BONDHOLDER UPDATE Boparan Holdings Q1 Results for the 13 weeks ended 31 October 2015 15 December 2015 Charles Allen, Chairman Ranjit Singh, CEO Steve Leadbeater, CFO
Headlines Q1 in line with previous guidance Progress experienced in Q4 continues into Q1 Performance in Q1 in line with expectations Substantial and targeted investments to drive productivity and efficiency across all divisions now commenced Focus on building a better business 2
Better Before Bigger Building a better, stronger business; focusing on profitable top line growth • Major £150m investment programme in UK poultry business • £55m investment in Meal Solutions including refurbishments is well under way INVESTMENT • Lease of new site and acquisition of assets of food business in Derbyshire • Commitment to lead on innovation across all divisions • Over 100 new product developments planned for FY16 in Chilled division INNOVATION • Winner of a number of awards for our products and work in Protein, Chilled and Frozen • Streamlined production, logistics and supply chain for UK poultry EFFICIENCY • Continued tight cost control 3
Industry leader Investment and innovation in deeper, stronger customer relationships • Leadership in UK poultry with award-winning £10m campylobacter reduction programme CAMPYLOBACTER • FSA and major customers approval • Pioneering technologies • Leading the sector ANTIBIOTICS & ANIMAL • Won Agriculture Innovation Award for our work on responsible antibiotic use within the poultry WELFARE agriculture supply chain • Innovative production facilities for customers PARTNERSHIPS • Continued investment in production facilities to improve quality and taste for customers • Focus on better taste, better value, better quality and reduced waste PRODUCT • New product development core to the growth strategy DEVELOPMENT 4
Financial overview Y-o-Y Q1 2016 Q1 2015 Variance Revenue: Like-for-like (£m) 1 787.9 806.7 (2.3)% Revenue (£m) 778.3 806.7 (3.5)% EBITDA: Like-for-like (£m) 1 41.2 43.7 (5.7)% EBITDA margin: Like-for-like (%) 5.2% 5.4% -20bps EBITDA (£m) 40.4 43.7 (7.6)% Cash flow from operations (£m) 28.8 12.3 16.5 Net Debt (£m) 726.3 681.2 45.1 LTM Adjusted EBITDA 2 (£m) 161.5 174.4 (12.9) Net debt to Adj. EBITDA ratio 2 4.5 x 3.9 x 0.6 x Q1 results: • LFL sales down 2.3% to £787.9m • Performance in line with expectation • Strong operational Cash flow in the quarter • Net Debt ratio broadly in line with last quarter 1. LFL CY Revenue & EBITDA adjusted for the impact of exchange translation. 5 2. LTM Adjusted EBITDA = LFL EBITDA before the impact of £17.4m of costs incurred in 14-15 relating to Avian influenza and IT system issues.
Revenue analysis Q1 2016 Revenue analysis £m • Revenue down 3.5% (£28.4m) 825 806.7 • Currency impact £9.6m (9.6) • Deflation impact £8.1m (8.8) (8.1) 778.3 (6.3) 775 4.4 • Tesco share loss £6.3m • Chilled contract withdrawals Q1 2014 £8.8m • Underlying growth £4.4m 725 LY Exchange Deflation Tesco Share Withdrawals Underlying CY Loss growth 6
Cashflow Q1 2016 Cashflow £m • Overall a net outflow of £8.5m • 50 Working capital increase of £4.9m 40.4 (4.9) • Pension payments amounted to £5.1m (5.1) 40 (1.6) (24.9) • Cash exceptionals relating to actions in PY 30 were £1.6m 20 • Interest £24.9m mainly half year bond interest payment 10 (13.5) (8.5) • Capex of £13.5m 0 1.1 (10) Q1 2016 Q1 2015 (20) (30) Working capital as % of LTM revenue (4.5)% (4.5)% EBITDA Working capital Pensions Exceptionals Interest Capex (net) Finance Cash outflow Q1 Q1 2015-16 movement leases 2015-16 (net inflow) Capex as % of Q1 revenue 1.7% 3.4% 7
Protein performance Protein – UK and European Poultry & Red Meat Y-o-Y Year on year Q1 2016 Q1 2015 Variance Revenue: Like-for-like (£m) 1 538.6 549.7 (2.0)% • LFL revenue down 2% in current quarter • Deflation impact 1.8% Revenue (£m) 530.2 549.7 (3.5)% • Tesco impact 1.1% EBITDA: Like-for-like (£m) 1 18.4 24.9 (26.1)% EBITDA margin: Like-for-like (%) 3.4% 4.5% -110bps • 0.2% growth compared with Q4 EBITDA (£m) 18.0 24.9 (27.7)% • LFL EBITDA down 26.1% compared to the same period last year • Year-on-year comparison impacted by changes in group charges 8 ¹ CY At constant currency
Chilled performance Chilled – Food To Go & Bakery; Meal Solutions Y-o-Y Year on year Q1 2016 Q1 2015 Variance • Quarter-on-quarter revenues up from £130.9m Revenue: Like-for-like (£m) 1 148.0 155.9 (5.1)% to £148m; LFL sales v Q1 last year down 5.1% Revenue (£m) 148.0 155.9 (5.1)% • Turnaround strategy is on track and is starting to deliver EBITDA: Like-for-like (£m) 1 8.3 9.0 (7.8)% • Focus on investing in quality and innovative EBITDA margin: Like-for-like (%) 5.6% 5.8% -20bps products to drive growth EBITDA (£m) 8.3 9.0 (7.8)% • Over 100 new product launches planned in Q2 • £55m investment in Meals Solution Division progressing well 9 1 CY At constant currency
Branded performance Branded – Frozen & Biscuits Y-o-Y Year on year Q1 2016 Q1 2015 Variance • Revenue: Like-for-like (£m) 1 Quarter-on-quarter revenues increase from 101.3 101.1 0.2% £88.3m to £100.1m Revenue (£m) 100.1 101.1 (1.0)% • LFL sales up 0.2% fuelled by strong growth EBITDA: Like-for-like (£m) 1 14.5 9.8 48.0% in Fox’s biscuits EBITDA margin: Like-for-like (%) 14.3% 9.7% 460bps • Continued growth in EBITDA in absolute and % terms EBITDA (£m) 14.1 9.8 43.9% • LFL EBITDA up 48.0% • Positive response to launch of new products and ranges 10 ¹ CY At constant currency
Summary Better Before Bigger: Consistent and sustainable performance Targeted investment programmes supporting future growth across our Protein, Chilled and Branded divisions Business transformation continues at pace with strategy delivering with progress experienced in Q4 continuing in Q1 Confident outlook despite continued tough industry environment 11
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