Strong Financial & Strategic Progress RESULTS FOR THE YEAR - PowerPoint PPT Presentation

Strong Financial & Strategic Progress RESULTS FOR THE YEAR ENDED 31 MARCH 2017 19 75 Year ended 31 March 2017 1

AGENDA INTRODUCTION Martin Davey, Chairman HIGHLIGHTS Adam Couch, CEO FINANCIAL REVIEW Mark Bottomley, Finance Director COMMERCIAL UPDATE Jim Brisby, Commercial Director OPERATING & STRATEGIC REVIEW Adam Couch, CEO Q&A 19 75 Year ended 31 March 2017 2

HIGHLIGHTS REVENUE (£M)2 ADJUSTED PROFIT BEFORE TAX (£M) 1,2 +17.2% +22.5% 2017 1,245.1 2017 75.5 2016 1,016.3 2016 64.4 ADJUSTED EARNINGS PER SHARE (P) 1,2 DIVIDEND PER SHARE (P) +17.6% +17.6% 2017 120.9 2017 44.1 2016 2016 102.8 37.5 NET (DEBT)/FUNDS (£M) FREE CASH FLOW (£M) -13.2% -£28.8M 2017 72.4 2017 (11.0) 2016 83.4 2016 17.8 +25% 2 2.7M +49% £47M TOTAL VOLUME GROWTH RECORD PIG NUMBERS EXPORT SALES INVESTMENT IN ASSET BASE PROCESSED TO FAR EAST FOR FUTURE GROWTH 1. Excludes IAS41 movements on biological assets and acquisition related amortisation in 2017 and 2016 2. 2016 results have been restated to exclude the sandwich business, which was sold in July 2016 and is now treated as discontinued 19 75 Year ended 31 March 2017 3

TRADING RECORD 1990 – 2017 DIVIDEND PER SHARE (pence) ADJUSTED PROFIT BEFORE TAX 1,2 (£M) 75.5 44.1 £1,245m 27 YEARS OF UNBROKEN 37.5 64.4 DIVIDEND GROWTH 34.0 £1,005m 57.8 32.0 30.0 52.2 28.5 49.1 27.5 47.3 25.0 45.6 43.8 21.7 £740m 19.9 18.1 34.7 32.733.0 31.1 16.5 14.5 13.2 REVENUE 2 12.0 21.2 21.6 10.8 19.8 £313m 8.3 17.5 7.5 6.8 5.8 11.7 3.3 3.8 4.0 4.1 4.3 4.6 5.1 £157m £116m 9.3 7.1 2.8 £64m 4.0 5.0 2.2 2.3 3.0 3.1 1.7 1.4 0.9 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '14 '15 '16 '17 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 1. Excludes IAS41 movements on biological assets and acquisition related amortisation in 2017 and 2016 2. 2016 results have been restated to exclude the sandwich business, which was sold in July 2016 and is now treated as discontinued 19 75 Year ended 31 March 2017 4

HIGHLIGHTS • Strong revenue and earnings growth • Pig price infmation successfully managed • Positive contribution from acquisitions • Far East export sales up 49% • Record £47m capex programme to support strong growth pipeline • Sale of Sandwich business • Dividend up 17.6% to 44.1p per share 10 YEAR RECORD Compound annual growth rates to 31 March 2017 REVENUE ADJUSTED PROFIT ADJUSTED EARNINGS DIVIDEND BEFORE TAX PER SHARE PER SHARE 9.3% 8.7% 9.2% 9.3% PA PA PA PA 19 75 Year ended 31 March 2017 5

FINANCIAL SUMMARY CONTINUING OPERATIONS (£M) 2017 2016 % CHANGE Revenue 1,245.1 1,016.3 22.5% Like-for-like revenue 1 1,145.2 1,016.3 12.7% Adjusted gross margin 2 12.8% 13.4% 68bps Adjusted operating profjt 2, 3 76.1 65.1 17.0% Adjusted operating margin 2, 3 6.1% 6.4% 29bps Adjusted profjt before tax 2, 3 75.5 64.4 17.2% Adjusted earnings per share 2, 3 120.9p 102.8p 17.6% Dividend per share 44.1p 37.5p 17.6% 1. Like-for-like revenue excludes the contribution from Crown Chicken and Ballymena in the current year 2. Excludes IAS 41 movement on biological assets in both years 3. Excludes acquisition related amortisation in both years 19 75 Year ended 31 March 2017 6

