Results FOR THE YEAR ENDED 31 MARCH 2019 AGENDA INTRODUCTION & - - PowerPoint PPT Presentation

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Results FOR THE YEAR ENDED 31 MARCH 2019 AGENDA INTRODUCTION & - - PowerPoint PPT Presentation

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Results FOR THE YEAR ENDED 31 MARCH 2019 AGENDA INTRODUCTION & HIGHLIGHTS Adam Couch, CEO FINANCIAL REVIEW Mark Bottomley, Finance Director COMMERCIAL REVIEW Jim Brisby, Commercial Director OPERATING & STRATEGIC REVIEW Adam Couch,

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SLIDE 1

Results

FOR THE YEAR ENDED 31 MARCH 2019

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SLIDE 2

19 75 2 Year ended 31 March 2019

INTRODUCTION & HIGHLIGHTS

Adam Couch, CEO

FINANCIAL REVIEW

Mark Bottomley, Finance Director

COMMERCIAL REVIEW

Jim Brisby, Commercial Director

OPERATING & STRATEGIC REVIEW

Adam Couch, CEO

Q&A

AGENDA

DISCLAIMER: Certain statements in this presentation are forward looking statements. By their nature, forward looking statements

involve a number of risks, uncertainties or assumptions that could cause actual results or events to difger materially from those expressed

  • r implied by those statements. Forward looking statements regarding past trends or activities should not be taken as representation that

such trends or activities will continue in the future. Accordingly undue reliance should not be placed on forward looking statements.

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SLIDE 3

19 75 3 Year ended 31 March 2019

HIGHLIGHTS

  • Like-for-like revenue in line with prior year
  • Record capital expenditure of £79 million to add

capacity, extend capability and drive effjciencies

  • Construction of the new world-class poultry primary

processing facility in Eye, Sufgolk is continuing to plan

  • New long-term supply agreement secured to supply

fresh poultry from the new Eye facility

  • New Continental Foods facility in Bury, Lancashire

completed and commissioned

  • Like-for-like Far East export volumes 16% ahead
  • Dividend up 4.1% to 55.9p per share

Compound annual growth rates to 31 March 2019 REVENUE

+9.0%

ADJUSTED EARNINGS PER SHARE

+10.4%

ADJUSTED PROFIT BEFORE TAX

+10.2%

DIVIDEND PER SHARE

+9.9%

10 YEAR RECORD

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SLIDE 4

19 75 4 Year ended 31 March 2019

£64m 1.4 1.7 2.2 2.3 3.0 3.1 4.0 5.0 7.1 9.3 11.7 17.5 19.8 21.2 21.6 31.1 32.7 33.0 43.8 0.9 47.3 '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 £116m £157m £313m £740m 49.1 52.2 57.8 64.4 '17 '18 '19 £1,437m £1,005m 75.5 90.2 92.0 34.7 45.6 34.0 37.5 3.3 3.8 4.0 4.1 4.3 4.6 5.1 5.8 6.8 7.5 8.3 10.8 12.0 13.2 14.5 16.5 18.1 19.9 21.7 25.0 27.5 28.5 30.0 2.8 '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 32.0 '15 '16 44.1 '17 '18 '19 53.7 55.9

DIVIDEND PER SHARE (pence) ADJUSTED PROFIT BEFORE TAX 1,2 (£M)

REVENUE

29 YEARS OF UNBROKEN DIVIDEND GROWTH

1. Excludes IAS41 movements on biological assets and acquisition related amortisation in 2019 and 2018
  • 2. 2018 adjusted for 53rd week

TRADING RECORD

1990 – 2019

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SLIDE 5

19 75 5 Year ended 31 March 2019

FINANCIAL HIGHLIGHTS

REVENUE (£M)2

  • 0.2%

2019 2018 1,437.1 1,440.0 ADJUSTED EARNINGS PER SHARE (P)1,2

+1.9%

2019 2018 144.3 141.6 FREE CASH FLOW (£M)

  • 21.8%

2019 2018 87.3 111.7 ADJUSTED PROFIT BEFORE TAX (£M)1,2

+2.0%

2019 2018 92.0 90.2 DIVIDEND PER SHARE (P)

