Iglo Group. Investor Conference Call Q Update Thursday 27 th August 2015

Transcription

1 Iglo Group Investor Conference Call Q Update Thursday 27 th August 2015

2 Disclaimer BY READING THIS PRESENTATION, YOU ARE DEEMED TO HAVE READ AND ACCEPTED THE STATEMENT BELOW. This presentation has been prepared by Iglo Foods Holdings Limited. This presentation provides information about Iglo Foods Holdings Limited and its subsidiaries. Any references to Iglo shall mean Iglo Foods Holdings Limited and its subsidiaries. While Iglo takes reasonable care to ensure the accuracy of the information in this presentation, it makes no representation or warranty, express or implied, of its accuracy or completeness. This presentation has not been the subject of an audit or a similar investigation. Iglo shall not be held responsible for any direct or indirect losses, damages or liabilities of whatsoever kind arising from the access to, the use of or reliance on this presentation or any of the information it contains. Iglo reserves the right to change, delete or move any of the material in this presentation at any time without notice. The information contained in this presentation should not be deemed accurate or current except as of the date of issue. Iglo does not intend to, and does not undertake any duty to, update or correct such information. This presentation may contain financial information regarding the businesses and assets of Iglo and such financial information may not have been audited, reviewed or verified by any independent accounting firm. In addition, this presentation may include information pertaining to Iglo s markets and its competitive positions therein; such information is based on management estimates. It is not the intention to provide, and you may not rely on these materials as providing, a complete or comprehensive analysis of Iglo s financial or trading position or prospects. Any use of this presentation by you for any purpose whatsoever will be entirely at your own risk. This presentation may include projections, estimates, forecasts, targets, prospects, statements and/or opinions with respect to the anticipated future performance of Iglo. Such projections, estimates, forecasts, targets, prospects, statements and/or opinions reflect significant assumptions and subjective judgments by Iglo s management concerning anticipated results. These assumptions and judgments may or may not prove to be correct and there can be no assurance that any projections, estimates, forecasts, targets or prospects are attainable or will be realised. Accordingly, neither Iglo nor any of their respective directors, partners, employees or advisers nor any other person, shall give any representation or warranty as to achievements or reasonableness of future projections, estimates, forecasts, targets or prospects, nor will they be liable for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on any statement or opinion in, or omission from, this presentation and any such liability is expressly disclaimed. Past results are no indication as to future performance. No representation or warranty, express or implied is or will be given by Iglo or its respective affiliates, directors, partners, employees or advisers or any other person as to the accuracy completeness or fairness of this presentation and, so far as permitted by law and except in the case of fraud by the party concerned, no responsibility or liability whatsoever is accepted for the accuracy or sufficiency thereof or for any errors, omissions or misstatements negligent or otherwise relating thereto. This presentation contains information from other sources (for example, Euromonitor) which are not controlled or maintained by Iglo. Iglo is not responsible for the accuracy of this information. The information contained in this presentation is not intended to be and shall not be deemed to be an offer, invitation or inducement to invest in or otherwise deal in any securities of Iglo or in any other investment, nor to provide or constitute any advice or recommendation in connection with any investment decision. This presentation is not directed to, or intended for distribution to, directly or indirectly, or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration, licensing or other permission within such jurisdiction. If you require advice, please consult your independent professional financial adviser. The copyright in this presentation belongs to Iglo. All other intellectual property rights are reserved. 2

3 Today s presenters Stéfan Descheemaeker Iglo Group CEO Paul Kenyon Iglo Group CFO 3

4 Q2 and H performance highlights Q2 Reported Net Revenue decline was (3.9)%. Allowing for currency impacts, the exit from Romania, Slovakia and Turkey and the timing of Easter like-for-like Net Revenue decline was (6.1)% The performance was driven by a tough retail environment across our 3 major markets Continued strong growth seen in Portugal and Netherlands Gross margin declined by (1.5)pp driven by promotional investment A&P and Indirects in line with prior year (excluding the impact of translational FX) Wholegrain platform performing well across continental Europe Breakfast Q Net Revenues in line with expectations with a good level of household penetration after 3 months Q EBITDA was 60.2m, (14.9%) down year-on-year H1 Reported Net Revenue decline year-on-year was (2.4%). Allowing for currency impacts, the exit from Romania, Slovakia and Turkey and 1 less trading day year-on-year like-for-like Net Revenue decline was (4.9)% Reported EBITDA was in line with last year as the Net Sales decline was offset by lower A&P (overlapping significant one-time strategic launch activity in H1 14) and FX benefit LTM cash conversion of 91% is in line with strategic targets De-leverage from 4.6x to 3.6x net debt from December to June, following debt paydown as part of Nomad acquisition Negative working capital for six consecutive months LTM EBITDA in line with last year at 305.0m Note: EBITDA excludes exceptional items. All financials quoted exclude Nomad Foods Ltd expenses. 4

5 Q2 Performance Highlights 5

6 Evolving our approach Focus on: Saving to reinvest Organisation capability and structuring for success Renovation and innovation Best in class revenue and customer management skills Swift and effective integration of acquisitions, current and future 6

