food to Go Leader
STRATEGIC DELIVERY HAS CREATED A FOCUSED, GROWING 1 FOOD TO GO LEADER • FY13 Group revenue of £1.2bn • FY14 YTD LFL Convenience Foods growth of 9.3% UK UK UK US Ingredients Prepared Food to Go Grocery Food to Go & Property Meals c. % of run rate 40% 20% 20% 15% 5% revenue* Food to Go long term focus
Slide 9: Our UK Business Is Focused on the Highest Growth Categories Within Food
OUR UK BUSINESS IS FOCUSED ON THE HIGHEST GROWTH 1 CATEGORIES WITHIN FOOD Estimated market size (excluding Estimated market growth beverages), £bn 2013 Sandwiches 6 +10% High growth categories Out-of- 15 +5% home/FtG Other out-of- home 65 +0.3% consumption Rest of food 150 -1.3% 1 Based on channel g
Slide 10: Growth Underpinned by Rapid Expansion in the Convenience Channel
THIS GROWTH IS UNDERPINNED BY A RAPID EXPANSION IN 1 THE CONVENIENCE CHANNEL… Physical formats for leading grocers CAGR CAGR Number of stores CAGR 2013 -2017 2009 -2013 12,589 2011–13, % 371 9% 1% 10,322 355 4,833 2% 3% 8,255 Hypermarkets 252 4,379 Supermarkets 4,055 9% 7% 7,385 5,588 Convenience 3,
Slide 11: Underlying Consumer Trends That Support Growth in Our Categories
...AND BY UNDERLYING CONSUMER TRENDS THAT SUPPORT 1 GROWTH IN OUR CATEGORIES 1 Good value for money Affordable indulgence 2 3 Convenient to eat/snack Fresh and healthy 4 11
Slide 12: We Have Reshaped Our US Strategy in the Last 3 Years
1 WE HAVE RESHAPED OUR US STRATEGY IN THE LAST 3 YEARS 2008 2010 2012 - 2014 Entry into the Emergence of Focused, scaled-up US Market Food to Go Food to Go business • Acquisition of Home • Acquisitions of MarketFare Foods, • Acquisition of On A Made Brand Foods Roll HC Schau & Lettieri’s Key Event •
Slide 13: The Economics of Our Food to Go Business Support Our Refined Strategy
THE ECONOMICS OF OUR FOOD TO GO BUSINESS SUPPORT 1 OUR REFINED STRATEGY Revenue Growth - UK Food to Go Revenue Growth - US Food to Go 17.2% 64.3% 58.0% 9.8% 6.9% 22.5% 25.2% 4.4% FY11 FY12 FY13 H1 FY14 FY11 FY12 FY13 H1 FY14 1 Continued strong growth in the UK and a platform to materially grow our U
Slide 14: Strengthening Our Organisation – The Greencore Way
STRENGTHENING OUR ORGANISATION 2 – THE GREENCORE WAY Who we are How we will succeed 14
Slide 15: The Greencore Way – Principles & Stakeholders
THE GREENCORE WAY 2 – PRINCIPLES & STAKEHOLDERS 15
Slide 16: Investments in Capability to Underpin Strategy & Growth
INVESTMENTS IN CAPABILITY TO UNDERPIN 2 STRATEGY & GROWTH Large scale facility Process excellence People enhancement • Northampton • Food safety • Executive Board • Kiveton • Lean • Divisional leadership teams • Rhode Island • Consumer insight • Talent • Jacksonville • Customer partnering • Incentiv
Slide 17: Our Group Executive Board Executes Our Strategy
2 OUR GROUP EXECUTIVE BOARD EXECUTES OUR STRATEGY Patrick Coveney CEO Greencore Group Chris Kirke Liam McClennon Kevin Moore Eoin Tonge Phil Taylor Alan Williams Tim Dornan MD CEO MD MD Group CFO CSO Greencore Greencore Greencore Greencore HR Director Greencore Greencore Food to Go USA Prepared Meal
Slide 18: Sustained Delivery Against Our Financial Metrics
3 SUSTAINED DELIVERY AGAINST OUR FINANCIAL METRICS Key Metrics Recent Performance • Ahead of market through new customer wins and Strong LFL growth enhancing share in existing customers Margin • Delivered through leveraging scale and recovery of enhancement input cost inflation • Achieved through ca
Slide 19: Greencore's Evolution into a Fast Growing, International Convenience Food Leader
GREENCORE’S EVOLUTION INTO A FAST GROWING, INTERNATIONAL CONVENIENCE FOOD LEADER 1 Refinement of our strategy 2 Strengthening of our organisation 3 Sustained delivery against our financial metrics 19
Slide 20: Greencore Food to Go
Greencore Food to Go w greencore group
Slide 21: Context & Objectives