CASH FLOW £M 2017 2016 Cash generated from operations 87.7 97.8 NET CAPEX (£M) 2017 2016 Tax paid (14.8) (14.0) Fresh pork 11.1 9.1 Convenience 23.9 12.1 Net cash from operating activities 72.9 83.8 Gourmet products 7.4 6.5 Net capital expenditure (46.5) (33.7) Poultry 3.9 5.1 Other 0.2 0.9 Government grants received – 0.2 Net capex 46.5 33.7 Acquisitions (56.0) – Disposals 15.5 – NET (DEBT) / FUNDS BRIDGE (£M) Interest paid (0.5) (0.4) 140 120 Share issues 0.8 0.6 18.6 100 14.8 80 Dividend paid (14.6) (14.6) 103.7 40.5 60 40 Net cash (outfmow) / infmow (28.4) 35.9 46.5 20 17.8 11.0 0 14.6 2.5 Net (debt) / funds (11.0) 17.8 -20 6 A l n / x s r 7 a s e o e d 1 1 D t n h 0 0 i i o s p n T p t t 2 2 a i l a e O I a t a B x i c d c s s E a o t v i T u i e g p i d q N D n s e c k i i t A d s r o u j W d A 19 75 Year ended 31 March 2017 7

BALANCE SHEET Acquired goodwill 23.3 £M 2017 2016 Acquired customer relationships 4.6 Acquisition related amortisation (2.1) Property, plant & equipment 215.7 178.5 Sale of sandwich business (7.0) Intangible assets 158.5 139.7 Net movement 18.8 Biological assets 19.6 11.0 Working capital 68.3 41.2 Acquisitions / disposals 5.4 Net (debt) / funds (11.0) 17.8 Inventories 13.7 Tax, grants, provisions, pensions (29.7) (20.2) Receivables 26.6 Net assets 421.4 368.0 Payables (18.6) Net movement 27.1 KEY METRICS 2017 2016 ROCE 1 19.0% 18.2% 81 bps y-o-y improvement Gearing 3% – in ROCE Interest cover 122x 98x Dividend cover 2 2.7x 2.7x 1. Adjusted operating profit divided by sum of average net assets, net debt, pension liabilities & deferred tax 2. On adjusted profit for the year from continuing operations 19 75 Year ended 31 March 2017 8

POSITIVE 4 YEAR CAGR ACROSS KEY METRICS ADJUSTED GROSS MARGIN ADJUSTED EBITDA (£M) 120 CAGR 2.7% CAGR 13.3% 100 103.7 14% 80 85.9 13.4 13% 77.0 12.8 60 71.3 12.4 12% 40 11.8 11% 20 10% 0 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 ADJUSTED OPERATING MARGIN ROCE 7.0% 19% CAGR 4.1% CAGR 4.2% 19.0 6.5% 18% 18.2 6.4 6.0% 6.1 5.8 17% 5.5% 17.0 16.8 5.4 5.0% 16% FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 19 75 Year ended 31 March 2017 9

CASH GENERATION 2010–2017 (£M) FREE CASH ACQUISITION / CASH INFLOW / NET CAPEX DIVIDEND PAID FLOW (DISPOSAL) (OUTFLOW)* 2017 72.4 46.5 40.5 14.6 (29.2) 2016 83.4 33.5 – 14.6 35.3 2015 52.7 20.4 17.7 15.3 (0.7) Strong free cash fmow 2014 59.1 27.4 14.4 12.7 4.6 Record capital 2013 49.0 30.5 5.8 11.4 1.3 expenditure Strategically important 2012 43.4 19.9 (14.5) 11.8 26.2 corporate activity 2011 50.0 33.9 – 10.5 5.6 2010 29.6 19.9 (8.1) 8.8 9.0 439.6 232.0 55.8 99.7 52.1 * Excludes the proceeds from the issue of share options 19 75 Year ended 31 March 2017 10

