Exhibit 99.2
PREMIER
FOODS
FIRST QUARTER RESULTS TO 31ST MARCH 2003
(UNAUDITED)
LONDON, 16TH MAY: Premier Foods today announces first quarter results with
continuing net sales of (pound)217.1m and continuing operating profit before
exceptional items of (pound)14.8m. This reflects an increase in continuing net
sales of 2.6% in operating profit before exceptional items of 12.1%.
Continuing EBITDA for the quarter was (pound)21.5m, which is up by 17.5% over
the comparable period last year and the EBITDA margin for the business has
increased from 8.6% to 9.9%. The growth in EBITDA in the first quarter is the
result of the inclusion of the Nestle business with the like for like grocery
business broadly flat and MBM slightly behind last year.
The decline in the MBM potato business was the result of significant price
deflation in the market, of around 13%, and the subsequent tight margins. These
conditions are likely to continue until the mid year at which point we
anticipate improved market pricing.
The like for like grocery business has been static in the first quarter, which
is a reflection of a slow post Christmas market and a significant incremental
investment in our drive brands of (pound)1m.
We remain confident of delivery against our targets for the full year as we
continue to realise the synergies from the Nestle business, profit growth from
the core grocery business and branded sales growth in line with our strategy.
TRADING REVIEW
Turnover for the business increased by 2.6% to (pound)217.1m with total branded
sales up by 18.7%. Like for like branded sales, i.e. excluding sales of those
brands acquired from Nestle, were up by 1.7% with own label sales declining in
line with our expectations.
Sales in our chocolate beverages business declined slightly in the first quarter
in line with the market. Trading proved difficult with promotional sales uplifts
lower than anticipated reflecting the slow trading post Christmas. Our tea
business continued to perform in line with expectations with sales of Typhoo tea
at the same level as last year, offset by an anticipated reduction in own label
sales due to contract losses. As a consequence, margins from this business were
well up.
Trading in our canned foods, pickles and sauces business has been good with
sales growth in line with our expectations. Turnover for this business was up by
10.1%, at (pound)94.2m, with total branded sales up by 32.8%. Like for like
branded sales, i.e. excluding sales of those brands acquired from Nestle, were
PREMIER FOODS PLC
FIRST QUARTER RESULTS TO 31ST MARCH 2003
up by 3.3%. During the quarter, we invested an additional (pound)1m behind our
Loyd Grossman range of cooking sauces, principally on above the line activity.
Coupled with a strong promotional programme this has resulted in sales growth of
79% on the same period last year. Future periods will see investment spend
returning to more normal levels.
The fragmented preserves sector remains competitive. The launch of Hartley's
Best is progressing well although sales for the first quarter, excluding Nestle,
are behind last year. This is due to the adoption of a different promotional
strategy, pushing for value not volume, with reduced levels of account marketing
spend. This approach along with positive changes in mix and continued
improvements in manufacturing efficiency has resulted in improved margins in
this business.
Operating profits before exceptional items at (pound)14.8m for the first quarter
were 12.1% ahead of last year. Excluding the Nestle acquisition, operating
profits before exceptional items declined by (pound)1.5m to (pound)11.8m. The
non-operating exceptional profit of (pound)1.6m is profit on the sale of an
excess piece of land at our tea manufacturing site.
Robert Schofield, Premier Foods' Chief Executive, said
"I am pleased to report that despite difficult trading conditions, our strategy
continues to drive branded sales growth and enhance the quality of our earnings,
while the benefits of the manufacturing restructuring continue to flow through.
We continue to focus on leveraging the synergies available to us, both in
respect of the manufacturing platform and the product portfolio.
The food manufacturing sector remains highly competitive but with the quality of
our brands and level of investment behind them along with the people in our
business, I am confident that we will continue to grow and develop Premier
Foods."
THIS PRESS RELEASE CONTAINS CERTAIN FORWARD LOOKING STATMENTS THAT ARE SUBJECT
TO KNOWN AND UNKOWN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY SUCH STATEMENTS. SUCH RISKS
AND UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO, THE RISK FACTORS IN THE
COMPANY'S ANNUAL REPORT ON FORM 20-F AND OTHER FILINGSWITH THE U.S. SECURITES
AND EXCHANGE COMMISSION.
"EBITDA", A NON-STATUTORY MEASURE OF OPERATING PERFORMANCE, IS DEFINED HEREIN,
IN RESPECT OF ANY PERIOD, AS THE CONSOLIDATED OPERATING PROFITS BUT BEFORE:
OPERATING, NON-OPERATING AND EXCEPTIONAL ITEMS; THE AMORTISATION OF GOODWILL AND
OTHER INTANGIBLE ASSETS, DEPRECIATION, NET INTEREST CHARGES AND ONY OTHER
NON-CASH INCOME AND NON-CASH CHARGES. EBITDA MARGIN IS EBITDA STATED AS A
PROPORTION OF NET SALES.
