Premier Foods plc · LSE:PFD
Premier Foods — Proxy Contest (June 2018)
18 slides from Premier Foods's proxy contest presentation, June 2018
Slide 1: Time For Change
Time For Change Oasis Calls for Premier Foods’ CEO Gavin Darby To Be Removed June 2018 VOTE AGAINST RESOLUTION 5 AT THE AGM ON 18 JULY 2018
Slide 2: Oasis Calls For Premier Foods' CEO Gavin Darby To Be Removed
Oasis Calls For Premier Foods’ CEO Gavin Darby To Be Removed ... • Gavin Darby has driven Premier Foods into its current “zombie-like” state – he has no credible strategy to return Premier Foods to growth. Long suffering shareholders need new energy, leadership and fresh ideas. The status quo is no
Slide 3: Oasis: A Committed Long Term 9.3% Shareholder In Premier Foods
Oasis: A Committed Long Term 9.3% Shareholder In Premier Foods • Oasis has been a significant investor in Premier Foods since 2016 • In our view Premier Foods had an unsatisfactory response to the recent strategic review which was designed to uncover ways of creating shareholder value • We are conce
Slide 4: Significant Shareholder Value Destroyed While He Is Handsomely Overpaid (1)
Significant Shareholder Value Has Been Destroyed Under Gavin Darby’s Leadership While He Is Being Handsomely Overpaid (1) • Premier Foods’ share price is down: ➢ 53% from the March 2014 theoretical ex rights issue price 1 ➢ 39% from the 65p per share March 2016 McCormick bid approach ➢ 34% from Gavi
Slide 5: Significant Shareholder Value Destroyed While He Is Handsomely Overpaid (2)
Significant Shareholder Value Has Been Destroyed Under Gavin Darby’s Leadership While He Is Being Handsomely Overpaid (2) Material Shareholder Value Destruction Over Gavin Darby’s Tenure 1 & 2 140 Premier Foods’ share price is down: 120 • 53% since March 2014 Rights Issue 100 • 39% since McCormick’s
Slide 6: Significant Shareholder Value Destroyed While He Is Handsomely Overpaid (3)
Significant Shareholder Value Has Been Destroyed Under Gavin Darby’s Leadership While He Is Being Handsomely Overpaid (3) Gavin Darby Has Destroyed £239m of Shareholder Value £239m of Equity Value Wiped Out £353m £574m £333m £221m February 2013 ¹ March 2014 TOTAL June 2018 ² Market Cap upon Rights I
Slide 7: Significant Shareholder Value Destroyed While He Is Handsomely Overpaid (4)
Significant Shareholder Value Has Been Destroyed Under Gavin Darby’s Leadership While He Is Being Handsomely Overpaid (4) Significant Valuation Rating No Sellside Analysts Recommend Discount To Peers Buying Premier Foods Y/E March 18A Y/E March 18A P/E EV/EBITDA Sell Hold Buy Societe Generale 18.2x
Slide 8: Poor Financial Performance Under Gavin Darby's Leadership
Poor Financial Performance Under Gavin Darby’s Leadership Trading Profitability Has Declined Leverage Has Increased Post 2014 Capital Restructuring • In his first full year as CEO (pro-forma y/e 5 April 2014) • Proforma net debt/EBITDA post March 2014 rights issue trading profit was c.£140m and 4 ye
Slide 9: 5 Years Of Failure Under Gavin Darby's Leadership
5 Years Of Failure Under Gavin Darby’s Leadership Gavin Darby Has Set & Missed Multiple Targets Over Last 5 Years Including: Premier’s decision under Gavin Darby’s leadership to not proceed with McCormick’s 2016 65p per share bid approach led to him targeting sales growth of between 2-4% – which h
Slide 10: Enough is Enough
Enough is Enough Gavin Darby has shown a track record of excuses to justify various earnings misses: 1 Blaming the weather: “we are disappointed that our Grocery business reported materially lower sales in the quarter due to warmer weather” ¹ 2 And currency effects: “obviously exacerbated by the
Slide 11: Lack Of Growth Due To Under-Investment Under Gavin Darby
Lack Of Growth Due To Under-Investment Under Gavin Darby • The burden of servicing & reducing debt / pension liabilities restricts investment flexibility – whether organically or by strategic M&A to reshape the business in response to changing consumer trends • Selling / marketing (including Adverti
Slide 12: Weak Corporate Governance Under Gavin Darby's Leadership (1)
Weak Corporate Governance Under Gavin Darby’s Leadership (1) • Under Gavin Darby Premier Foods has consistently made poor corporate governance decisions including: (1) 1 Denying shareholders the opportunity to evaluate McCormick’s 2016 65p per share takeover approach ➢ McCormick 65p takeover approac
Slide 13: Weak Corporate Governance Under Gavin Darby's Leadership (2)
Weak Corporate Governance Under Gavin Darby’s Leadership (2) Unhelpful Board Attitude Weak Bid Rejection Rationale “Despite McCormick’s efforts to enter into a meaningful dialogue Premier justified the possible offer rejection by saying 65p was an with Premier Foods on several occasions, the Board o
Slide 14: Vote Against Resolution 5 At The AGM On 18 July 2018
Vote Against Resolution 5 At The AGM On 18 July 2018 Since Gavin Darby Has Been CEO: • Premier Foods Operating Profits: 12% • Premier Foods Net Debt / EBITDA: 0.3x • Premier Foods Share Price: 34% • Premier Foods Relative To FTSE All Share: Underperformed 88% • McCormick 65p Takeover Approach:
Slide 15: Appendix
OASIS Appendix 15
Slide 16: Appendix: Alex Whitehouse Biography
Appendix: Alex Whitehouse Biography Skills & Experience: • Alex joined Premier Foods in July 2014 and is Managing Director of the UK assuming responsibility for both the Grocery and Sweet Treats divisions • Alex has more than 20 years senior international, marketing, sales, strategy, innovation and
Slide 17: Appendix: More On Oasis
Appendix: More On Oasis • Oasis is an international investment manager with an established 16+ years track record of investing globally • Oasis often invests in companies with engagement opportunities to increase stakeholders value • Oasis invested in Premier Foods for its great brands with a great
Slide 18: Important Legal Disclaimer
Important Legal Disclaimer The information and opinions in this document are provided by Oasis Management Company Ltd. (“Oasis”) for informational purposes only and should not be construed as financial, legal, tax, investment, accounting, audit, or any other type of professional advice. This documen