Premier Foods Worksop site visit 19 th June 2014 CAUTIONARY - PowerPoint PPT Presentation

Premier Foods Worksop site visit 19 th June 2014

CAUTIONARY STATEMENT Certain statements in this presentation are forward looking statements. By their nature, forward looking statements involve a number of risks, uncertainties or assumptions that could cause actual results or events to differ materially from those expressed or implied by those statements. Forward looking statements regarding past trends or activities should not be taken as representation that such trends or activities will continue in the future. Accordingly, undue reliance should not be placed on forward looking statements. 2

1 5 2 3 4 AGENDA FOR TODA Y Time Activity Who 08:45 Arrival & Introductions All Gavin Darby, Chief Executive Officer 09:00 Why have we invited you here today? 09:10 Cost reduction programmes Alastair Murray, Chief Financial Officer Brian Leach, Operations Director 09:40 Innovation at Premier Foods Helen Warren-Piper, Business Unit Director, Savoury John Petre, Technical & Innovation Director 10:10 Q&A All 10:40 Development & Innovation centre tour John Petre, Technical & Innovation Director 12:00 Show & Tell lunch All 12:30 Worksop factory overview Karl Smith, Factory General Manager 12:45 Factory tour All 15:30 Final Q&A All 15:45 Close & depart All

Gavin Darby 1 Chief Executive Officer

1 2 3 4 TODA Y’S OBJECTIVES Demonstrate how we can drive future category growth through: 1 – Delivering innovative new products to market – Our breadth of process & packaging capabilities 2 Recent cost reduction activity 3 Illustrate the scale and flexibility of our manufacturing facilities 4 Provide opportunity to meet some senior management 5 To demonstrate confidence in our medium term strategy 5

1 2 3 4 CATEGORY FOCUSED GROWTH STRATEGY Designed to drive value growth DRIVING CATEGORY GROWTH CONSUMERS CUSTOMERS Capitalise on UK specific Maximise mutual value Category insights to from customer BRANDS identify growth partnerships Drive Category opportunities building innovation with pace COSTS PEOPLE Aggressive focus on efficiency & Build structure, effectiveness to fund capabilities & culture to growth investments support Category focus SUSTAINABILITY Drive sustainability in everything we do 6

1 2 3 4 OUR INVESTMENT PROPOSITION  Focused on growth categories  Broad stable of leading brands driving category growth through marketing and innovation  Diverse manufacturing processes provide wide scope to innovate  Strong capabilities to serve today’s multi -format retail environment  Continued cost reduction supports brand investment  Strong operational cash flows  Committed and experienced management team

Alastair Murray, Chief Financial Officer 2 Brian Leach, Operations Director

1 2 3 4 MANUFACTURING CAPABILITIES & COST REDUCTION PROGRAMMES 1 Knighton joint venture 2 Grocery supply chain infrastructure 3 Technologies & capabilities 4 Key performance indicators 5 Simplifying our business 6 Investing for growth and efficiency 9

1 2 3 4 KNIGHTON JOINT VENTURE – OVERVIEW  A ‘Dry Powders’ site  Strong capabilities: – Spray drying – Agglomeration – Blending – Instantisation  Significant capacity availability  Home to support brands and non- branded products  Prohibitive closure costs  Joint venture decided as optimal solution 10

1 2 3 4 KNIGHTON JOINT VENTURE – WHAT THIS SOLUTION BRINGS  Joint expertise with Specialty Powders to drive future growth I  Increases Group’s branded focus I  Good news for 200 skilled employees I  Improved efficiencies for Ashford site I  Increased utilisation at Knighton I  2014 EBITDA impact positive  Cash restructuring costs in 2014 c.£4m, capex c.£1m (guidance unchanged)  Assets entering JV c.£15m  Transaction expected to complete end June 11

1 2 3 4 GROCERY SUPPLY CHAIN INFRASTRUCTURE - MANUFACTURING 9 Manufacturing sites delivering: 385,000 : Tonnes 1.1m : Pallets CARLTON MORETON WORKSOP CHARNWOOD STOKE ASHFORD KNIGHTON ANDOVER LIFTON 12

1 2 3 4 GROCERY SUPPLY CHAIN INFRASTRUCTURE - DISTRIBUTION CORBY (3 rd Party) GREAT BEAR (3 rd Party) • Northern RDC • Southern RDC • 35,000 PALS • 29,000 PALS • 24/7 Operation • 24/7 Operation • RUGBY (CAKE NDC) Transition from NDC to 2 RDC solution • Drives improved customer service • Significant reduction in food miles • Cake Warehouse • Central Logistics • 6,000 PALS • Customer Service • 50% Case Picks Volume • Central Planning 13

