2 Sister ers Food od Gr Grou oup Q1 1 2019/ 2019/20 Upd pdate - - PowerPoint PPT Presentation

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Boparan Holdings Limited 2 Sister ers Food od Gr Grou oup Q1 1 2019/ 2019/20 Upd pdate Bondholder Presentation 11 TH DECEMBER 2019 1 This presentation is for information purposes only and must not be used or relied upon for the purpose

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SLIDE 1

11TH DECEMBER 2019

2 Sister ers Food

  • d Gr

Grou

  • up

Q1 1 2019/ 2019/20 Upd pdate

Bondholder Presentation

Boparan Holdings Limited

1

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SLIDE 2

This presentation is for information purposes only and must not be used or relied upon for the purpose of making any investment decision or engaging in any investment activity. Whilst the information contained herein has been prepared in good faith, neither Boparan Holdings Limited (the “Company”), its subsidiaries (together, the “Group”) nor any of the Group’s directors, officers, employees, agents or advisers makes any representation or warranty in respect of the fairness, accuracy or completeness of the information or opinions contained in this presentation and no responsibility or liability will be accepted in connection with the same. The information contained herein is provided as at the date of this presentation and is subject to updating, completion, revision, verification and further amendment without notice. This presentation contains forward-looking statements in relation to the Group. By its very nature, forward-looking information requires the Company to make assumptions that may not materialise

  • r that may not be accurate. Forward-looking statements involve known and unknown risks,

uncertainties and other important factors beyond the control of the Company that could cause the actual performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Nothing in this presentation should be construed as a profit forecast. Past performance cannot be relied on as a guide to future performance.

Disclaimer

2

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SLIDE 3

Agenda

3 | S trategy Update 4 | Outlook

3

1 | Executive S ummary 2 | Q1 Performance

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SLIDE 4

Key Headlines

Acceleration of like-for-like earnings growth Balance sheet strengthened by Matthew Walker sale Sustained improvement in working capital performance 1 2 3

4

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SLIDE 5

Turnaround continues; Acceleration in earnings growth, debt levels falling

Q1 Performance overview

  • Revenue decline due to disposals; Manton Wood, Green Isle

Brands & Matthew Walker.

  • 0.6% increase in LFL revenue in line with previous quarters,

driven by Gunstones +53%, EU Poultry business +11.4% & Fox’s +1.1%. UK Poultry volumes flat.

  • LFL earnings growth of 42.4% with EBITDA improvements across

all segments, predominantly Bakery, as Gunstones integrates with Fox’s Biscuits in the newly formed Bakery Division.

  • £91.2m reduction in net debt driven by disposals and better

control of working capital.

1. Revenue and EBITDA exclude performance of Matthew Walker from May 2019 following derestriction. 2. EBITDA is stated before depreciation, amortisation and pension scheme administration costs. 3. Like for like (LFL) sales and EBITDA are adjusted for the impact of exchange translation and including

  • nly those businesses that were owned by the Restricted Group throughout both periods. Therefore,

Q1 FY19 excludes the results of the disposed Manton Wood, Green Isle Brands and Matthew Walker businesses. 4. Net debt is shown net of proceeds from the Matthew Walker disposal which completed at the end of Q1 FY20. At which point the third party loan in Bakery Foods Ltd (Matthew Walker) for £53m was repaid.

£m Q1 19/20 Q1 18/19 YoY Change Revenue

1 , £m

662.7 708.3 (6.4)%

EBITDA

1,2, £m

22.7 24.0 (5.4)%

LTM EBITDA

2, £m

88.3 109.5 (19.3)%

Revenue LFL

3, £m

662.7 658.6 +0.6%

EBITDA LFL

2,3, £m

22.5 15.8 +42.4%

EBITDA LFL Margin %

3.4% 2.4% +100bps

LFL LTM EBITDA

2,3, £m

81.8 70.4 +16.2%

5

Net debt

4, £m

581.9 673.1 +13.5%

Proforma Leverage

7.1x 6.8x (0.3)x

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SLIDE 6

Agenda

6

3 | S trategy Update 4 | Outlook 1 | Executive S ummary 2 | Q1 Performance

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SLIDE 7

Poultry Q1 2019/20 Results

£m Q1 19/20 Q1 18/19 YoY Change Revenue LFL

1, £m

474.4 471.3 +0.7%

EBITDA LFL

1,2, £m

11.2 9.7 +15.5%

EBITDA LFL Margin %

2.4% 2.1% +30 bps

Revenue, £m

474.4 470.7 +0.8%

EBITDA

2, £m

11.2 9.7 +15.5%

7

  • LFL sales grew +0.7%. Underlying LFL sales, excluding Fish,

increased +3.2%. European Poultry +11.4% growth, UK Poultry flat.