SUCCESSFUL REFINANCING OF BANKING FACILITY ON IMPROVED TERMS REVOLVING CREDIT FACILITY (£M) REFINANCING 40 Completed 17th November 2016 30 ACCORDION COMMITTED New £160m revolving credit 120 160 facility with 4 major UK banks Includes committed overdraft of £20m OLD FACILITY NEW FACILITY NET FUNDS / (DEBT) PROFILE (£M) Option to access a further £40m on the same improved terms To November 2021 with opportunity 17.8 to extend for a further two years 2015 2016 2017 Unsecured (11.0) (17.3) 19 75 Year ended 31 March 2017 11

COMMERCIAL OVERVIEW FULL YEAR REVIEW 2017 TRENDS CRANSWICK PERFORMANCE OUTLOOK Retailers Sustainable growth Poultry Consumers Infmation Strategic partnerships Out of home Innovation Innovation 19 75 Year ended 31 March 2017 12

MARKET TRENDS CONSUMER INSIGHT & RETAILER PERFORMANCE RETAILERS CONSUMERS OUT OF HOME Recovery in Top 4 Convenience Continued growth Infmation management Health Forecourts New solutions Inspiration New product solutions 19 75 Year ended 31 March 2017 13

CRANSWICK PERFORMANCE GROWTH OUTPACING THE MARKET IN ALL CATEGORIES SUSTAINED GROWTH INFLATION INNOVATION Cooked meats H1 defmation Trend led Sausages H2 infmation Increased channels Bacon Ongoing management Indirect supply 19 75 Year ended 31 March 2017 14

COMMERCIAL DATA CRANSWICK SALES MARKET* ANNUAL SALES 2016–17 ANNUAL SALES 2016–17 CHANGE CHANGE CATEGORY VALUE VOLUME VALUE VOLUME Fresh Pork (i) +2.1% -0.5% -7.7% -3.6% +8.4% Super premium Gourmet Products (ii) +16.4% +28.0% -2.5% +0.2% Convenience (iii) +20.3% +23.0% -1.0% -0.1% Poultry (iv) +17.7% +25.6% +1.0% +6.0% NOTES: *SOURCE: (i) Like-for-like Fresh Pork sales exclude the contribution from Ballymena. Including Ballymena, Kantar Worldpanel, 52 w/e 26 March 2017 total Fresh Pork sales growth was +6.7%. Fresh Pork retail sales -3.9%, volume -6.4% (ii) Gourmet Products comprises Sausage, Bacon and Pastry (iii) Convenience comprises Cooked Meats and Continental Products (iv) Poultry comprises Fresh and Cooked Poultry. Like-for-like Poultry sales exclude the contribution from Crown Chicken. Including Crown Chicken, total Poultry sales growth was +181% 19 75 Year ended 31 March 2017 15

INNOVATION MEETING CONSUMER NEEDS Modern Modern Pork Modern Lunch Delicatessen Slow Cook Health Food on the Go & Sous Vide 19 75 Year ended 31 March 2017 16

OUTLOOK LONG-TERM STRATEGIC GROWTH POULTRY STRATEGIC PARTNERSHIPS INNOVATION Business wins Strategic relationships Consumer focused Added value from Summer 2017 Bespoke supply chains Modern Investment plan Capital investment Relevant 19 75 Year ended 31 March 2017 17

STRATEGY & BUSINESS MODEL CONSOLIDATION DIVERSIFICATION INTERNATIONAL DRIVING THE CORE EXPANDING OUR OFFER DEVELOPING NEW OPPORTUNITIES STRATEGIC PILLARS GUIDING PRINCIPLES QUALITY VALUE SALES HIGH QUALITY OPERATING SUSTAINABILITY GROWTH PRODUCTS EXCELLENCE PEOPLE INNOVATION 19 75 Year ended 31 March 2017 18