Boparan Holdings Q4 and full-year Results for the 13 and 52 weeks - - PowerPoint PPT Presentation

BONDHOLDER UPDATE

Boparan Holdings

Q4 and full-year Results for the 13 and 52 weeks ended 30th July 2016

3rd November 2016 Charles Allen, Chairman Ranjit Singh, CEO Steve Leadbeater, CFO

Headlines

Q4 builds on previous quarters; strategy working

Total revenue up 2.4% to £775m; LFL operating profit up 34.6% to £25.3m Productivity and efficiency gains following targeted investment programmes Better Before Bigger strategy working Encouraging progress continues in fourth quarter

Better Before Bigger – divisional overview

Building a better, stronger business; focusing on profitable top line growth

• Improvement in sales and profit
• Strengthening customer relationships
• New customers for Red Meat

PROTEIN

• Turnaround of division
• Strategic investments create strong platform for growth
• New major contract for breaded fish

CHILLED

• Margin and profit improvement
• Gains in market share
• New contracts for Frozen

BRANDED

Better Before Bigger

Building a better, stronger business; focusing on profitable top line growth

• Major £150m investment programme in UK poultry business continues
• Added Value site in Derby now fully operational
• Continuing investment in Chilled

INVESTMENT

• Oriental foods hub at Rogerstone site
• New product launches in Branded and Chilled
• Red Meat wins multiple awards

INNOVATION

• Streamlined production, logistics and supply chain for UK poultry
• De-centralised structures, more autonomy for sites
• Continue to look at central cost reduction

EFFICIENCY

Financial overview

Q4 results:

• Continued improvement across the Group
• Total Sales up 2.4%, LFL up 0.8%
• LFL EBITDA up 14.0% to £50.5m
• EBITDA margin improved by 70bp to 6.6%
• Leverage ratio reduced to 3.9x

5

1. LFL CY Revenue & EBITDA adjusted for the impact of exchange rate movements year on year. 2. EBITDA excludes pension scheme admin expenses of £4.0m (2015: £3.3m) 3. PY Adjusted EBITDA = LFL EBITDA before the impact of £17.4m of costs incurred in Q2 14-15 relating to Avian influenza and IT system issues. 4. The comparative Q4 2015 results have been restated to take into account the adoption of FRS 102 during the year. The effect of adopting FRS102 on Q4 2015 results was to reduce EBITDA by £0.8m..

Q4 2016 Q4 20154 Y-o-Y Variance Q3 2016 Q4-on-Q3 Variance Revenue: Like-for-like (£m)1 763.0 756.8 0.8% 775.9 (1.7)% Revenue (£m) 775.0 756.8 2.4% 784.5 (1.2)% EBITDA: Like-for-like (£m)1,2 50.5 44.3 14.0% 43.6 15.8% EBITDA margin: Like-for-like (%)2 6.6% 5.9% 70bps 5.6% 100bps EBITDA (£m)2 51.8 44.3 16.9% 44.3 16.9% Cash flow from operations (£m) 52.3 46.2 6.1 34.2 18.1 Net Debt (£m) 706.4 716.6 (10.2) 711.0 (4.6) LTM Adjusted EBITDA (£m)2,3 180.7 160.9 19.8 176.1 4.6 Net debt to Adj. EBITDA ratio2,3 3.91 x 4.45 x 0.54 x 4.04 x 0.13 x

Revenue analysis

• Overall sales Growth of 2.4%
• Exchange rate moves account for 1.6% giving

underlying Growth of 0.8%

• Deflation, largely in Protein division impacted

the business by 1.1%

• Major wins and losses improved the underlying

position by 0.9%

• Underlying organic Growth improved the

position by 1.0% Q4 2016 Revenue analysis

Cashflow

• Positive Cash Flow in the Quarter
• Working Capital improved in the

period

• Quarterly payment of Pension

Liabilities in line with the agreed recovery plan.

• Exceptionals in the period relate

to restructuring costs

• Capital represents a catch up from

earlier periods of the Poultry change plan in Ready to Cook and Added Value as well as the investment in Meal Solutions Q4 2016 Cashflow 51.8 9.5 (4.7) (4.4) (3.7) (43.0) (1.1) 4.4 10 20 30 40 50 60 70

EBITDA Q4 2015-16 Working capital movement Pensions Exceptionals Interest and tax paid Capex (net) Finance leases (net outflow) Cash inflow Q4 2015-16

£m

Protein performance

• Overall growth of 0.8%
• LFL revenue down 1.1%:
• Deflation (0.8%)
• Volume (0.3%)
• LFL EBITDA £20.5m
• Margin has improved from Q3 3.4%

to 3.9% which is also 20bps up year

• n year

Protein – UK and European Poultry & Red Meat

1 CY At constant currency 2 The comparative Q4 2015 results have been restated to take into account the adoption of FRS102 during the year. The effect of adopting FRS102 on Q4 2015 results was to reduce EBITDA in the Protein division by £0.5m.