+4.1%

2019 2018 55.9 53.7 NET FUNDS

  • £14.3M

6.3 2019 20.6 2018 INCREASE IN SIZE OF PIG HERD LIKE-FOR-LIKE FAR EAST EXPORT VOLUME GROWTH INVESTMENT IN ASSET BASE FOR FUTURE GROWTH SIZE OF WORKFORCE

+28% +16% £79m c10,300

1. Excludes IAS41 movements on biological assets and acquisition related amortisation in 2019 and 2018
  • 2. 2018 adjusted for 53rd week
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SLIDE 6

19 75 6 Year ended 31 March 2019

1. Like-for-like excludes 53rd week of trading in prior year
  • 2. Excludes IAS 41 movement on biological assets in both years
  • 3. Excludes acquisition related amortisation in both years

FINANCIAL SUMMARY

£M

2019 52 weeks 2018 53 weeks % CHANGE (as reported) % CHANGE (like-for-like)1

Revenue 1,437.1 1,464.5

  • 1.9%
  • 0.2%

Adjusted gross margin 2 13.0% 12.8% +22 bps +23 bps Adjusted operating profjt 2, 3 92.3 92.8

  • 0.5%

+1.8% Adjusted operating margin 2, 3 6.4% 6.3% +9 bps +12 bps Adjusted profjt before tax 2, 3 92.0 92.4

  • 0.4%

+2.0% Adjusted earnings per share 2, 3 144.3p 145.0p

  • 0.5%

+1.9% Dividend per share 55.9p 53.7p +4.1% +4.1%

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SLIDE 7

19 75 7 Year ended 31 March 2019

£M 2019 2018

Cash generated from operations

106.5 127.7

Tax paid

(18.8) (15.6)

Net cash from operating activities

87.7 112.1

Net capital expenditure

(78.0) (58.0)

Acquisitions

(0.8) (5.3)

Loan to joint venture

(2.2) –

Interest paid

(0.4) (0.4)

Share issues

1.8 1.6

Dividend paid

(22.1) (18.2)

Net cash (outfmow) / infmow

(14.0) 31.8

Net funds

6.3 20.6 NET CAPEX (£M) 2019 2018 Fresh pork 18.7 15.1 Convenience 23.2 31.9 Gourmet products 3.9 6.4 Poultry 32.2 4.6 Net capex 78.0 58.0 Capex guidance for FY20 of c£100m NET FUNDS BRIDGE (£M)

A d j u s t e d E B I T D A 100 120 140 80 60 40 20 O p e n i n g W
  • r
k i n g c a p i t a l T a x a t i
  • n
A c q u i s i t i
  • n
s N e t c a p e x D i v i d e n d s O t h e r J V l
  • a
n C l
  • s
i n g 20.6 18.8 11.5 78.0 2.2 2.1 0.8 6.3 22.1 121.2

CASH FLOW

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SLIDE 8

19 75 8 Year ended 31 March 2019

£M 2019 2018

Property, plant & equipment

291.2 237.3

Intangible assets

153.5 156.2

Biological assets

21.3 17.8

Working capital

78.9 71.5

Net funds

6.3 20.6

Tax, grants, provisions, pensions

(16.3) (23.5)

Net assets

534.9 479.9 KEY METRICS 2019 2018

ROCE 1

18.4% 20.3%

Gearing

– –

Interest cover

217x 221x

Dividend cover 2

2.6x 2.7x

1. Adjusted operating profjt divided by the sum of average opening and closing net assets, net debt/(funds), pension liability and deferred tax
  • 2. On adjusted profjt for the year

BALANCE SHEET

Inventories 8.2 Receivables 1.6 Payables (2.4) Net movement 7.4 ROCE lower as expected due to uplift in capital expenditure IFRS 16 to reduce ROCE in FY20 (see Appendix 4 for further details); immaterial impact to Net Assets and PBT

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SLIDE 9

19 75 9 Year ended 31 March 2019

KEY METRICS FOR LAST 5 YEARS

CAGR 12.0%

FREE CASH FLOW (£M) ADJUSTED OPERATING PROFIT1 (£M)

