Greencore Group plc January 2017
Greencore today • Fast-growing, international convenience • Fast-growing, international convenience food leader food leader • Leading UK manufacturer of sandwiches to • Leading UK manufacturer of sandwiches to grocery retailers; complementary positions grocery retailers; complementary positions in other convenience food categories in other convenience food categories • Leading US manufacturer of sandwiches, • Leading US manufacturer of sandwiches, meal kits and salads to CPG, convenience meal kits and salads to CPG, convenience retail and food service leaders retail and food service leaders • Pro-forma Group revenue of £2.3bn • Pro-forma Group revenue of £2.3bn • Headquartered in Ireland, FTSE 250 listed • Headquartered in Ireland, FTSE 250 listed 2
From agribusiness to convenience food Origins & Transition Focus Transformation Broad agribusiness centred around Scale business in both UK and US Irish Sugar; diversification into Focus on food to go in the UK and with significant growth through convenience foods through US achieving growth mainly organic initiatives and M &A, the Hazlewood Foods acquisition in through acquisition, most notably latest being the acquisition of 2001; exit of sugar and malt that of Uniq plc in 2011 Peacock Foods at the end of 2016 between 2008 and 2010 3
Our vision is to be a fast-growing, international convenience food leader Fast-growing... … international... Pro forma FY16 sales* FY16 revenue growth 45% 55% +10.6% +15.3% … convenience food… … leader M arket share UK pre- packed sandwiches* * 40% Others 60% Greencore 4 * Proforma figures for 12 months to end of September 2016; US figures translated using GBP/ USD rate of 1.2577; Peacock Foods consolidated from 30 December 2016 * * Estimated run rate as of 30 September 2016 market share for sandwiches to the UK grocery channel, source: Nielsen Grocery Multiples 4 weeks ended August 2016
Our strategy to win in convenience food Focus on attractive market Focus on attractive market Invest in long-term Invest in long-term Build distinctive Build distinctive positions where we are positions where we are partnerships with leading partnerships with leading capabilities capabilities advantaged advantaged customers customers • Build leading positions in • Build leading positions in • Focus on leading players • Focus on leading players • World-class delivery of • World-class delivery of fast-growing convenience fast-growing convenience in the categories in which in the categories in which food safety and technical food safety and technical food categories food categories we operate we operate excellence through the excellence through the full supply chain full supply chain • Focus particularly on food • Focus particularly on food • Adopt customer centric • Adopt customer centric • Expertise in managing a • Expertise in managing a to go and meal solutions, to go and meal solutions, approach throughout our approach throughout our delivered through delivered through organisation organisation large number of front line large number of front line assembly processes assembly processes colleagues colleagues • Aspire to a long-term • Aspire to a long-term • Support sustainable • Support sustainable • Efficient lean • Efficient lean partnership that allows partnership that allows positions in positions in both sides to invest both sides to invest manufacturing in chilled manufacturing in chilled complementary complementary and frozen supply chains and frozen supply chains • Flexible models to share • Flexible models to share categories categories • Strategic partnerships • Strategic partnerships risk and return risk and return • Win in the UK and US • Win in the UK and US with key suppliers with key suppliers today, and other markets today, and other markets over time over time 5
We work with leading customers in UK and US Convenience Foods US* Convenience Foods UK £1.0bn ($1.2bn) £1.3bn 6 * Proforma figures for 12 months to end of September 2016; US figures translated using GBP/ USD rate of 1.2577; Peacock Foods consolidated from 30 December 2016
We are investing in capacity and capability • Capability • Capacity • HR, leadership development & • New builds talent • Acquisitions • IT and systems • Site investments • Culture & communication • Lean Greencore • Consumer & shopper insight • Distribution network 7
