Premier Foods plc · LSE:PFD
Premier Foods — H1 2006 Earnings Presentation
30 slides from Premier Foods's earnings presentation, Aug 7, 2006
Slide 1: Premier Foods Interim Results, Half-year ended 1 July 2006
Premier Foods Interim Results Half-year ended 1 July 2006 Monday, 7th August 2006
Slide 2: Robert Schofield, Chief Executive
Robert Schofield Chief Executive
Slide 3: Business Highlights
Business Highlights Healthy sales performance Grocery sales up 20.0% Like-for-like Grocery sales up 3.1% Like-for-like branded sales, ex Cadbury’s up 4.1% Like-for-like own label sales up 0.6% Double-digit sales growth from Meat-Free Announced proposed acquisition of Campbell’s UK for
Slide 4: Financial Highlights
Financial Highlights Solid profit development enhanced by Quorn acquisition Trading profit* up 26.6% at £47.6m Like-for-like trading profit * up 4.6% Like-for-like Grocery trading profit * up 6.7% Fresh Produce stabilised Bury fire insurance claim fully settled Adjusted earnings per sh
Slide 5: Paul Thomas, Finance Director
Paul Thomas Finance Director
Slide 6: Group Turnover
Group Turnover Sales £m 2006 2005 % Convenience Foods, Pickles & Sauces 168.3 168.1 0.1% Meat-Free 57.2 5.3 na Convenience Foods, Pickles, Sauces & 225.5 173.4 30.0% Meat-Free Spreads, Desserts & Beverages 141.0 131.9 6.9% Grocery 366.5 305.3 20.0% Fresh Produce 64.0 58.3 9.8% Continuing operations
Slide 7: Continuing Operating Profit
Continuing Operating Profit Summary Profit & Loss (£m) 2006 2005 % Sales 430.5 363.6 18.4% Cost of sales (327.3) (278.2) 17.6% Gross profit 103.2 85.4 20.8% Selling & Distribution costs (37.0) (31.4) 17.8% Administrative costs excluding amortisation (20.1) (16.6) 21.1% Other income 1.5 1.9 (21.1%) T
Slide 8: Margin Development
Margin Development 2005 H1 Trading profit * margin % 10.3 Commercial development/cost saving programmes 0.4 Quorn and Cauldron 0.4 2006 H1 Trading profit * margin % 11.1 Margin impacted by utilities inflation Acquisitions further enhance margins Margin development in line with target 8 Premier F
Slide 9: Cost Inflation
Cost Inflation Utilities Impact weighted towards heavy users – Convenience Foods Pricing recovery across broader business base Timing of price increases phased through the year Ingredients Potential impact of hot dry weather Mitigated by diversified ingredients base Pricing agreement
Slide 10: Interest Charges
Interest Charges Summary Profit & Loss (£m) 2006 2005 % Net cash interest payable 18.7 14.8 26.4% Amortisation of debt issuance costs 0.6 7.3 Na IFRS – valuation effect (5.5) 2.4 Na Total interest charge 13.8 24.5 Na Increase in cash interest due to acquisitions in 2005 Interest margin reduced b
Slide 11: Normalised Earnings
Normalised Earnings £m 2006 2005 % increase Continuing operations Profit after tax 20.6 9.1 126.4% Exceptional items (0.5) - Na Amortisation 4.2 2.3 82.6% Accelerated amortisation of debt - 6.3 Na issuance costs IFRS valuation adjustments (3.3) 0.7 Na Normalised Profit after tax 21.0 18.4 14.1% Aver
Slide 12: Consolidated Cash Flow
Consolidated Cash Flow Cash Flow £m 2006 2005 Operating Cash Flow – pre Bury 34.0 30.5 Bury fire insurance proceeds 18.3 - Operating Cash Flow 52.3 30.5 Net capital expenditure (13.9) (10.9) Dividends - (22.0) Cash in flow before acquisitions 38.4 (2.4) Non-cash movements (0.6) - Acquisitions * - (2
Slide 13: Robert Schofield, Chief Executive
Robert Schofield Chief Executive
Slide 14: Sales Overview
Sales Overview £m Sales % Convenience Foods, Pickles & Sauces 168.3 0.1% Meat-Free 57.2 - Convenience Foods, Pickles, Sauces & Meat-Free 225.5 30.0% Spreads, Desserts & Beverages 141.0 6.9% Total Grocery 366.5 20.0% Fresh Produce 64.0 9.8% Total 430.5 18.4% Grocery – like-for-like 309.3 3.1% Like-fo
Slide 15: Sales Overview
Sales Overview Reported like-for-like Grocery sales increase of 3.1% Increase includes energy and utility related price increases Like-for-like sales, excluding acquisitions, in line with original 1.5-2.0% target Like-for-like Meat-Free growing at 12.6% Branded sales, excluding Cadbury’s a
Slide 16: Trading Profit Overview
Trading Profit Overview £m Trading % profit Convenience Foods, Pickles & Sauces 7.7 (35.8%) Meat-Free 8.8 - Convenience Foods, Pickles, Sauces & Meat-Free 16.5 32.0% Spreads, Desserts & Beverages 30.7 27.9% Total Grocery 47.2 29.3% Fresh Produce 0.4 (63.6%) Total 47.6 26.6% Group – like-for-like 38.
