Investor & Analyst Carlton visit 1 July 2015
AGENDA FOR TODAY Time Activity Who 08:45 Arrival & introductions All 09:00 Investing for the future Gavin Darby, Chief Executive Officer 09:10 Funding the investment Alastair Murray, Chief Financial Officer 09:20 Delivering results in Grocery Helen Warren-Piper, Marketing Director, Grocery Driving growth in Sweet Treats Graham Hunter, Managing Director, Sweet Treats 09:35 Capturing opportunities in Sweet Treats Phil Ellis, Marketing Director, Sweet Treats 09:55 Q&A All 10:25 Exhibition & coffee break All 10:45 New Snack pack cake line David Seeckts, Manufacturing Director, Sweet Treats 11:25 Carlton factory overview Simon Wood, Factory General Manager, Carlton 11:40 Factory preparation All 11:50 12:00 Factory tour All 13:30 Lunch All 14:30 – 14:45 Q&A, closing remarks & depart All 2 2
Gavin Darby Chief Executive Officer 3
TODAY’S OBJECTIVES 1 Demonstrate the growth opportunities in the Sweet Treats business ‒ Growth through cost and efficiency ‒ Growth through insights and innovation 2 Showcase our new Mr. Kipling Snack Pack line 3 A reminder of the great work going on in the Grocery business 4 An opportunity to meet the Sweet Treats management team 5 To eat a little bit of cake....or maybe a lot! 4
A YEAR SINCE WE MET AT WORKSOP Our new organisational structure is working well Corporate Grocery Sweet Treats International functions Legal IT Procurement Group finance Corporate Affairs Central Human Resources Sales Marketing Innovation Technical Commercial Finance Business unit Human Resources 5
OUR STRATEGY IS TO DELIVER CATEGORY GROWTH We invest in marketing, innovation, people and capex Consumer marketing % Branded sales 1 Consumer marketing (£m) 5.6% 34-38 4.8% 33 3.5% 25 6-12% UK multinational 2013/14 2014/15 2015/16 2013/14 2014/15 2015/16 peers Household Penetration 2 Sales from innovation 20.0% +1.1ppts +1.8ppts +0.7ppts +2.2ppts +1.7ppts 11.3% 6.9% 2013/14 2014/15 Target 1 - Assumes 2015/16 consumer marketing of £38m and if Branded sales = FY14/15 of £684m 6 2 – Kantar Worldpanel, 52 w/e 29 April 2015
WE ARE INVESTING IN OUR ORGANISATION 623 616 22.5% (17.6%) Headcount Shared IT Finance Sales & International Headcount April 2014 services Marketing June 2015 Revenue Support Generating Functions Significant increases in commercial areas to support category growth strategy Reductions in IT and shared service functions following completion of systems upgrades 7
Alastair Murray Chief Financial Officer 8
CAPITAL INVESTMENT TO DRIVE GROWTH AND COST EFFICIENCIES 25% c.3.25% 1.5:1 39% 36% Capex : Depreciation Capex % Sales Growth Cost release Infrastructure 2015/16 CAPEX A strong pipeline of cost release and growth projects, many with less than 3 year paybacks c.£25m A legacy of under-investment across the Group Many quick payback projects previously put on hold Opportunities clearly evident in Sweet Treats Many areas of the Group require investment in infrastructure 9
CAPEX PROJECTS AT STOKE CAKE BAKERY £7m investment expected to deliver 2.5 year paybacks Project Investment Payback • Packing automation for pies line, reducing labour costs 2.7 yrs • £4.0m Introduces capability to produce twin pack formats for convenience channel • Packing automation for slices line, reducing labour costs £1.7m 3.0 yrs • Delivers fully automated cartoning capability • Automatic sieving operation 1.1 yrs £0.5m • Ultrasonic cutter replacing water jet cutter for Snack pack line, reducing labour cost £0.8m 2.6 yrs • Automatic case packer for pies & tarts line reducing labour costs 10
CAPEX PROJECTS AT STOKE CAKE BAKERY £7m investment expected to deliver 2.5 year paybacks Pies & Tarts line automatic case packer Ultrasonic Snack Pack slices cutter Robotic carton loader 11
OPERATIONAL EXCELLENCE +10ppts Value engineering Better demand planning Moreton bakery delivering: processes operational improvements • Reduced cost • Improved promotional • Overall equipment planning effectiveness (OEE) • Improved product improved by over • Reduced product write quality 10ppts on key Mini Rolls offs line 12
OUR CASH GUIDANCE IS UNCHANGED 2015/16 guidance £m Working capital Broadly neutral Depreciation c.£16m Capital expenditure c.£25m Interest – cash £40-£43m Interest – P&L c.£45m Tax – cash Nil Tax – notional P&L rate 20.0% Pension deficit contributions £6m Pension administrative & PPF levy cash costs £8-£10m Consumer marketing £34-£38m Cash tax expected to be nil over medium term Pension administrative & PPF cash costs reflected in Operating profit but not Trading profit 13