FY181 FY17

50 60 80 60 40 40 20 30 10 20 70 80 90 100 100 120

FY15 FY16 FY15 FY17 FY16

CAGR 2.5% CAGR 2.0%

ADJUSTED OPERATING MARGIN1 ROCE

FY16 FY15 FY17

5.0% 6.0% 5.5% 6.5% 7.0%

FY16 FY15 FY17

16% 17% 18% 19% 20%

5.8 17.0 6.4 18.2 6.1 19.0 58.7 52.7 65.1 83.4 76.1 72.4

FY19 FY182

90.7 92.3 111.7 87.3

FY19 FY19 FY181

6.3 6.4

FY182

20.3 18.4

CAGR 13.4%

FY19

1. 2018 adjusted for 53rd week
  • 2. FY18 included 53 weeks of trading
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SLIDE 10

19 75 10 Year ended 31 March 2019

FREE CASH FLOW NET CAPEX ACQUISITION / (DISPOSAL)2 DIVIDEND PAID CASH INFLOW / (OUTFLOW)1

2019 87.3 78.0 3.0 22.1 (15.8) 2018 111.7 58.0 5.3 18.2 30.2 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) 2014 59.1 27.4 14.4 12.7 4.6 2013 49.0 30.5 5.8 11.4 1.3 2012 43.4 19.9 (14.5) 11.8 26.2 559.0 314.2 72.2 120.7 51.9

  • 1. Excludes the proceeds from the issue of share options
  • 2. Includes loan to joint venture
  • 3. Facility reduces to £120m from November 2022

STRONG CASH GENERATION

BANKING FACILITY

£160m revolving credit facility with four major UK banks Includes committed

  • verdraft of £20m

Option to access further £40m on same terms To November 2023

3

Unsecured

6.3

2017

20.6

2018 2019

CASH GENERATION 2012–2019 (£M) NET FUNDS / (DEBT) (11.0)

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SLIDE 11

19 75 11 Year ended 31 March 2019

RECORD CAPITAL INVESTMENT TO ADD CAPACITY, DRIVE EFFICIENCY AND ENHANCE CAPABILITY

CROWN CHICKEN SUFFOLK CONVENIENCE BARNSLEY & BURY FRESH PORK HULL AGRICULTURE NORFOLK NEW PROCESSING FACILITY EXPANSION OF AGRICULTURAL OPERATIONS COOKED MEATS SITE UPGRADES CONTINENTAL NEW BURY FACILITY HULL EXTENSION SITE UPGRADES PIG HERD EXPANSION INVESTMENT IN POULTRY SUPPLY CHAIN

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SLIDE 12

19 75 12 Year ended 31 March 2019

CRANSWICK PERFORMANCE Year of consolidation Poultry growth Sustainability MARKET TRENDS State of the nation Retailer performance Consumer behaviours OUTLOOK Consolidation Innovation Poultry strategy

COMMERCIAL UPDATE

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SLIDE 13

19 75 13 Year ended 31 March 2019

FOOD VOLUMES IN RETAIL STATIC AND CONSUMERS CONCERNED ABOUT THE ECONOMY

£ GROWTH

+1.4%

INFLATION

+1.5%

POPULATION

+1.0%

ABOUT THE SAME AS NOW WORSE THAN NOW BETTER THAN NOW 0% A U G 1 1 N O V 1 1 F E B 1 2 M A Y 1 2 A U G 1 2 N O V 1 2 F E B 1 3 M A Y 1 3 A U G 1 3 N O V 1 3 F E B 1 4 M A Y 1 4 A U G 1 4 N O V 1 4 F E B 1 5 M A Y 1 5 A U G 1 5 N O V 1 5 F E B 1 6 M A Y 1 6 A U G 1 6 N O V 1 6 F E B 1 7 F E B 1 8 M A Y 1 7 M A Y 1 8 A U G 1 7 A U G 1 8 N O V 1 7 N O V 1 8 F E B 1 9 10% 20% 30% 40% 50% 60% 70%

FOOD PRICE CONCERN IN 12 MONTHS TIME, HOW DO YOU THINK THE ECONOMY WILL BE DOING?