  • EBITDA improvements driven by UK Poultry, following

management changes.

  • Witham site closed, with the benefit expected to land from

Quarter 2 onwards.

  • Added Value factory in Poland being commissioned

1. Like for like (LFL) sales and EBITDA are adjusted for the impact of exchange translation and including only those businesses that were owned throughout both periods. There were no disposals in the Poultry Segment in FY19 or FY20. 2. EBITDA is stated before depreciation, amortisation and pension scheme administration costs. 3. Protein segment renamed as Poultry. No other changes in definition.

Poultry Performance overview

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SLIDE 8

Meals Q1 2019/20 Results

£m Q1 19/20 Q1 18/19 YoY Change Revenue LFL

1, £m

121.1 123.6 (2.0)%

EBITDA LFL

1,2,, £m

4.8 2.8 +140%

EBITDA LFL Margin %

4.0% 2.3% +170 bps

Revenue, £m

121.1 159.8 (24.2)%

EBITDA

2,, £m

5.0 7.1 (29.6)%

8

1. Like for like (LFL) sales and EBITDA are adjusted for the impact of exchange translation and including only those businesses that were owned throughout both periods. Therefore, Q1 FY19 excludes the results of the disposed Green Isle Brands and Manton Wood Sandwich businesses. 2. EBITDA is stated before depreciation, amortisation and pension scheme administration costs. 3. Chilled segment renamed as Meals and redefined to include Hollands Pies and Green Isle Pastry, along with Core Meals and now excludes Gunstones and Matthew Walker

  • LFL sales declined (2.0)%. Decline in Core Meals

driven by focus behind core strategic customer.

  • Previously stated commercial initiatives landed in Q4

positively impact EBITDA margin in Q1 19/20 and beyond.

  • Pennine consultation period ended. Closure to

conclude in second half of financial year. Meals Performance overview

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SLIDE 9

Bakery Q1 2019/20 Results

£m Q1 19/20 Q1 18/19 YoY change Revenue LFL

1, £m

67.2 63.7 +5.5%

EBITDA LFL

1,2, £m

6.5 3.3 +97.0%

EBITDA LFL Margin %

9.7% 5.2% +450 bps

Revenue, £m

67.2 77.8 (13.6)%

EBITDA

2,, £m

6.5 7.2 (9.7)%

9

1. Like for like (LFL) sales and EBITDA are adjusted for the impact of exchange translation and including only those businesses that were owned throughout both

  • periods. Therefore, Q1 FY19 excludes the results of the disposed Matthew Walker

business. 2. EBITDA is stated before depreciation, amortisation and pension scheme administration costs. 3. Branded segment renamed as Bakery and redefined to include Gunstones Bakery & Matthew Walker along wit Fox’s and now excludes Green Isle and Hollands Pies

  • LFL sales growth of +5.5% driven by Gunstones

Bakery +53%. Fox’s Biscuits sales also up +1.1%.

  • Gunstones EBITDA improvements driven by

commercial initiatives and cost reduction.

  • Fox’s EBITDA gains as previously announced

restructure projects and cost out initiatives begin to land in the quarter.

  • Matthew Walker business disposed 26th October

but Quarter 1 19/20 results not included as

  • utside of Restricted Group.