Year on year Q4 2016 Q4 20152 Y-o-Y Variance Revenue: Like-for-like (£m)1 531.5 537.6 (1.1)% Revenue (£m) 542.0 537.6 0.8% EBITDA: Like-for-like (£m)1 20.5 20.0 2.5% EBITDA margin: Like-for-like (%)1,2 3.9% 3.7% 20bps EBITDA (£m) 21.1 20.0 5.5%

Chilled performance

• Turnaround strategy now fully

delivering

• Like for Like revenue growth of 7.3%
• Strong like for like EBITDA growth of

42.3% to £13.0m

• Margin improvement of 230bps ‘v’ Q4

last year to 9.3% Chilled – Food To Go & Bakery; Meal Solutions

1 CY At constant currency 2 EBITDA excludes pension scheme admin expenses of £1.7m (2015: £1.4m) 3 The comparative Q4 2015 results have been restated to take into account the adoption of FRS102 during the year. The effect of adopting FRS102 on Q4 2015 results was to reduce EBITDA in the Chilled division by £0.2m

Year on year Q4 2016 Q4 20153 Y-o-Y Variance Revenue: Like-for-like (£m)1 140.4 130.9 7.3% Revenue (£m) 140.3 130.9 7.2% EBITDA: Like-for-like (£m)1,2 13.0 9.1 42.9% EBITDA margin: Like-for-like (%)1,2 9.3% 7.0% 230bps EBITDA (£m)2 13.0 9.1 42.9%

Branded performance

• Like for Like revenue Growth of 3.2%
• Like for Like EBITDA up 11.8% to

£17.0m

• Strong like for like margin growth to

18.7% Branded – Frozen & Biscuits

1 CY At constant currency 2 EBITDA excludes pension scheme admin expenses of £2.3m (2015: £1.9m) 3 The comparative Q4 2015 results have been restated to take into account the adoption of FRS102 during the year. The effect of adopting FRS102 on Q4 2015 results was to reduce EBITDA in the Branded division by £0.1m

Year on year Q4 2016 Q4 20153 Y-o-Y Variance Revenue: Like-for-like (£m)1 91.1 88.3 3.2% Revenue (£m) 92.7 88.3 5.0% EBITDA: Like-for-like (£m)1,2 17.0 15.2 11.8% EBITDA margin: Like-for-like (%)1,2 18.7% 17.2% 150bps EBITDA (£m)2 17.7 15.2 16.4%

Summary

Better Before Bigger strategy working

Third consecutive quarter of encouraging results Investment and innovation driving improvements Well-placed as we head into new financial year

Appendix I – Full Year 15-16 Performance

2015-16 Full Year Group Financial Performance

1. LFL CY Revenue & EBITDA adjusted for the impact of exchange rate movements year on year. 2. EBITDA excludes pension scheme admin expenses of £4.0m (2015: £3.3m). 3. Comparative FY 2015 results have been restated to take into account the adoption of FRS 102 during the year. The effect of adopting FRS102 on FY 2015 results was to reduce EBITDA by £0.8m.

2015-16 by quarter Q1 Q2 Q3 Q4 YTD Revenue: Like-for-like (£m)1 787.9 800.1 775.9 763.0 3,126.9 Revenue (£m) 778.3 792.0 784.5 775.0 3,129.8 EBITDA: Like-for-like (£m)1,2 41.2 45.4 43.6 50.5 180.7 EBITDA margin: Like-for-like (%)1,2 5.2% 5.7% 5.6% 6.6% 5.8% EBITDA (£m)2 40.4 44.5 44.3 51.8 181.0

Full year 2016 20153 Y-o-Y Variance Revenue: Like-for-like (£m)1 3,126.9 3,140.2 (0.4)% Revenue (£m) 3,129.8 3,140.2 (0.3)% EBITDA: Like-for-like (£m)1,2 180.7 143.5 25.9% EBITDA margin: Like-for-like (%)1,2 5.8% 4.6% 120bps EBITDA (£m)2 181.0 143.5 26.1% Cash flow from operations (£m) 181.2 78.7 102.5 Net Debt (£m) 706.4 716.6 (10.2)

Appendix II – Protein Full Year Performance

2015-16 Protein

1. At constant currency 2. Comparative FY 2015 results have been restated to take into account the adoption of FRS 102 during the year. The effect of adopting FRS102 on FY 2015 Protein results was to reduce EBITDA by £0.5m