No wage increase

39%

Interest rates

28%

Tax and benefjt changes

27%

House prices 10% Other 10% Food prices

88%

Energy bills

72%

Change in personal circumstance

28%

Job insecurity

26%

Petrol prices

48%

SOURCE: IGD ShopperVista Research; Base: 1000+. All shoppers, February 2019

SOURCE: Kantar Worldpanel 12 w/e 24 March 2019

  • f shoppers say

they are worried about their own fjnances as Brexit proceeds

59%

JAN 2019

59% 56%

JAN 2018
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SLIDE 14

19 75 14 Year ended 31 March 2019

DISCOUNTER AND CONVENIENCE GROWTH CONTINUES TOP 4 PERFORMANCE SUBDUED

  • Total grocery market growth at 2.3% last 52 weeks
  • Growth in Top 4 retailers remains suppressed due

to intense competitive pressure

  • Aldi and Lidl growth continues as consumer

penetration reaches over 60% on a 4 weekly basis*

TOTAL GROCERY £ GROWTH (%) RETAIL MARKET SHARE (GROCERY) (£)

  • 2

2 4 6 8 10 12

ALDI 12.0% 8.8% 4.8% 2.3% 2.1% 1.9% 1.0% 1.0% 0.1%
  • 0.3%
  • 0.6%
LIDL CO-OP ASDA ICELAND TOTAL MARKET SAINSBURY’S TESCO MORRISONS M&S WAITROSE SOURCE: Kantar Worldpanel 52 w/e 24 March 2019 SOURCE: *IGD Retail Analysis September 2018

CORPORATE ACTIVITY

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SLIDE 15

19 75 15 Year ended 31 March 2019

+1.4%

CONSUMER DRIVERS REMAIN FOCUSED ON PREMIUM, CONVENIENCE AND HEALTH

OF FOOD SERVINGS ARE NOW CHOSEN FOR HEALTH TRYING TO BE MORE HEALTHY

31% 81%

MEAL OCCASIONS GROWTH LAST 3 YEARS 48% MEAT & 2 VEG

+6%

  • 9%

Easy to prepare and clean up Relevant fmavours Afgordable Premium performing ahead Premium = Quality, provenance and animal welfare Clear difgerentiation between tiers A key driver of choice Sources of protein Fat, salt and sugar reductions HEALTH IMPORTANT PREMIUM AHEAD OF MARKET MAKING MEALS CONVENIENT

OWN LABEL TIERS

+5.6% +2.5%

SOURCE: Kantar Worldpanel 52 w/e 24 March 2019 SOURCE: Kantar Event February 2019 SOURCE: Kantar Event February 2019 ECONOMY TIER STANDARD TIER PREMIUM TIER

52% RECIPE DISHES :

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SLIDE 16

19 75 16 Year ended 31 March 2019

OUT OF HOME SPEND CONTINUES TO GROW

FAST & FLEXIBLE OUTLETS DRIVING GROWTH

£3.1bn

Cofgee specialists

£2.8bn

Convenience, forecourt and

  • ther retailers

£1.4bn

Supermarket Food-to-go and Café

£16.1bn*

Branded casual dining

£5.6bn

Quick Service Restaurants

£4.9bn

Food-to-go specialists

KEY CHANNELS FOR CRANSWICK

MARKET SIZE GROWTH SOURCE: Market size IGD 2018 except * MCA 2018. Growth Kantar Out of Home Panel March 2019 except * MCA 2018

+8.2% +10.4% +7.2% +7.2% +4.8%* +1.6%

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SLIDE 17

19 75 17 Year ended 31 March 2019

VOLUME GROWTH IN CHICKEN AND PORK CATEGORIES

RETAIL CATEGORY VOLUME 000 TONNES Growth YOY SHARE FRESH PRIMARY CHICKEN 468 4.8% 26.2% COOKED CHICKEN 93 0.3% 5.2% ADDED VALUE FRESH CHICKEN 77

