Preliminary Results for the year ended 24 September 2010
2010 Results Highlights Highlights Patrick Coveney, CEO Financial Review Geoff Doherty, CFO Operating Review Patrick Coveney, CEO Outlook Patrick Coveney, CEO Q & A Open to the fmoor 1
Highlights FINANCIAL BUSINESS • Strong Group performance* • Convenience Foods portfolio • Malt, Water and Continental disposals • Operating profjt growth +17.6% completed • Sales growth +6.9% • Convenience Foods now 90% of Group activity • Retained profjt of € 34.5m • Excellent performance in • 32% reduction in net debt to Convenience Foods € 193.4m * on continuing basis 2
Financial Review Geoff Doherty Chief Financial Offjcer 3
2010 Results Highlights Versus FY09 Versus FY09 Revenue Revenue €856.0m €856.0m +6.9% +6.9% Operating profjt* Operating profjt* €59.7m €59.7m +17.6% +17.6% Operating margin* Operating margin* 7.0% 7.0% +63bps +63bps Effective tax rate Effective tax rate 17% 17% +1% +1% €193.4m €193.4m Net debt Net debt -32% -32% Adjusted EPS** Adjusted EPS** 16.7c 16.7c -4.0% -4.0% * before exceptional items and acquisition related amortisation 4 ** before exceptional items, acquisition related amortisation, pension fjnancing, change in the fair value of derivatives and FX effects
Convenience Foods Continuing • Strong sales growth - volume € m FY10 FY09 %Change rather than price led • Strong consumer trends towards Revenue 784.5 708.6 +10.7% ‘ on the go ’ and ‘ at home ’ food Operating consumption 54.1 44.7 +21% profjt* • 63 bps improvement in operating Margin 6.9% 6.3% margin driven by volume, effjciency and productivity gains Discontinued • Water and Continental disposals € m FY10 FY09 %Change completed Revenue 55.3 85.8 -36% • Good exit prices Operating (0.1) 1.7 (loss)/profjt* 5 * before exceptional items and acquisition related amortisation
Malt Discontinued • Malt business disposed for total consideration of up to € 113m € m FY10 FY09 • FY10 refmects six months to date of disposal. FY09 is full year Revenue 90.6 217.1 • Spot malt margins in decline, Operating 8.6 20.5 indicative of malt earnings profjt* returning to lower point of cycle Margin 9.4% 9.4% • Proceeds represented a surplus of € 16.6m over book value * before exceptional items and acquisition related amortisation 6
Ingredients & Property Continuing • Represents a modest part of the € m FY10 FY09 % Group, post Malt Change • Comprises edible oils, molasses Revenue 71.5 92.2 -23% and surplus property trading Operating 5.6 6.1 • Solid performance overall in a profjt* diffjcult domestic Irish market * before exceptional items and acquisition related amortisation 7
Decreasing Finance Costs € m FY10 FY09 Bank interest payable (25.3) (28.3) Unwind discount to present value ( 0.2 ) ( 0.4 ) Finance cost* (25.5) (28.7) Pension (charge)/credit (0.2) 1.2 FX/fair value of derivatives ( 1.8 ) ( 20.4 ) Net fjnance ( 27.5 ) ( 47.9 ) * before fair value and pensions 8
FY11: Signifjcant Decrease Forecast in Interest Payable FY11 Forecast € m • Restructuring of net debt post Bank interest payable 15.5 disposals Commitment fees 2.0 • Settlement of a portion of the Facility fee amortisation 1.5 Group’s fjxed interest swaps for Total cash interest 19.0 € 9.6m Interest Payable ( € m) • Signifjcant reduction in bank 28.3 30 interest payable with 25% 25.3 decrease forecast 25 19.0 • ‘ All in ’ cost of funds over average 20 net debt of c.6.9% 15 10 FY09 FY10 FY11 9
Net Exceptional Gain from Malt, Water & Continental Disposals FY10 exceptionals Profjt/(Loss)* Cash on Earnout/other Total completion Consideration € m Malt disposal 16.6 106.3 7.0 113.3 ( 2.6 ) Water disposal 14.1 3.0 17.1 ( 4.5 ) Continental foods disposal 9.0 3.0 12.0 Net increase in equity/cash 9.5 129.4 13.0 142.4 Recycling of FX* (7.3) - - - Net profjt / cash 2.2 129.4 13.0 142.4 * no impact on equity 10
EPS & Dividend € cent FY10 FY09 • Adjusted EPS down 4% Adjusted EPS 16.7 17.4 • Dilutive impact of Malt in year Dividend per share substantially offset by growth in Interim paid 3.0 3.0 Convenience earnings Final proposed 4.5 4.5 • Continuing adjusted EPS in FY10 7.5 7.5 is 13.3 cent 11