1 2 3 4 TRANSFORMING OUR SERVICE OFFERING Service Offering (2012) Revised Service Offering • Day 1 for day 2 delivery • Day 1 for day 3 delivery • 7 day ordering & deliveries • 5 day ordering • Shared resource with top 5 customers and • Fixed minimum order quantities developing VMI • Internally focussed on our dispatch measure • Variable minimum order quantities • Focussed on customer OTIF and on shelf availability Customer Recent Feedback/Current Positions Tesco “Walking the walk on transforming service” Sainsbury Step-change improvement in benchmark score Asda No. 2 YTD in their grocery service league table Morrisons “Chalk & cheese to the supplier you used to be….now one of our top 3 grocery suppliers” Waitrose “Now providing consistent supply” Co-Op 99% Service YTD 14

1 2 3 4 WIDE RANGE OF TECHNOLOGIES & CAPABILITIES WORKSOP ASHFORD LIFTON Wet Savoury Dry Savoury Desserts Creamery Capabilities Capabilities Capabilities • Aseptic can line • Dry mix powders combined with fat addition • Wet sauce manufacturer in glass & pouches • High speed retort can line • Multi dimension blending • Poppadoms & noodle manufactured in flow • Aseptic pot filling • Food Service large bag operation wrap & multivac • Aseptic combi block filling line • Agglomerations & extrusion to cube & glass • High speed sachet packaging • Twin Pot & Mini Pot jar • Bag in box technology • Cardboard drum & poly bottle filling KNIGHTON ANDOVER CHARNWOOD Powdered Foods Retail Flour Mill Frozen Pizza Bases Capabilities Capabilities Capabilities • Spray drying • Bulk flour outloading facility • Sheet & Cut technology • Agglomenation • Ingredient mixing operation • High speed flow wrap • Blending • High speed bag flour packing • Product freezing and storage • Glass, plastic and board containers • Paper sack and Tote bag packing lines • Flavoured dough Garlic / Cookie • Sachet and bag in box • High speed yeast sachet packing line 15

1 2 3 4 WIDE RANGE OF TECHNOLOGIES & CAPABILITIES - CAKE CARLTON (BARNSLEY) MORETON STOKE Cake - Pies Cake – Chocolate Cake - Slices Capabilities Capabilities Capabilities • Mini rolls enrobing • Snack Pack packing technology • Pie • Large celebration cakes • Iced toppings • Slice • Hand decoration through to • Pies & slices packed in traditional • Fondant Fancies • Whirls automated rolling board cartons • Battenburg Plus a number of strategic manufacturing partners delivering • Gel technology • Wet Noodles • Indian Breads 16 • Prawn Crackers

1 2 3 4 KEY PERFORMANCE INDICATORS – A TRACK RECORD OF CONTINUOUS IMPROVEMENT Customer Service Zero Waste to CO 2 Emissions up to 98.7% 1 reduced by 9% 2 landfill 1 – 2014 YTD, excludes cake; 2 – C0 2 Equivalent emissions reduction 2011 - 2013 17

1 2 3 4 INVESTING FOR GROWTH AND EFFICIENCY 2014 PROJECTS DOUBLING OUR 2013 INVESTMENT GROWTH c.£20m £35m-£40m • New Snackpack slices line • Cadbury Desserts • Additional Pack formats Snackpack • Bisto Best relaunch Other Growth COST REDUCTION Cost reduction IT • Auto palletiser at Carlton • Process optimisation Infrastructure • Auto powder blending Technical • New Poppadom fryer • Ashford filler replacement 2014 2015 AND BEYOND IT • Completes the manufacturing base conversion to SAP 18

1 2 3 4 EXAMPLES OF RECENT INVESTMENT TWIN POT FILLING - LIFTON CANNING FILLER - LIFTON AUTO PACKING - MORETON REPLACEMENT FRYER - WORKSOP 19

Helen Warren-Piper, Business Unit Director 3 John Petre, Technical & Innovation Director

1 2 3 4 OUR CATEGORY APPROACH  Drive category growth and market share  Clear category growth drivers grounded in shopper insights  Insight led innovation as a driver of category growth  Premier products in more meal occasions  Premier products in more family meal occasions 21

1 2 3 4 BRAND METRICS DEMONSTRATE HIGH CONSUMER USAGE IN UK 108 107 104 94 90 Consumer Reach 76 75 Points 67 67  High ‘Consumer Reach Points’ a function of purchasing frequency  The Premier Foods brands above grew CRPs in 2013 Source: Kantar Worldpanel, Purchase Panel October 2013 22

1 2 3 4 KEY CONSUMER TRENDS IN SAVOURY FOOD CONVENIENCE FEELS LIKE I’M COOKING REAL FOOD Busy Lives Increasing interest in food & Increased concerns about cooking (TV chefs) ‘what’s in it’ Pressure on time to cook & eat Time pressures / skill gaps Wet feels fresher than dry On the Go eating Emotional need to “I made it myself” ‘feel like a hero mum’ Key role for convenient ingredients 23