  • 1.2%

4.3% FURTHER PROCESSED CHICKEN & BURGERS 68 2.2% 3.8% TOTAL CHICKEN 705 3.2% 39.5% FRESH BACON & GAMMON 209

  • 2.0%

11.7% FRESH PRIMARY PORK 149

  • 0.4%

8.4% FRESH SAUSAGES 146 2.6% 8.2% FRESH SLICED COOKED HAM 133 0.5% 7.4% RTC/SC PORK/BURGERS 20 7.3% 1.1% PORK MARINADES VOLUME 9 17.9% 0.5% TOTAL PORK 666 0.4% 37.3% FRESH PRIMARY BEEF 269

  • 3.2%

15.1% FRESH BEEF BURGERS & GRILLS 31 17.3% 1.7% TOTAL BEEF 300

  • 1.0%

16.8% FRESH PRIMARY LAMB 62

  • 9.3%

3.4% FRESH PRIMARY OTHER PROTEIN 50 5.0% 2.8% MEAT SUBSTITUTES 14 15.7% 0.8% TOTAL PROTEIN VOLUME 1,784 0.9% 100.0%

UK RETAIL AVERAGE PRICE/KG CATEGORY PERFORMANCE

6.21 6.16 FRESH MEAT FRESH POULTRY 4.11 4.06 FRESH PORK 4.64 4.58 FRESH BEEF 7.81 7.85 FRESH LAMB 9.03 9.58 MEAT SUBSTITUTES 8.13 8.86 MARCH 2018 MARCH 2019 SOURCE: Kantar Worldpanel 52 w/e 24 March 2019

22.6 2.7 2.3 2.2

  • 3.0
  • 5.8

GROWTH

  • 5
5 10 15 20 25 BEEF LAMB CHICKEN PORK CATEGORIES OTHER MEAT MEAT SUBSTITUTES

+3.2% +0.4% +5.0% +15.7%

  • 1.0%
  • 9.3%
ACTUAL VOLUME GROWTH / DECLINE ‘000 TONNES
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SLIDE 18

19 75 18 Year ended 31 March 2019

CRANSWICK PERFORMANCE

SALES PERFORMANCE BY CATEGORY

*SOURCE: Kantar Worldpanel, 52 w/e 24 March 2019 NOTES: (i) Excludes the impact of 53rd week in the prior year (ii) Total Fresh Pork sales -3.8%, volume -4.6% (iii) Convenience comprises Cooked Meats and Continental Foods (iv) Gourmet Products comprises Sausage, Bacon and Pastry (v) Poultry comprises Fresh and Cooked Poultry

CRANSWICK SALES (i)

ANNUAL SALES 2018-19

MARKET*

ANNUAL SALES 2018-19

CATEGORY CHANGE CHANGE VALUE VOLUME VALUE VOLUME Fresh Pork Retail (ii)

  • 0.2%

+0.7%

  • 0.6%

+0.5% Convenience (iii)

  • 1.2%
  • 0.8%

+2.4% +0.8% Gourmet Products (iv)

  • 3.3%
  • 1.7%

+2.6%

  • 0.5%

Poultry (v) +18.0% +14.2% +5.1% +3.8%

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SLIDE 19

19 75 19 Year ended 31 March 2019

PUTTING SUSTAINABILITY AT THE HEART OF THE BUSINESS

TIER 1 2016, 2017 & 2018 ENERGY, WATER, FOOD & PACKAGING PROJECTS >650 TONNES PLASTIC REMOVED 100% RENEWABLE GRID SUPPLIED ELECTRICITY TOP 5 UK PROCESSOR REPORTING FOOD LOSS & WASTE EMPLOYEE AND COMMUNITY ENGAGEMENT

USE LESS WASTE LESS ENGAGE EMPLOYEES WORK WITH OUR COMMUNITIES DO THE RIGHT THING
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SLIDE 20

19 75 20 Year ended 31 March 2019

COMMERCIAL OUTLOOK

INNOVATION Premium Convenience Health CONSOLIDATION Global demand for pork Long-term contracts New business wins POULTRY STRATEGY Commissioning Eye Major contract win Growth category