CONTEXT & OBJECTIVES • Overview of our UK Food to Go business • Overview of the UK food to go market • Future prospects and opportunities 21
Slide 22: Context & Objectives
CONTEXT & OBJECTIVES • Overview of our UK Food to Go business • Overview of the UK food to go market • Future prospects and opportunities 22
Slide 23: Business Overview
BUSINESS OVERVIEW • UK’s largest food on the move provider and Greencore’s biggest category • Broad range of customers with bespoke own label products • Delivers tailor-made ranges direct to nationwide stores daily • Strong annual growth in a vibrant and fast-moving sector • Drive to grow in all are
Slide 24: Evolution of Our UK Food to Go Business
EVOLUTION OF OUR UK FOOD TO GO BUSINESS New factory Worksop Acquisition of Acquired Sole Supply Opened in Site expands Breadwinner By Acquisition M&S Triangle Worksop Chesterfield Factory at Park Greencore Of Sushi San Sandwiches closes Royal Millstore Became Worksop Acquisition Acquisition Sandwich
Slide 25: Overview of Our Business
OVERVIEW OF OUR BUSINESS • Manufactures sandwiches, wraps, baguettes, sushi, side of plate salads, pasta salads • Six facilities (Manton Wood, Park Royal, Spalding, Overview Bow, Crosby, Northampton) • Radial distribution business servicing 7,500 outlets 6 days a week • Grocery retailers: M&S, Morri
Slide 26: Market Share and Position in Food to Go
MARKET SHARE AND POSITION IN FOOD TO GO Market Market Market Size Share Position Sandwiches £1.1bn 37% #1 Sushi £70m 21% #3 Food to Go salads £0.2bn 12% #4 Side of Plate salads £0.3bn 22% #2 Source: Estimated Nielsen 52 w/e 29 March 2014 and Greencore sales estimation 26
Slide 27: Food to Go Organisational Structure
FOOD TO GO ORGANISATIONAL STRUCTURE Chris Kirke Category Managing Director Steve Evans Paul Humphrey Steve Andrews Clare Rees Andy Thompson Alison Hayward Phil Lovell Managing Finance Business Managing Purchasing H.R. Director Managing Director Director Transformation Director Director Director M&S
Slide 28: Overview of Facilities
OVERVIEW OF FACILITIES Our manufacturing facilities Our distribution facilities A national depot network delivering 120m units annually to 7,500 outlets Crosby Northampton Spalding Worksop Bow Park Royal 28
Slide 29: Broad Multi-Site Capabilities
BROAD MULTI-SITE CAPABILITIES Sandwiches Salads Sushi Manton Wood Park Royal Northampton Bow Spalding Crosby • High Volume • Specialist • Side of plate • Hand • High Volume sandwiches & wraps sandwiches & ready to assembled • Lieder lines eat Salads Sushi • Lieder lines • Wraps • Fully & semi- • May
Slide 30: Business Overview - Summary
BUSINESS OVERVIEW - SUMMARY • Strong experienced team • Channel focused structure • Good breadth of customers and product types • Well invested highly efficient facilities • Unique distribution model with nationwide coverage • True contingency due to multi site manufacturing footprint Well positione
Slide 31: Context & Objectives
CONTEXT & OBJECTIVES • Overview of our UK Food to Go business • Overview of the UK food to go market • Future prospects and opportunities 31
Slide 32: Definition of the Food to Go Market
DEFINITION OF THE FOOD TO GO MARKET All Food Purchase Occasions In home consumption Out of home consumption Food for Later Food for Now Typically food bought in shops, taken home and stored for a period, and prepared or consumed at a later time Take Away Eat In Food to Go Typically food bought in sh
Slide 33: The UK Food to Go Market Incorporates Multiple Channels
THE UK FOOD TO GO MARKET INCORPORATES MULTIPLE CHANNELS • The UK market is large, highly developed, multi-channel and growing • The UK food to go market incorporates food purchased and consumed out of home where there is an option to take-away – this is worth around £20 billion • Estimated growth c.