Our strategy is underpinned by the Greencore Way The Greencore Way defines who we are and how we will succeed The Greencore Way defines who we are and how we will succeed 8
US Convenience
Peacock Acquisition: creating a platform for sustained profitable growth and returns in the US Step change in revenues, key categories and manufacturing scale Step change in revenues, key categories and manufacturing scale Increase in exposure to leading brands in fast-growing categories Increase in exposure to leading brands in fast-growing categories Relationships with new customers in complementary channels Relationships with new customers in complementary channels Combined network with 5x current US manufacturing footprint Combined network with 5x current US manufacturing footprint Additional capability in automation, project engineering and Additional capability in automation, project engineering and packaging packaging Greater management depth than ever before Greater management depth than ever before Creates significant shareholder value Creates significant shareholder value 10
Leading market positions in fast-growing convenience food categories % of combined Category M arket revenue 1 growth 2/ 3 position 2 Category Frozen breakfast 1 30% 6% 2 6% 2 sandwiches 1 Kids’ snack meals 13% 6% 2 6% 2 1 Salad kits 13% 16% 2 16% 2 Fresh pre-packaged 13% N/A 8% 3 8% 3 food to go 1 Based on internal management data for the last 12 months to September 2016 11 2 Nielsen data 52 weeks ending 23/ 4/ 16 3 Fresh pre-packaged food to go growth rate based upon combined growth rates of Assembled Sandwiches (Nielsen data 52 weeks ending 27/ 8/ 16), Salads (Nielsen data 52 weeks ending 27/ 8/ 16) and Cold/ Fresh Snacks (CS News 52 weeks ending April 2016)
Strong, long-standing customer partnerships 12 years+ 27 years+ 3 years+ 20 years+ 7 years+ 25 years+ 5 years+ 10 years+ 25 years+ 8 years+ 8 years+ 12
Growth underpinned by supportive industry trends Underlying category growth Changing industry structure Packaged 3% food 1 Packaged 3% food 1 Convenience 5 - 6% food 2 Outsourcing 5 - 7% industry 4 Fresh pre- 8% packaged food to go 3 • Consumer trends: snacking, protein, • Consumer trends: snacking, protein, organic, natural, free-from, on-the-go organic, natural, free-from, on-the-go • CPG leaders outsourcing production to • CPG leaders outsourcing production to • Preference for fresh and chilled formats • Preference for fresh and chilled formats focus on marketing and innovation focus on marketing and innovation • Shift to convenience store formats • Shift to convenience store formats 1 Euromonitor 2015-2020 Estimated CAGR %, 27 October 2016 2 Convenience Food is comprised of the major categories in which the Peacock group competes, Frozen Breakfast Sandwiches and Kids’ Snack Meals, Nielsen data 52 weeks ending 23/ 4/ 16 3 Fresh pre-packaged food to go growth rate based upon combined growth rates of Assembled Sandwiches (Nielsen data 52 weeks ending 27/ 8/ 16), Salads (Nielsen data 52 weeks ending 27/ 8/ 16) 13 and Cold/ Fresh Snacks (CS News 52 weeks ending April 2016) 4 Source: McKinsey 2015-2020 Estimated CAGR %, 2016 report
Combined business has geographic breadth and enhanced network Greencore sites Peacock Foods sites Itasca, IL Romeoville, IL Bolingbrook, IL Carol Stream, IL Frozen & Chilled Ambient Frozen & Chilled Chilled Seattle, WA Geneva, IL Fresh Ambient M inneapolis, M N Quonset, RI Frozen Fresh CHICAGO IL, Anaheim, CA New Headquarters Wilmington, OH Chilled Chilled Salt Lake City, UT Fredericksburg, VA Frozen & Fresh Fresh Chicago, IL J acksonville, FL Fresh Frozen & Fresh • Greencore, Peacock and its customers invest significant capex in the facilities • Greencore, Peacock and its customers invest significant capex in the facilities • Peacock has over 2m sq. ft. of production space versus Greencore at 0.5m sq. ft. • Peacock has over 2m sq. ft. of production space versus Greencore at 0.5m sq. ft. • Available capacity for future growth • Available capacity for future growth 14
Key features of our US financial model • Strong revenue growth underpinned by category growth and contract wins • Profit stability due to pass through contracts • History and culture of efficiency underpinning profitability • Co-investment capital model with customers • Strong cash conversion 15
UK Convenience
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