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SLIDE 21

19 75 21 Year ended 31 March 2019

GUIDING PRINCIPLES STRATEGIC PILLARS

CONSOLIDATION

DRIVING THE CORE

DIVERSIFICATION

EXPANDING OUR OFFER

INTERNATIONAL

DEVELOPING NEW OPPORTUNITIES

HIGH QUALITY PRODUCTS SALES GROWTH SUSTAINABILITY

PEOPLE INNOVATION

OPERATING EXCELLENCE

STRATEGY & BUSINESS MODEL PURPOSE

FEEDING THE NATION WITH AUTHENTICALLY MADE, SUSTAINABLY PRODUCED FOOD; CREATED WITH PASSION

QUALITY VALUE

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SLIDE 22

19 75 22 Year ended 31 March 2019

SALES GROWTH HIGH QUALITY PRODUCTS OPERATING EXCELLENCE SUSTAINABILITY

Strong sales growth to discount retailers Long-term relationships Building additional capacity Second Nature initiative Recycling and packaging pledges Waste reduction and energy effjciency commitments Record capital expenditure to enhance capability Investment in agricultural

  • perations

Stronger throughput drives

  • perating effjciencies

Focus on premium Business wins based on quality Strong innovation pipeline

CONSOLIDATION

DRIVING THE CORE BUSINESS

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SLIDE 23

19 75 23 Year ended 31 March 2019

  • £7.6 million invested in farming infrastructure

to expand pig herd

  • £2.2 million invested in White Rose Farms

joint venture to secure effjcient pig supply

  • New lease acquired to secure further

milling capacity

  • State-of-the-art housing and feeding

facilities installed

  • New breeding accommodation improves

animal welfare

  • New livestock trailers minimise stress on

animals by improving the loading process

CONSOLIDATION

INVESTING IN AGRICULTURE

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SLIDE 24

19 75 24 Year ended 31 March 2019

Strong growth category New, class-leading poultry facility Long-term contract secured with Morrisons Integrated supply chain Low food miles improving bird welfare Water recycling and energy effjciencies Increased throughput drives

  • perating effjciencies

Optimise value of whole birds and portions Effjciency through farm-to-fork model Focus on premium tier Fresh, marinated and ‘Ready to Cook’ products Retail and

  • ut of home ranges

DIVERSIFICATION

SIGNIFICANT GROWTH POTENTIAL THROUGH POULTRY STRATEGY

SALES GROWTH HIGH QUALITY PRODUCTS OPERATING EXCELLENCE SUSTAINABILITY

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SLIDE 25

19 75 25 Year ended 31 March 2019

  • Construction of new industry leading facility

in Eye, Sufgolk, continuing to plan

  • Investment in new facility increased to £75m

incorporating additional cutting line

  • Latest technology and advanced equipment

lifts capacity from 0.5m to 1.2m birds per week

  • Further investment in agricultural operations

to support expansion of poultry business

  • Long term supply agreement with Wm

Morrison Supermarkets plc secured and project fast tracked to facilitate contract

  • Incorporates highest animal welfare standards
  • Start up and commissioning costs expected

in FY20

DIVERSIFICATION

INVESTING IN POULTRY

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SLIDE 26

19 75 26 Year ended 31 March 2019

Strong Far East volume growth Impact of African Swine Fever Developing direct relationships Higher welfare a key difgerentiator Emerging markets Develop international

  • perations

Effjcient production

  • f 5th quarter

Multiple accreditations Shanghai offjce Reputation of British

  • utdoor bred pork

Pre packed, higher welfare products for China Prime cuts to Europe, Japan and Australia

SALES GROWTH HIGH QUALITY PRODUCTS OPERATING EXCELLENCE SUSTAINABILITY

INTERNATIONAL

EXPANDING OUR FOOTPRINT

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SLIDE 27

19 75 27 Year ended 31 March 2019

  • African Swine Fever fjrst reported in China

in August 2018

  • Disease spread across China, afgecting both

large scale and backyard farms

  • Neighbouring countries now impacted with

disease spread to Vietnam

  • Production losses are expected to be 10-35%

in 2019. A 20% decline is equivalent to the annual production in the US

  • Pork supply expected to tighten for the

medium term

  • Pork prices are rising as Chinese import

demand increases

  • Poultry consumption is expected to increase

and prices reach record highs

SOURCE: Rabobank April 2019 Provinces with reported ASF outbreaks, with restriction Provinces with reported ASF outbreaks, restriction partially removed