Slide 34: Significant UK Food to Go Market Offering Vast Choice
SIGNIFICANT UK FOOD TO GO MARKET OFFERING VAST CHOICE FOR CONSUMERS AND SCOPE FOR GREENCORE TO GROW Bakery & Specialists Multiples & high £1.1bn street: £1.2bn Other Foodservice Schools & Education Convenience The Food to Go £0.8bn Hospitals ‘Universe’ Values are for Sandwiches only Travel & Tourism
Slide 35: Changes in the UK Retail Environment Creating New Opportunities
CHANGES IN THE UK RETAIL ENVIRONMENT ARE CREATING NEW OPPORTUNITIES FOR GREENCORE • Declining footfall in large superstores due to growth of on-line & convenience • Increasing importance of location & accessibility • Growth of smaller format convenience stores • Blurring of channel lines as consumer
Slide 36: Market Growth
MARKET GROWTH Value Value Packs Pack Growth % Growth % Latest year £1.4bn 9.9% 721m 6.1% Food to Go Latest 12 weeks £0.4bn 8.8% 190m 6.1% Latest year £1.1bn 10.8% 594m 6.5% Sandwiches Latest 12 weeks £0.3bn 8.3% 151m 5.1% Food to Go Latest year £189m 2.0% 88m -0.9% Salads Latest 12 weeks £58m 8.3% 2
Slide 37: UK Consumers Love Food to Go
UK CONSUMERS LOVE FOOD TO GO – REGULARLY BUYING INTO THE CATEGORY & PURCHASING ACROSS MULTIPLE PRODUCT SECTORS % buying based on UK FTG consumers who purchase FTG at least once per month… 100% Regularly • Over ⅓ of UK consumers buy FTG at least once per month, 37% of whom buy several times per week
Slide 38: Food to Go Market - Summary
FOOD TO GO MARKET - SUMMARY • Continuing to see good growth due to: • Increasing levels of consumer participation • Significant growth in store numbers especially around convenience formats • Trading up into higher price point products • Expanded offer and ranges • Attractive ‘Meal Deals’ 38
Slide 39: Context & Objectives
CONTEXT & OBJECTIVES • Overview of our UK Food to Go business • Overview of the UK food to go market • Future prospects and opportunities 39
Slide 40: Food to Go and Sandwiches Will Continue to Outperform the UK Grocery Market
FOOD TO GO AND SANDWICHES WILL CONTINUE TO OUTPERFORM THE UK GROCERY MARKET Sales value of sandwiches in grocery multiples £m • Macro trends driving growth: 1600 • Drive for convenience • Snacking 1400 • Out of home eating 1200 +10.8% • Stabilising household +4.9% finances 1000 • On-going ‘trade-up’
Slide 41: Further Market Growth Stimulated by Expansion in Eating Occasions
FURTHER MARKET GROWTH WILL BE STIMULATED BY AN EXPANSION IN EATING OCCASIONS AND OPPORTUNITIES Growth of hot • Hot food accounts for 6 of the top 21 product food categories in UK consumers’ FTG repertoire* • There are now over 16,000 coffee shops & cafes in Coffee shop the UK with a turnover in exce
Slide 42: Core Values Will Continue to Give Greencore a Significant Competitive Edge
DELIVERY OF OUR CORE VALUES WILL CONTINUE TO GIVE GREENCORE A SIGNIFICANT COMPETITIVE EDGE Technical Integrity • Category-leading standards Quality • Working closely with our Competitive Costs customers to deliver consistently high quality • Well invested standards manufacturing facilities • Signifi
Slide 43: Overview of Northampton Expansion
OVERVIEW OF NORTHAMPTON EXPANSION • c.300 new jobs will be created • £30m investment from FY14 – FY16 to facilitate a significant new business award • Underpins specific future growth opportunities with the Northampton facility customer • First phase of new products confirmed for launch in late Q4 F
Slide 44: Timeline for Northampton Expansion
TIMELINE FOR NORTHAMPTON EXPANSION Process Comment • Sign off principles of design September 2014 Agree Design Planning Application • Submitted September 2014 • Clearance of adjacent site October-January Demolition & Design 2015 • Detailed design work new build October- December Planning Approva
Slide 45: Northampton Site Layout
NORTHAMPTON SITE LAYOUT Adjacent site Existing site Unit D Unit A Unit B Unit C Car Park& and Car Park Development Centre development centre 45
Slide 46: Phase 2 – Unit B Extension
PHASE 2 – UNIT B EXTENSION • Extra capability incorporating two high speed sandwich lines 46
Slide 47: Phase 3 – Brand New Factory of the Future
PHASE 3 – BRAND NEW FACTORY OF THE FUTURE • c.£30m investment and 300 new jobs created in Northampton • Sustainably built with the latest technology 47
Slide 48: Putting All This Together – Economic Model