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PREMIER FOODS PLC
FIRST QUARTER RESULTS TO 31ST MARCH 2003
ENQUIRIES:
- ----------
Paul Thomas
Finance Director
+44-(0)-1727 815850
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PREMIER FOODS PLC
GROUP PROFIT & LOSS ACCOUNT
THREE MONTHS TO 31ST MARCH
2003 2002
(UNAUDITED) (UNAUDITED)
(pound)M (pound)M
Net sales:
Continuing Operations 217.1 211.5
Discontinued Operations 0.0 0.2
------------------ -----------------
217.1 211.7
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Cost of sales
Continuing Operations 165.0 164.6
Discontinued Operations 0.0 0.2
------------------ -----------------
165.0 164.8
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GROSS PROFIT
Continuing Operations 52.1 46.9
Discontinued Operations 0.0 0.0
------------------ -----------------
52.1 46.9
------------------ -----------------
Selling & Distribution
Continuing Operations 29.2 25.6
Discontinued Operations 0.0 0.0
------------------ -----------------
29.2 25.6
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Administration
Continuing Operations 8.1 8.1
Discontinued Operations 0.0 0.1
------------------ -----------------
8.1 8.2
------------------ -----------------
OPERATING PROFIT BEFORE EXCEPTIONAL ITEMS
Continuing Operations 14.8 13.2
Discontinued Operations 0.0 (0.1)
------------------ -----------------
14.8 13.1
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Operating exceptional items 0.0 (1.0)
Non operating exceptional items 1.6 0.0
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PROFIT BEFORE INTEREST AND TAXATION 16.4 12.1
Net interest payable (11.1) (9.3)
Revaluation of US dollar bond (5.0) (3.0)
Amortisation of debt issue costs (1.5) (1.1)
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Total interest payable (17.6) (13.4)
------------------ -----------------
LOSS BEFORE TAXATION (1.2) (1.3)
Total taxation benefit / (expense) 0.7 (0.2)
------------------ -----------------
LOSS BEFORE TAXATION (0.5) (1.5)
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PREMIER FOODS PLC
GROUP PROFIT & LOSS ACCOUNT
THREE MONTHS TO 31ST MARCH
2003 2002
(UNAUDITED) (UNAUDITED)
(pound)M (pound)M
Analysis of Operating Profit
Continuing Operations 14.8 13.2
Discontinued Operations 0.0 (0.1)
----------------- -----------------
14.8 13.1
----------------- -----------------
DEPRECIATION & AMORTISATION
Continuing Operations 6.7 5.1
Discontinued Operations 0.0 0.0
----------------- -----------------
6.7 5.1
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EBITDA
Continuing Operations 21.5 18.3
Discontinued Operations 0.0 (0.1)
----------------- -----------------
21.5 18.2
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ANALYSIS OF NET SALES
Canned foods, pickles & sauces 94.2 85.5
Beverages 40.0 44.0
Spreads 46.7 40.1
----------------- -----------------
Grocery Products 180.9 169.6
Potatoes 36.2 41.9
----------------- -----------------
Continuing operations 217.1 211.5
Discontinued operations - 0.2
----------------- -----------------
Total 217.1 211.7
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PREMIER FOODS PLC
GROUP NET LIABILITIES
31ST MARCH 31ST DECEMBER
2003 2002
(UNAUDITED)
(pound)M (pound)M
Fixed Assets
Intangible assets 112.4 113.9
Tangible assets 132.6 135.1
Investments 0.2 0.2
----------------- -----------------
245.2 249.2
Current Assets
Stocks 110.5 111.3
Debtors
Within 1 Year 137.1 133.5
Greater than 1 Year 8.6 9.0
Cash at bank 30.2 43.5
----------------- -----------------
286.4 297.3
Current Liabilities
Bank loan and overdrafts 24.1 24.5
Trade creditors 142.6 138.4
Provision for corporate tax 11.6 12.4
Other current liabilities 22.9 42.3
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201.2 217.6
----------------- -----------------
NET CURRENT ASSETS 85.2 79.7
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TOTAL ASSETS LESS CURRENT LIABILITIES 330.4 328.9
Other non current liabilities
Borrowings 465.4 464.7
Other creditors 0.2 0.2
Provisions for liabilities and charges 13.2 13.8
----------------- -----------------
478.8 478.7
----------------- -----------------
NET LIABILITIES (148.4) (149.8)
================= =================
ANALYSIS OF NET DEBT
Cash 30.2 43.5
Bank overdrafts (3.4) (3.2)
----------------- -----------------
Net cash 26.8 40.3
Senior Credit Facility due within one year (26.4) (27.0)
Senior Credit Facility due within one year (259.5) (265.3)
Senior notes (204.2) (199.2)
Other debt due after one year (9.4) (9.4)
Finance leases (0.1) (0.1)
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Gross debt (499.6) (501.0)
----------------- -----------------
Gross debt net of cash (472.8) (460.7)
Capitalised debt issuance costs 13.4 14.9
----------------- -----------------
TOTAL NET DEBT (459.4) (445.8)
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PREMIER FOODS PLC
SUMMARISED GROUP CASH FLOW
THREE MONTHS TO 31ST MARCH
2003 2002
(UNAUDITED) (UNAUDITED)
(pound)M (pound)M
Operating profit 14.8 13.1
Depreciation & amortisation charge 6.7 5.1
----------------- -----------------
EBITDA 21.5 18.2
Capital expenditure (2.7) (2.8)
Taxation paid (0.2) (0.4)
Movement in working capital (8.4) (12.3)
Total interest paid (16.7) (13.3)
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OPERATING CASH FLOW BEFORE EXCEPTIONALS (6.5) (10.6)
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Cash flows related to restructuring (1.0) (1.0)
Other flows 0.4 0.0
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NET FLOW (7.1) (11.6)
GROSS DEBT NET OF CASH AT 1ST JANUARY (460.7) (371.1)
REVALUATION OF $200M SENIOR NOTES (5.0) (3.0)
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GROSS DEBT NET OF CASH AT 31ST MARCH (472.8) (385.7)
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