Cashfmow € m Continuing Discontinued Total 80.6 12.5 93.1 EBITDA 24.6 (46.8) (22.2) Working capital movement (21.3) (2.8) (24.1) Net capex 83.9 (37.1) 46.8 Free cashfmow (10.3) - (10.3) Pension defjcit funding (27.9) - (27.9) Interest payments (1.3) (0.9) (2.2) Taxation payments 44.4 (38.0) 6.4 Operating cashfmow Dividends payable (13.2) Disposal proceeds 120.8 Settlement of interest rate swaps (9.6) Purchase of own shares (2.0) Deferred consideration/minority interest payments (2.9) Net cashfmow 99.5 Other movements including FX (9.5) Opening net debt (283.4) Closing net debt (193.4) 12
Summary - Financial Performance • Strong performance in Convenience Foods • Solid Ingredients & Property performance • Increase in operating margin • 32% reduction in net debt • Signifjcant reduction in bank interest costs • Total result for fjnancial year of € 34.5m 13
Operating Review & Outlook Patrick Coveney Chief Executive Offjcer 14
Operating Review 1 Portfolio focused on Convenience Foods Excellent performance across 2 Convenience Foods business - Category growth - Industry capacity tightening - Greencore performance 3 Progress in Greencore USA 15
1 Our Portfolio i rish s ugar 1934 1991 2000 2006 2008 2009 2010 D ecision to e xit s ale of s ale of s ale of s ale of s ugar P rocessing D rummonDs W ater m alt c ont . A FOCUSED Regional Irish Broad based food CONVENIENCE Ingredients and Sugar and agribusiness agribusiness Company company FOODS BUSINESS player 16
Convenience Foods 1 Portfolio - Disposals Malt • A standalone business in need of capital investment • Cyclical earnings ranging from nil to c. € 25m, with highly seasonal working capital demands Impact • Earnings on downward trajectory • Consideration of € 113.3m 1. Focused growth portfolio now Water fjrmly established 2. Earning cyclicality reduced • A beverage business within a Convenience Foods portfolio 3. Strengthened balance sheet • Trading remained challenging despite profjt with net debt reduced by 32% improvement plans • Sold to Highland Spring - a natural owner of this business • Consideration of € 17.1m Continental • An ex-growth market with overcapacity 17
Excellent Performance 2 Across Convenience Foods Business • Consumers driving both volume and value growth Continuing business • Industry capacity tightening • Sales growth +10.7% • Greencore gaining market • Operating profjt growth +21.1% shares and enhancing • Operating margin 6.9% margins • Manageable level of input infmation 18
Consumers Driving 2a Growth Accelerating market growth* Driven by 8.1% • Consumers still demand 7.8% convenience • Increased ‘ at-home ’ and ‘ on-the go ’ 7.5% food consumption • Out-performance by top 5 retailers and ‘ out of town ’ formats • Promotional intensity and ‘ value innovation ’ sustaining volumes - both are here to stay 52wk 24wk 12wk • Food as an affordable treat *Source: Kantar Worldpanel to 03 October 2010 , Nielsen EPOS data & sales estimates Market defjned as sandwiches, salads, sushi, chilled ready meals, quiche, celebration cakes, Christmas cakes, chilled desserts (hot eat), 19 cheesecakes, cooking sauces, pickles and frozen Yorkshire puddings
Industry Capacity 2b Tightening Ready meals market • Large players reshaping landscape • At least six facilities closed Impact • More than 15% of industry capacity removed* 1. Tight credit environment has curtailed capacity additions 2. Recent market growth has absorbed much of the available Food to Go market marginal capacity • Smaller players exiting the market • Four smaller facilities closed and/or deployed • Approximately 5% of industry capacity removed* 20 *Source: Greencore estimate
Greencore Performance 2c - Sales Sandwiches +8.6% • Strong category performance in all core customers • Drove up our share of Sainbury ’ s business by c.10% through category +4.8% expansion and new delivery formats • New business wins including Dunnes Stores (Ireland) and Superdrug • Successful migration of Somerfjeld Stores to Co-op direct to store distribution model Market growth Greencore growth +34.2% Chilled ready meals • Launch of Tesco Restaurant Collection and sustained strong Italian ready meal performance • Asda Traditional, Extra Special and Healthy meals launched, with further Italian business secured +11.4% • Successful integration of Co-op/Somerfjeld Italian business • Now produce 5 of the top 10 Italian ready meals in the market, with our share of the overall ready meal market substantially ahead Market growth Greencore growth 21 *Source: Kantar Worldpanel 52 w/e 03 Ocrober 2010 , Nielsen EPOS data & sales estimates (value growth)
Recommend
More recommend