INTERNATIONAL

AFRICAN SWINE FEVER

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SLIDE 28

19 75 28 Year ended 31 March 2019

PIG CROP U.K. GERMANY EAST PACIFIC NORTH AMERICA CHINA EAST ASIA SOURCE: USDA/AHDB 2018

THE UK IS 54% SELF-SUFFICIENT IN PIG MEAT PRODUCTION

180M

11M

57M

42M 36M

684M*

54%

*ASF OUTBREAK IN CHINA REDUCED HERD BY EST. 10-35%

GLOBAL PIG MEAT FORCES

ANNUAL PROCESSING NUMBERS BY REGION

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SLIDE 29

19 75 29 Year ended 31 March 2019

FRESH AND READY TO COOK PORK BACON & GAMMON SAUSAGE ADDED VALUE PORK SLICED COOKED HAM FRESH PRIMARY CHICKEN ADDED VALUE CHICKEN COOKED CHICKEN FRESH BEEF FRESH LAMB OTHER MEAT MEAT SUBSTITUTES

36% 33% 22% 5% 3% 1%

MARKET OVERVIEW

EXPENDITURE SHARE BY PROTEIN (£)

SOURCE: Average weekly Pig Price and Wheat Price: AHDB May 2019 Average Price and % share of expenditure Kantar Worldpanel 52 w/e 24 March 2019 6.21 6.16 MEAT SUBSTITUTES FRESH BEEF FRESH MEAT FRESH PORK FRESH POULTRY 4.11 4.06 4.64 4.58 7.81 7.85 FRESH LAMB 9.03 9.58 8.13 8.86

UK RETAIL AVERAGE PRICE/KG

18% 4% 7% 4% 7% 2% 11% 6% 10% 22% 5%

WHEAT PRICE 2016-2019

80 100 120 140 160 180 200 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19

AVERAGE WEEKLY EU SPEC PRICES

2017 2016 2015 2014 2010 2011 2012 2013 Price per Kg

120 150 170 130 160 180 110 140 100 90 80
  • AV. EU

SPP DAPP 2018 2019 3% 1%

MARCH 2018 MARCH 2019
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SLIDE 30

19 75 30 Year ended 31 March 2019

SUSTAINABLE PROTEIN

  • Pork and chicken carbon footprint much lower

than lamb and beef

  • Carbon footprint assessment at Wayland Farms

shows our carbon performance is better than industry average

  • Refrigeration system upgrades using ammonia

are signifjcantly more environmentally friendly

  • Investment in CHP systems reduces
  • ur carbon footprint
  • All grid supplied electricity from

renewable sources

45

39.2

Kg CO2e

Kilogram (Kg) of consumed food

27.0 Lamb Beef Cheese Pork Farmed Salmon Turkey Chicken Canned tuna 13.5 12.1 11.9 10.9 6.9 6.1

40 15 35 10 30 5 25 20 Post-production emissions (includes processing, transport, retail, cooking and waste disposal) Production emissions (includes emissions before product leaves the farm plus avoidable and unavoidable waste)

SOURCE: Business Insider
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SLIDE 31

19 75 31 Year ended 31 March 2019

Results in line in a challenging environment Strong balance sheet and cash generation Strong Poultry and Continental sales growth Investment in class-leading poultry facility Expansion of vertical supply chain Record capital expenditure Investing for future growth Pork and chicken competitively priced Leading the sustainability challenge

Strong Performance

“We are confident in the long-term success and further development of the Group, which is supported by our long-standing customer relationships, breadth and quality

  • f products, robust financial position and industry leading asset infrastructure.”