PUTTING ALL THIS TOGETHER – ECONOMIC MODEL 1 Continued strong growth in the UK food to go market 2 Move to longer term, multi-year supply arrangements Ability to add value beyond food through distribution solutions, 3 category management and manufacturing asset alignment 4 Ongoing development of foo
Slide 49: Summary
SUMMARY • UK’s largest food to go provider • Well placed to benefit from future growth across multiple formats and product platforms • Industry leading facilities with further capacity coming on stream • At the core of future retailing and shopper trends and behaviours 49
Slide 50: Greencore USA
Greencore USA 50
Slide 51: Context & Objectives
CONTEXT & OBJECTIVES • Overview of our US business • Overview of the US food to go market • Future prospects and opportunities 51
Slide 52: Context & Objectives
CONTEXT & OBJECTIVES • Overview of our US business • Overview of the US food to go market • Future prospects and opportunities 52
Slide 53: Evolution of Our US Business
EVOLUTION OF OUR US BUSINESS 1 2 3 4 5 Entry into Emergence Focus on Expansion of Scale up of the US of Food to Food to Go Food to Go US Market Go 2008 2010 2012 2014 Acquired Expansion in MarketFare Jacksonville Acquired and Schau Acquired Acquired Further Home Made business wins On A Roll Gained k
Slide 54: Our Strategy Has Been Shaped by Key Learnings
OUR STRATEGY HAS BEEN SHAPED BY KEY LEARNINGS Phase Key Learnings 1 Entry into • Attractiveness of US market the US • US environment - technical standards, market dynamics and Market supply chain 2 Emergence • Attractiveness of food to go of food to go • Differing channel dynamics 3 Focus on • Benef
Slide 55: We Have Become a Focused, Channel Specific Business
WE HAVE BECOME A FOCUSED, CHANNEL SPECIFIC BUSINESS • Leading supplier in the North East, East Coast and Mid-West Overview • Chilled food manufacturer complemented by frozen capability for hot eating • National convenience and coffee shop customers - c.80% of revenue Customers • Regional grocery cus
Slide 56: We Have a Wide Geographic Footprint
WE HAVE A WIDE GEOGRAPHIC FOOTPRINT MINNEAPOLIS, MN Employees: 220 NEWBURYPORT, MA Products: Wrap dogs, Hot Employees: 250 handheld, Breakfast Products: Food to go Deli, BROCKTON, MA Salads, Entrées Employees: 225 Products: Food to go, Entrées DANVERS, MA CHICAGO, IL Greencore USA HQ Employees: 325
Slide 57: Using Both Fresh and Frozen Solutions in the US Market
WE ARE USING BOTH FRESH AND FROZEN SOLUTIONS TO EXECUTE IN THE US MARKET Fresh solution Frozen solution • Daily deliveries to customers • Suitable for certain food to go products • Pick products to store level • Manufactured frozen and sold fresh at • Short lead time for perishable the point of purc
Slide 58: Context & Objectives
CONTEXT & OBJECTIVES • Overview of our US business • Overview of the US food to go market • Future prospects and opportunities 58
Slide 59: The US Food to Go Market Is Growing
THE US FOOD TO GO MARKET IS GROWING FTG market size by category FTG growth by category Snacks & side dishes Prepared Salads 3% $2bn Fresh Cut Chilled Snacks & Side Fruit $5bn Entrees, 4% Dishes $12bn Sandwich Fresh Cut Fruits 3% $6bn Prepared Sandwiches 5% Salads $11bn Chilled Entrees 5% Total Marke
Slide 60: Broader Consumer Trends Are Positive for Our Business
BROADER CONSUMER TRENDS ARE POSITIVE FOR OUR BUSINESS Convenience Local Fresh Artisan Healthy Consumers will Locally- More “Fresh” menu US consumers will Government and seek more produced foods items will be seek out unique consumers are convenient are increasingly introduced to cater and higher qua
Slide 61: Convenience and Smaller Stores Are Growing and Focused on FTG
CONVENIENCE AND SMALLER STORES ARE GROWING AND FOCUSED ON FTG… • Drive sales through Food is a key accompaniments to beverages growth • Replace declining tobacco sales opportunity • Ambitious growth targets • Good coffee is more common Food could be the key differentiator • Seek to differentiate thr
Slide 62: We Can Help Our Customers Deliver on Their Key Priorities
…AND WE CAN HELP OUR CUSTOMERS DELIVER ON THEIR KEY PRIORITIES Investing in the Importance of Increasing their offer supply chain product quality Improving the hot Managing shrink Ease of execution offer 62
Slide 63: What Does It Take to Win in US Food to Go?