7 DE wholegrain launch: Strong Distribution and Penetration Build Portfolio: Wholegrain Fish Fingers Wholegrain Fish Bakes % Weighted Distribution w 49 w 51 w1 w3 w5 w7 w9 w11 w13 w15 w17 w19 w21 w23 w % Household Penetration Wholegrain Nuggets Wholegrain Filegro Iglo WG Fish Fingers Iglo WG Fish Bakes 7

8 Q2 Financial Performance

9 Iglo Group: Continued Tough Retail Environment in Q2 m Q2/14 Q2/15 Delta Net Revenue Gross Profit Gross profit margin (%) 35.6% 34.1% -1.5% A&P A&P (% Net revenues) 8.5% 8.9% 0.4% Indirects Indirects (% Net revenues) 9.3% 9.9% 0.6% Depreciation EBITDA EBITDA margin (%) 19.7% 17.4% -2.2% EBITDA FX rate LTM Cash flow available for debt servicing Comments Reported Net Revenue decline was (3.9)%. Allowing for currency impacts, the exit from Romania, Slovakia & Turkey and the shift of Easter timing like-for like Net Sales declined (6.1)% The performance was driven by a tough retail environment across our 3 major markets: UK - discounter growth has reduced footfall in traditional retailers, who have responded by increasing support for private label. In response to this, we continue to focus on our Category management capabilities to drive overall Category growth Germany hard discounters continued to gain share through extending their ranges into more added-value products in frozen. Traditional retailers have responded by expanding their added-value private label offerings and prioritizing promotions to support these ranges Italy - annual negotiations took longer to conclude than expected, resulting in reduced promotional slots Total Market value grew 0.5%, with Iglo value share declining (71)bps, however volume share loss was lower at (30)bps, as increased promotional activity maintained our relevance and hence consumption Gross margin decline of (10.2)m/(1.5)pp is mainly driven by investment in promotional activity Reported Indirect costs were 0.8m higher than last year due to FX LTM EBITDA is 305.0m Note: EBITDA excludes exceptional items. Financials as per management accounts. Market data obtained from Nielsen/IRI. All financials quoted exclude Nomad Foods Ltd expenses. 9

10 2015: Q2 Net Sales Bridge Net Sales LFL: (6.1%) FX One-off Market Retailer Portfolio Note: Financials as per management accounts. All financials quoted exclude Nomad Foods Ltd expenses. 10

11 2015: Q2 Gross Profit Bridge Gross Margin: (150)bps 35.6% FX Vol/Mix Net Pricing 34.1% Note: Financials as per management accounts. All financials quoted exclude Nomad Foods Ltd expenses. 11

12 Iglo Group: EBITDA flat Year-on-Year in H1 m YTD 2014 YTD 2015 Delta Comments Net Revenue Gross Profit Gross profit margin (%) 34.7% 34.5% -0.2% A&P A&P (% Net revenues) 8.5% 7.7% -0.8% Indirects Indirects (% Net revenues) 9.1% 9.5% 0.4% Depreciation EBITDA EBITDA margin (%) 19.0% 19.3% 0.3% Reported Net Revenue decline year-on-year was (2.4)%. Allowing for currency impacts, the exit from Romania, Slovakia & Turkey and the impact of one less trading day like-for-like Net Sales declined by (4.9)%. The drivers of the Net Sales decline are the same as were observed in Q2 Gross margin has been held broadly flat despite investment in promotions by margin accretive innovation, positive mix and supply chain continuous improvements A&P is driven by the non-recurrence of costs associated with the development of the new strategy in 2014 (production of new campaign and new packaging design), the savings delivered by the new media deal and the change to the promotional model in France Reported Indirect costs were 1.7m higher than last year due to FX EBITDA margin 19.3% is close to the strategic target of 20% EBITDA FX rate LTM Cash flow available for debt servicing Note: EBITDA excludes exceptional items. Financials as per management accounts. All financials quoted exclude Nomad Foods Ltd expenses. 12

13 Cash Flow Generation Remains Strong m YTD/14 YTD/15 Delta EBITDA before non-recurring (@ act. FX rate) (1.2) Working capital movement Pensions & other cash flows (0.8) (1.6) (0.8) Capital expenditure (6.0) (7.9) (1.9) Tax (6.4) (18.7) (12.3) Operating cashflow (10.7) Restructuring & non-recurring (non-capital) Payments made under Management (8.9) - (8.3) (51.2) 0.6 (51.2) Incentive Schemes upon sale of Group Cashflow available for debt servicing (61.3) Net interest paid (53.0) (43.9) 9.1 Cashflow available for debt repayment (52.2) Issuance of new share capital Repayment of principal (129.2) (490.0) (360.8) Net cash flow (51.0) (136.2) (85.2) Operating cash flow conversion (1) 95% 91% (4%) Gross External Debt (2) (1,726.3) (1,196.1) Net Cash Net Debt (1,458.2) (1,105.4) Net Debt: EBITDA 5.0x 3.6x (1) Defined as (LTM cash generated from operations capex)/ltm EBITDA before NR. (2) Gross external debt is calculated as the total of 3rd party senior debt, senior secured notes. All data is unaudited. 13

14 Q&A 14