Slide 17: Convenience Foods, Pickles & Sauces
Convenience Foods, Pickles & Sauces Trading Profit down £4.3m to £7.7m Pickles and Sauces business on track Marketing expenditure behind Branston – brand performing well Own label declines in Soup and Beans Disproportionate effect of energy and utility inflation on Convenience Foods busine
Slide 18: Convenience Foods, Pickles & Sauces
Convenience Foods, Pickles & Sauces Like-for-like sales flat at £168.3m Sales of Branston growing strongly Branston beans retaining 10% market share More TV in second half Branston tomato ketchup and brown sauce successfully launched Sales of Loyd Grossman continue to grow strongly Brand
Slide 19: Meat-Free
Meat-Free Like-for-like sales at £57.2m up 12.6% Trading profit of £8.8m (ahead of expectations) Quorn sales up circa 15% Penetration up to 19.3% from 17.7% in June 2005 Cauldron sales flat Capacity limitations in existing site £11m investment in chilled facility in “Methwold” Remove
Slide 20: Spreads, Desserts & Beverages
Spreads, Desserts & Beverages Sales up 6.9% at £141.0m Trading profit up 27.9% to £30.7m Bird’s synergies starting to flow Own label contract wins Switch of marketing spend to Branston and Quorn in first half Ambrosia sales growing strongly Hartley’s preserves growing strongly Transi
Slide 21: Fresh Produce
Fresh Produce Trading improving in 2006 v H2 2005 Sales up 9.8% to £64.0m due to Gedney’s acquisition Trading profit down £0.7m to £0.4m vs H1 2005 Trading profit up £1.0m against H2 2005 H1 2005 benefited from retail contracts which terminated in that period Cost reduction initiatives i
Slide 22: Portfolio Development
Portfolio Development Sales Growth '06 Sales Growth * % of Drive brands Vs '05 £'m % portfolio Drive 139.1 11.0% 38.0% Core 43.9 (0.8%) 12.0% Classic 19.9 (6.5%) 5.4% Core brands Branded 202.9 6.4% 55.3% Retailer label 141.4 0.6% 38.6% Cadbury's 22.2 (3.5%) 6.1% Total Grocery 366.5 3.4% 100.0% * Bas
Slide 23: Campbell's acquisition
Campbell’s acquisition Excited by acquisition Glove fit with the business £460m price agreed Great brands: Oxo, Batchelors, Homepride Strong synergy potential - £28m Low risk integration Rights issue to fund the acquisition 1:1 Rights priced at £1.85 per share Fully underwritten
Slide 24: Trading Outlook
Trading Outlook Branded sales continue to perform well Tough market: Hot dry weather / cost pressures Strong plans in place for second half Our expectations for the year are unchanged 24 Premier Foods plc 2006 Interim Results – Monday, 7th August 2006
Slide 25: Summary
Summary Healthy sales performance Solid profit development Increase in input costs covered to date Quorn growth ahead of expectations Excited by Campbell’s acquisition Premier strategy on-track 25 Premier Foods plc 2006 Interim Results – Monday, 7th August 2006
Slide 26: Q&A
Premier Foods Q&A
Slide 27: Appendices
Appendices
Slide 28: Consolidated Balance Sheet
Consolidated Balance Sheet Balance Sheet £m 2006 2005 Fixed assets - tangible/other 198.7 189.0 - intangible 425.3 380.8 - total 624.0 569.8 Working capital - stock 83.1 99.8 - debtors/other 108.3 130.3 - creditors/other (224.4) (292.4) - cash 28.8 93.3 - Total 619.8 600.8 Creditors over one year (5
Slide 29: IFRS Valuation effect
IFRS Valuation effect Expense in ‘Other operating expenditure/income’ of £2.2m on forward foreign exchange contracts Relates to forward US$ and Euro purchases to hedge future commodity purchases Half year valuation interest ‘income’ of £5.5m Relates to variable-to-fixed interest rate swaps
Slide 30: Premier Foods Interim Results, Half-year ended 1 July 2006
Premier Foods Interim Results Half-year ended 1 July 2006 Monday, 7th August 2006