WHAT DOES IT TAKE TO WIN IN US FOOD TO GO? Insight & NPD Operational Effectiveness Food Safety & Technical Standards 63
Slide 64: Context & Objectives
CONTEXT & OBJECTIVES • Overview of our US business • Overview of the US food to go market • Future prospects and opportunities 64
Slide 65: Significant Steps in FY14 to Support Longer Term Strategic Agenda
WE HAVE TAKEN SIGNIFICANT STEPS IN FY14 TO SUPPORT OUR LONGER TERM STRATEGIC AGENDA 1 2 Strengthening our US team Broadening our FTG offering Recruiting & developing resources Acquisition of Lettieri’s 3 4 Building frozen capability Upgrading manufacturing capability Investment in Jacksonville Build
Slide 66: We Have Built a Strong, Experienced Team
1 WE HAVE BUILT A STRONG, EXPERIENCED TEAM Liam McClennon CEO, Greencore USA Brek Peterson Rene Ouimet Chris Calitri Nora McCarthy Andy Hearns Joe Orolin Tim Adler Finance Business Sales & HR Technical Operations Purchasing Transformation Marketing & NPD & Supply chain 66
Slide 67: Lettieri's Adds to Our Food to Go Offering
LETTIERI’S ADDS TO OUR FOOD TO GO OFFERING AND FITS 2 WITH OUR LONG TERM US STRATEGY • A leading manufacturer of frozen food to go Newburyport & Minneapolis, MN Brockton, MA products for convenience store channel Salt Lake City, UT • A modern purpose built facility in Minneapolis Chicago, IL with hi
Slide 68: Investment in Jacksonville Gives Us Frozen Capability
OUR INVESTMENT IN JACKSONVILLE GIVES US FROZEN CAPABILITY 3 AND OUR FIRST TRULY SCALE SITE • $10m investment in state of the art frozen food to go capabilities in Jacksonville Minneapolis, MN Newburyport & • Capacity to support more than $100m of Brockton, MA Salt Lake City, UT revenue with focus on
Slide 69: Building a New Manufacturing Facility in Rhode Island
WE ARE BUILDING A NEW MANUFACTURING FACILITY IN 4 RHODE ISLAND • Focus on improving our North East manufacturing footprint • Key imperatives: • Consolidate in one location • Create capacity for future growth • Comprehensive analysis undertaken • Greenfield site was the preferred solution • Sustainab
Slide 70: Site Strategically Located to Give Access to Two Key Markets
THE SITE IS STRATEGICALLY LOCATED TO GIVE ACCESS TO 4 TWO KEY MARKETS • Strategic location in Quonset, Rhode Island New England & New York state • Existing markets in New England ME • Develop future opportunities closer to New York VT • Investment of c.$35m in 100,000 NH Newburyport & Brockton, MA s
Slide 71: Construction in Rhode Island Is on Track
4 CONSTRUCTION IN RHODE ISLAND IS ON TRACK Construction process Progress update Phase 1: • Ground broken in June 2014 Site analysis • Construction is progressing well and is on track Phase 2: Preliminary design • Foundations prepared and building frame has been Phase 3: erected Detailed design • Key
Slide 72: Our Strategy Will Drive All Future Investment Decisions in the US
OUR STRATEGY WILL DRIVE ALL FUTURE INVESTMENT DECISIONS IN THE US Strategy Future developments Develop US market-specific consumer propositions Continue to build customer focused capability Focus on small store channels Balance of focused M&A and organic growth Build manufacturing scale and capabili
Slide 73: Financial Update
Financial Update 73
Slide 74: Objectives
OBJECTIVES 1 Reminder of YTD FY14 performance 2 Report against financial performance targets set in March 2012 Financial implications of the food to go led strategy 3 and updated financial goals 74
Slide 75: YTD FY14 Performance
YTD FY14 PERFORMANCE FY14 Convenience Foods LFL revenue growth* • Convenience Foods like for like 10.1% revenue* growth of 9.3% YTD 9.3% 9.3% • UK revenue growth considerably 8.7% ahead of chilled convenience food market • US LFL revenue growth YTD of 16.9% Q1 Q2 Q3 YTD • 14.9% operating profit grow
