Slide presentation Q4 FINAL - 2sfg.com · 2 The comparative Q4 2015 results have been restated to...

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

VarianceQ3 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

0

10

20

30

40

50

60

70

EBITDAQ4 2015-16

Working capitalmovement

Pensions Exceptionals Interest and taxpaid

Capex (net) Financeleases

(net outflow)

Cash inflow Q42015-16

£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

on 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


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


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 (£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


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


Variance


Revenue (£m) 92.7 88.3 5.0%



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 (£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


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



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


Variance


Revenue (£m) 602.8 596.5 1.1%


EBITDA (£m)2 42.7 36.4 17.3%

Appendix IV – Branded Full Year Performance

2015-16 Branded


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



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


Variance


Revenue (£m) 390.4 376.2 3.8%


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

on 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

of external bond

notes

Derivative

FV

Fixed assets

deemed cost

Reclass of

Pension

Deferred tax

TaxInventory

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)

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