2015-16 by quarter Q1 Q2 Q3 Q4 Revenue: Like-for-like (£m)1 538.6 530.7 533.3 531.5 Revenue (£m) 530.2 523.6 540.8 542.0 EBITDA: Like-for-like (£m)1 18.4 16.9 18.1 20.5 EBITDA margin: Like-for-like (%)1 3.4% 3.2% 3.4% 3.9% EBITDA (£m) 18.0 16.5 18.4 21.1

Full year 2016 20152 Y-o-Y Variance Revenue: Like-for-like (£m)1 2,134.1 2,167.5 (1.5)% Revenue (£m) 2,136.6 2,167.5 (1.4)% EBITDA: Like-for-like (£m)1 73.9 63.0 17.3% EBITDA (£m) 74.0 63.0 17.5%

Appendix III – Chilled Full Year Performance

2015-16 Chilled

1. At constant currency 2. EBITDA excludes pension scheme admin expenses of £1.7m (2015: £1.4m) 3. Comparative FY 2015 results have been restated to take into account the adoption of FRS 102 during the year. The effect of adopting FRS102 on FY 2015 Chilled results was to reduce EBITDA by £0.2m

2015-16 by quarter Q1 Q2 Q3 Q4 Revenue: Like-for-like (£m)1 148.0 165.7 148.7 140.4 Revenue (£m) 148.0 165.7 148.8 140.3 EBITDA: Like-for-like (£m)1,2 8.3 11.3 10.1 13.0 EBITDA margin: Like-for-like (%)1,2 5.6% 6.8% 6.8% 9.3% EBITDA (£m)2 8.3 11.3 10.1 13.0

Full year 2016 20153 Y-o-Y Variance Revenue: Like-for-like (£m)1 602.8 596.5 1.1% Revenue (£m) 602.8 596.5 1.1% EBITDA: Like-for-like (£m)1,2 42.7 36.4 17.3% EBITDA (£m)2 42.7 36.4 17.3%

Appendix IV – Branded Full Year Performance

2015-16 Branded

1. At constant currency 2. EBITDA excludes pension scheme admin expenses of £2.3m (2015: £1.9m) 3. Comparative FY 2015 results have been restated to take into account the adoption of FRS 102 during the year. The effect of adopting FRS102 on FY 2015 Branded results was to reduce EBITDA by £0.1m

2015-16 by quarter Q1 Q2 Q3 Q4 Revenue: Like-for-like (£m)1 101.3 103.7 93.9 91.1 Revenue (£m) 100.1 102.7 94.9 92.7 EBITDA: Like-for-like (£m)1,2 14.5 17.2 15.4 17.0 EBITDA margin: Like-for-like (%)1,2 14.3% 16.6% 16.4% 18.7% EBITDA (£m)2 14.1 16.7 15.8 17.7

Full year 2016 20153 Y-o-Y Variance Revenue: Like-for-like (£m)1 390.0 376.2 3.7% Revenue (£m) 390.4 376.2 3.8% EBITDA: Like-for-like (£m)1,2 64.1 44.1 45.4% EBITDA (£m)2 64.3 44.1 45.8%

Appendix V - FRS102 Impact Summary - Income Statement

2014-15 Full Year Group Restatement of Financial Performance FY15 UK GAAP FV movements of forward exchange derivatives DB pension scheme Changes in measurement of financial instruments Depreciation

• n deemed

cost Tax effect FY15 FRS102 EBITDA 144.3 (0.8) 143.5 Exceptional items (11.5) (11.5) Share of operating profit from JV

• Depreciation

(55.1) 2.5 (52.6) Amortisation of intangible assets (30.4) (30.4) Pension scheme admin costs (3.3) (3.3) Operating profit 47.3 (0.8) (3.3)

• 2.5
• 45.7

Net financing costs (60.9) 3.0 0.7 (57.2) Loss before tax (13.6) (0.8) (0.3) 0.7 2.5

• (11.5)

Taxation 9.0 (0.4) 8.6 Loss after tax (4.6) (0.8) (0.3) 0.7 2.5 (0.4) (2.9)

Appendix V - FRS102 Impact Summary - Balance Sheet

2014-15 Full Year Group Restatement of Financial Position

FY15 UK GAAP Holiday pay Amortised cost

• f external bond

notes Derivative FV Fixed assets deemed cost Reclass of Pension Deferred tax Tax Inventory FV Current assets FV FY15 FRS102 Fixed assets 860.9 (22.0) 838.9 Current assets 551.4 0.6 65.8 12.7 2.0 (1.6) 630.9 Creditors < 1 year (549.8) (2.8) 3.9 16.1 (0.4) (533.0) Creditors > 1 year (830.9) 25.2 (46.6) (852.3) Provisions (12.5) (12.5) Net pension scheme deficit (267.2) (65.8) (333.0) Net assets (248.1) (2.2) 29.1 (30.5) (22.0) 0.0 12.7 2.0 (2.0) (261.0)