Slide 76: Reminder of Our Business Performance Goals
REMINDER OF OUR BUSINESS PERFORMANCE GOALS • UK Chilled Convenience Foods will continue to grow Revenue* ahead of overall UK Food - LFL growth of > 5% • Increasing exposure to fast growing US Convenience Channel fresh food offer • Maintain gross margin in UK and seek to absorb indirect Operating pro
Slide 77: Performance Against Our Goals: Revenue
PERFORMANCE AGAINST OUR GOALS 1 Revenue* LFL growth of > 5% Convenience Foods Revenue £m LFL LFL YTD +0.6% +9.3% 1,091 1,129 LFL +7.4% 732 FY11 FY12 FY13 FY14 *Convenience Foods division 77
Slide 78: Performance Against Our Goals: Operating Profit
PERFORMANCE AGAINST OUR GOALS Operating 2 Profit * Margin of > 6% Convenience Foods Operating Profit (£m) & Margin H1 14 6.5% operating 6.3% profit +14.9% 73.9 and margin 69.1 +30bps 5.3% 49.3 FY11 FY12 FY13 *Convenience Foods Operating Profit and margin before exceptional items and acquisition rela
Slide 79: Performance Against Our Goals: Interest, Tax and Cashflow
PERFORMANCE AGAINST OUR GOALS 3 Interest & Tax Continued Reduction • Bank interest lower due to reduction in net debt despite acquisition activity and capital investment • Low single digit ETR and minimal cash tax principally due to Uniq tax attributes Operating Cashflow Substantial improvement in f
Slide 80: Performance Against Our Goals: Leverage
PERFORMANCE AGAINST OUR GOALS 5 Targeted reduction in net debt/EBITDA leverage to 2.0 – 2.5 times 2.8x 2.9x 2.3x £252.5m £258.0m £232.8m FY11* FY12 FY13 On track to achieve further reduction in leverage in FY14 *FY11 Net Debt shown on a pro-forma basis – adjusted to reflect consideration paid for Un
Slide 81: Performance Against Our Goals: ROIC
PERFORMANCE AGAINST OUR GOALS 6 ROIC Return > 12% ROIC 12.9% 11.9% 10.7% +100 bps +120 bps FY11 FY12 FY13 ROIC increase despite investments in capital and M&A activity 81
Slide 82: Food to Go Led Strategy – Financial Perspective
FOOD TO GO LED STRATEGY – FINANCIAL PERSPECTIVE Revenue Growth - UK Food to Go Revenue Growth - US Food to Go 17.2% 64.3% 58.0% 9.8% 6.9% 22.5% 25.2% 4.4% FY11 FY12 FY13 H1 FY14 FY11 FY12 FY13 H1 FY14 1 Continued strong growth in the UK and a platform to materially grow our US business leading to st
Slide 83: Implications of Food to Go Led Strategy - Capital
IMPLICATIONS OF OUR FOOD TO GO LED STRATEGY - CAPITAL • Increased focus on growth capex to fund customer initiatives • Northampton Capital • Jacksonville • Quonset • Supplemented by selective M&A activity • Working capital neutral • Expect to be cash tax paying by FY17 - Income Statement effective t
Slide 84: Implications of Food to Go Led Strategy - Financing
IMPLICATIONS OF OUR FOOD TO GO LED STRATEGY - FINANCING • Business remains highly cash generative • Potential modest increase in net debt in near term • Underlying leverage will continue to Financing decline • Existing committed facilities of £490m sufficient • Primary bank facility to be renewed in
Slide 85: Financial Goals
FINANCIAL GOALS Key Metrics Goal Rationale • Food to Go market unit volume growth in UK Revenue 5% LFL and US • Underpinned by customer specific initiatives Operating Maintain • Sustain UK margin • Bring US to UK operating margin level above 6% Margin • Reinvest behind customer growth initiatives •
Slide 86: Summary Q&A
SUMMARY Today we have: • Described evolution of our business since 2011 • Set out the strategy and performance drivers of our business • Provided a deep dive into our two Food to Go businesses • Reported against the financial goals set in March 2012 • Outlined key elements of our financial strategy
Slide 87: Greencore
greencore bringing convenience to good food