Bakery Performance overview

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SLIDE 10

Q1 2019/20 Cashflow

Cashflow, £m

10

Quarter 1 cash flow movements for the Restricted Group, which exclude Matthew Walker trading

97.8 91.7 5.3 (11.3) (6.7) (1.5) (22.5) 0.7 67.0 (53.0) (1.1) (1.5) 22.7 (4.2) 20 40 60 80 100 120 140 160 Cash Q4 2018-19 EBITDA Q1 2019- 20 Working capital movement Capex Cash Restructuring Pensions Tax Interest Leases Matthew Walker disposal proceeds Matthew Walker Bridging Loan Matthew Walker Disposal Fees Financing, FX, Other Cash Q1 2019-20 £m

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SLIDE 11

Agenda

11

3 | S trategy Update 4 | Outlook 1 | Executive S ummary 2 | Q1 Performance

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SLIDE 12

12

Our Poultry Plus Strategy is on track

Add value to and realise value from our non- poultry businesses Improve cash generation and margin Focus on our core poultry businesses Build a high performance

  • rganisation and culture

1 2 3

Increase operational effectiveness and efficiency

4 5

12 Boparan Holdings Limited – Corporate Strategy

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SLIDE 13

Good progress in Q1 and further upside to be delivered in H2 2019/20

13

Source: Team analysis

Done in YTD 2019/20 Priorities for H2 2019/20

Poultry

  • Close Witham
  • Stabilise operations and deliver operational improvements
  • Complete Value Added investment in Poland

Bakery

  • Implement commercial initiatives
  • Launch cost out program – overhead and factory efficiencies
  • Complete disposal of Matthew Walker business

Group

  • Manage smoother working capital profile
  • Implement new cash management disciplines across group
  • Continue to strengthen group in key Operations and Technical roles

Meals

  • Prepare for closure of Pennine factory in H2
  • Implement commercial initiatives

Poultry

  • Continue to deliver operational improvements in UKP
  • Targeted (moderate capex) Value Added capability investments in UKP
  • Reap rewards of new Value Added facility in Poland

Bakery

  • Continue cost out program
  • Relaunch Fox’s brand
  • Deliver highest ever Easter sales in Gunstones

Group

  • Continue to take cost out of the overall group

Meals

  • Close Pennine and facilitate smooth transition of products to sites
  • Increase efficiency and drive operational performance
  • Prepare business for Ocado expansion
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SLIDE 14

Agenda

14

3 | Full Y ear Performance 4 | Outlook 1 | Executive S ummary 2 | Q1 Performance

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SLIDE 15

Outlook

Strong Q1 exit rate; continuation of EBITDA growth rate in Q2 Transitioning delivery of turnaround objectives into sustained long term margin improvement Unrelenting focus on cost reduction and cash continues 1 2 3

15

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Appendix

Boparan Holdings Limited

Two Sisters Food Group

16

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Appendix: Restated Segment Definitions – LFL Sales

17

£m Businesses 18/19 Q1 18/19 Q2 18/19 Q3 18/19 Q4 FY Protein – now Poultry Old definition UKP, EUP, Fish (closed) 471.3 454.5 471.0 484.4 1,881.2 New definition No change 471.3 454.5 471.0 484.4 1,881.2 Chilled – now Meals Old definition Core Meals + Gunstones 115.4 137.7 131.4 106.0 490.5 New definition Remove: Gunstones Add: Hollands, GIP 123.6 145.8 129.8 108.3 507.5 Branded – now Bakery Old definition Fox’s, GIP, Hollands 71.9 65.8 60.1 59.6 257.4 New definition Remove: GIP & Hollands Add: Gunstones 63.7 57.7 61.7 57.3 240.4 Total Group 658.6 658.0 662.5 650.0 2,629.1

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SLIDE 18

Appendix: Restated Segment Definitions – LFL EBITDA

18

£m Businesses 18/19 Q1 18/19 Q2 18/19 Q3 18/19 Q4 FY Protein – now Poultry Old definition UKP, EUP, Fish (closed) 9.7 4.9 12.6 12.7 39.9 New definition No change 9.7 4.9 12.6 12.7 39.9 Chilled – now Meals Old definition Core Meals + Gunstones 0.8 5.4 5.8 2.1 14.1 New definition Remove: Gunstones Add: Hollands, GIP 2.8 7.9 5.7 2.5 18.9 Branded – now Bakery Old definition Fox’s, GIP, Hollands 5.3 3.9 3.8 8.1 21.1 New definition Remove: GIP & Hollands Add: Gunstones 3.3 1.4 3.9 7.7 16.3 Total Group 15.8 14.2 22.2 22.9 75.1