Helen Warren-Piper Marketing Director, Grocery
WHAT WE SAID AT WORKSOP LAST YEAR 1 We have strong brand equity measures – Penetration, Consumer reach points 2 We have identified some key consumer trends which have informed our innovation agenda 3 Trailed our second half innovation agenda....which is delivering results 4 Showcased our research & development centre 15
A REMINDER OF OUR CONSUMER INSIGHTS CONVENIENCE FEELS LIKE I’M COOKING “FOODIENESS” Increasing interest in Busy Lives Increased concerns food & cooking (TV about ‘what’s in it’ Pressure on time to cook chefs) & eat Wet feels fresher than Time pressures / skill On the Go eating dry gaps Key role for convenient Emotional need to ingredients “I made it myself” ‘feel like a hero mum’ 16
CONSUMER INSIGHTS, PLATFORMS AND EXAMPLES Consumer Consumer Technology Product trends & platforms platforms examples insights One pot solutions Convenience Pouched paste Bisto Gravy pastes concentrates Bisto Simply Casserole ‒ Cooking times Family favourites pouches reduced to c.30 Gel concentrates mins ‘Closer to homemade’ Oxo Herbs & More New flavour Loyd Grossman Pan Feels like I’m cooking technologies Easy flavour Melts transformers Sharwood’s Stir Fry Pasteurisation Melts ‘Real’ food Real ingredients are wet Oxo Stock Pots Added meal Homepride Peri-Peri & excitement Hunter’s chicken 17
OUR INNOVATIONS AND INVESTMENT ARE DELIVERING RESULTS Sales Share Penetration Category Volume +5% +8% +1.8ppt +0.8ppt +2.5% +2% +3% +1.1ppt +0.1ppt Source: IRI volume & retail sales value, 26 w/e 4 April 2015; Penetration: Kantar Worldpanel, 52 w/e 29 March 2015 18
DELIVERING ON PREMIUMISATION Value per serving increases to drive category growth £0.15/serving £0.24 £1.00 £0.66/serving £0.85 £1.25 19
BISTO CASE STUDY VISION: Inspiring mum to create favourite meals that bring the family together , by showing new ideas or reminding her that existing family meals can taste Modern better with flavourings and Foodies seasonings “ Home-made from fresh is ideal but takes time; dry packet mixes are helpful but not as good as home-made ” 20
WHAT’S COMING UP NEXT? Desserts Flavourings & Seasonings Continuation of consumer platforms: • Real Ingredients are wet • One pot solutions Significant innovation Now instore and planned for 2016 more to come Cooking Sauces Light Meals Initiatives planned across each sub-category in Continued support for ‘ flavour transformers’ H2 using gel technology platforms 21
Graham Hunter Managing Director, Sweet Treats 22
THE SWEET TREATS MARKET A £6 billion opportunity Chocolate Biscuits Cake confect’y £2.2bn £1.0bn £2.6bn +3.6% +3.0% 5 Year CAGR +0.7% As the Sweet Treats market has grown, Cake has not adapted as successfully as Chocolate & Biscuits 23 Source: Kantar Worldpanel
SWEET TREATS STRATEGY BUSINESS UNIT OBJECTIVES 1. Grow share and become famous for snacking innovation across Sweet Treats 2. Build customer and consumer loyalty 3. Drive profitable growth Enhance our brand Increase efficiency, Extend formats, Taking the right offering reduce costs target new occasions ‘route to market’ • Extend impulse & • Ubiquitous Mr. • Productivity • Beyond ‘teatime’ convenience Kipling improvements • Higher value • Leverage own label • Quality a • Lower cost logistics propositions differentiator for asset utilisation 24 24
ALIGNED TO OUR CORPORATE STRATEGY DRIVING CATEGORY GROWTH CUSTOMERS CONSUMERS 1. Focus on category 1. Invest in brands leadership 2. Build brand equity BRANDS 2. Extend category 3. Drive penetration & presence 1. Brand investment loyalty 3. Volume & value 2. Innovation through growth insights COSTS 1. Lean manufacturing PEOPLE excellence Unlocking our 2. Investment to drive people’s potential productivity 3. Improved logistics SUSTAINABILITY Being responsible and sustainable 25
A NEW SWEET TREATS LEADERSHIP TEAM WITH OVER 100 YEARS SECTOR EXPERIENCE GRAHAM HUNTER MANAGING DIRECTOR PHIL ELLIS CHRIS STONE RICHARD MARTIN TARVINDER PURI DAVID SEECKTS MARKETING DIRECTOR FINANCE DIRECTOR COMMERCIAL DIRECTOR HR MANAGER OPERATIONS DIRECTOR 26
Recommend
More recommend