Ongoing Investment Positive Outlook

SUMMARY AND OUTLOOK

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SLIDE 32

19 75 32 Year ended 31 March 2019

1970s

Established Agri-Food business (animal feed)

2003

Sandwich Factory

2013

Pig rearing business – outdoor reared pigs

1980s

Move into food production

2004

Jack Scaife’s – dry cured air dried bacon

2014

Benson Park – premium cooked poultry

1992

FT Sutton’s Deli Cooked Meats

2005

Perkins Chilled Foods – sliced cooked meats

2016

Crown Chicken – integrated chicken processor

1995

Simply Sausages – Gourmet Sausage

2009

Bowes of Norfolk – primary processing

2016

Sale of Sandwich Factory

2001

Continental Fine Foods

2010

Yorkshire Baker – Gourmet Pastry

2016

Ballymena – primary processing

2018

New Continental Foods site in Bury

2019

New chicken processing facility in Sufgolk

APPENDIX 1

OUR HISTORY

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SLIDE 33

19 75 33 Year ended 31 March 2019 32% 35% 19% 14%

CATEGORY PROFILE % OF GROUP REVENUE

Fresh Pork Convenience Gourmet Products Poultry

HULL Fresh Pork, Preston Fresh Pork, Riverside Cooked Meats, Sutton Fields Gourmet Sausages, Lazenby’s Added Value Poultry, Benson Park MALTON Gourmet Pastry, Yorkshire Baker SHERBURN Gourmet Bacon, Sherburn-in-Elmet BARNSLEY Cooked Meats, Valley Park NORTHERN IRELAND Fresh Pork, Ballymena BURY New Continental Foods site, Roach Bank MANCHESTER Continental Foods, Guinness Circle DENBIGH Food Service, Colomendy EAST ANGLIA Fresh Pork and Sausages, Watton Crown Chicken, Weybread and Kenninghall MILTON KEYNES Cooked Meats, Delico Agriculture Pig and Poultry Production Heartland

DENBIGH MILTON KEYNES SHERBURN MALTON HULL MANCHESTER WEYBREAD EYE BARNSLEY WATTON BALLYMENA BURY
  • c10,300 employees across

Group

  • 15 food manufacturing

facilities New poultry site at Eye in Sufgolk

  • 2 animal feed mills
  • 3 farming businesses
  • In house logistics

– Livestock fmeet investment – Chill chain distribution

  • Over £320m capital

investment in last 8 years

APPENDIX 2

OUR LOCATIONS

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SLIDE 34

19 75 34 Year ended 31 March 2019

APPENDIX 3

ADJUSTED & REPORTED EARNINGS; TAX & EARNINGS PER SHARE

ADJUSTED & REPORTED EARNINGS £M 2019 2018 Adjusted operating profjt 92.3 92.8

Net IAS 41 movement

(2.8) (2.2)

Acquisition related amortisation

(2.7) (2.2) Operating profjt 86.8 88.4 Profjt before tax 86.5 88.0 Profjt after tax 69.6 70.0 TAX % 2019 2018 Headline tax rate 19.0 19.0 Disallowed expenses 0.6 1.4 Deferred tax rate change 0.1 0.3 Prior year adjustments / other (0.2) (0.2) Efgective tax rate 19.5 20.5 EARNINGS PER SHARE PENCE 2019 2018 Adjusted 144.3 145.0 Acquisition related amortisation (5.4) (4.3) Net IAS 41 movement (5.4) (4.3) Tax impact 2.0 1.4 On profjt for the year 135.5 137.8

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SLIDE 35

19 75 35 Year ended 31 March 2019

APPENDIX 4

IFRS 16 IMPACT ON FINANCIAL STATEMENTS

£M Operating lease cost decrease 7.8 Efgect on EBITDA 7.8 Depreciation increase (7.0) Efgect on operating profjt 0.8 Interest charge increase (1.0) Efgect on PBT (0.2) Assets to increase at transition date 40.0 Liabilities to increase at transition date (40.0) Overall efgect on net assets – Operating profjt increases due to reallocation

  • f interest element of operating lease charge

to interest charge Profjt before tax decreases due to holding a relatively new lease portfolio – interest costs are therefore higher in the early years of the lease No material impact to PBT or Net Assets of current leases

  • Right of use asset and lease liability will be recognised

in the balance sheet

  • Lease liability is the discounted minimum lease payments

at the transition date – On transition the discount rate is based on the Group cost of debt – Rates for future leases will be determined based on the rate applicable at commencement of the lease The Group will be using the modifjed retrospective, asset equals liability, transition approach

  • No impact to previously reported equity
  • No restatement of the previous reported period
  • Transition impact confjned to FY20

Around 200 operating lease contracts have been individually reviewed

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SLIDE 36