Bakkavor Group plc (the 'Company') and its subsidiaries ('Bakkavor' or 'the Group'), the leading international provider of fresh prepared food ('FPF'), today announces its audited results for the 53 weeks ended 31 December 2022 ('FY22').

Robust performance in line with market expectations and balance sheet strength maintained

Like-for-like revenue1 exceeded GBP2bn, up 10.6%, with growth led by price and US volume. Including the 53rd week and currency impact, reported revenue of GBP2,139.2m was up 14.3%.

Adjusted operating profit1 of GBP89.4m, in line with market expectations2. Whilst inflation has largely been mitigated through pricing and self-help measures, profits were down GBP12.6m.

Operating profit of GBP37.8m includes GBP50.1m of exceptional items3, primarily related to the Group's restructuring plan.

Good free cash1 generation of GBP66.8m (2021: GBP91.2m), which supported debt reduction, dividend payment and the purchase of shares to satisfy awards under the Group's share scheme plans.

Free cash flow2 of GBP91.2m, up GBP51.1m

Leverage1 of 1.9x maintained within the target range, continued to operate with over GBP200m of liquidity headroom and a good level of protection from interest rate rises.

Total 2022 dividend per share of 6.93p up 5.0%; proposed final dividend of 4.16p per Ordinary share.

Strong foundations underpin resilient performance

UK continued to outperform the market, driven by strong service, breadth of product range and targeted innovation. Operationally remained in good shape despite disruption from ongoing supply chain challenges.

Strong US revenue momentum, with growing demand for fresh meals. Operational challenges, from the pace of growth and customer contractual dispute, however, put pressure on profits.

Trading in China impacted by Covid-related disruption, but teams' resilience minimised financial impact and good progress in further strengthening retail presence as we seek to diversify our revenue stream.

Largely mitigated impact of c.GBP230m of inflation, leveraging the Group's scale and multi-faceted approach, through pricing, value optimisation, efficiency improvements and tight cost control.

Investment in our people through pay and engagement activities had a positive impact, and labour pressures have eased; availability improved, and employee turnover has tracked down in H2 2022.

Targeted approach to sustainability delivered good progress; UK food waste improved by 110bps to 8.05%, and Group net carbon emissions reduced by 18.9%.

Clear plan in place to protect 2023 profits, on track to deliver targeted savings

Early FY23 trading encouraging; UK volumes in line with expectations, despite recent fresh produce availability challenges, gained further market share and confident of continued outperformance with a strong pipeline of opportunities.

Near-term focus in the US shifted from growth to profit; operational improvement and cost reduction plans being embedded, with a more measured approach to growth to help minimise disruption.

Positively in China, volumes have shown a gradual recovery in recent weeks. Whilst we anticipate some ongoing disruption in the near-term, we remain confident in the long-term prospects for the market.

Plan on track to deliver GBP15m savings in FY23; embedded new leadership structure, UK operations aligned to two sectors and two UK sites to close, with volume transfer, in Q1 2023.

The cash costs of implementing the plan are GBP17.1m, with most of the cash outflow in FY23, and together with GBP33.0m of impairment charges, are recognised as exceptional items3 in FY22.

Confident in delivering 2023 adjusted operating profit within the range of market expectations2, as our clear strategy, action plan, scale, strong relationships and balance sheet strength, leave us well-placed to move forward with confidence.

FINANCIAL SUMMARY

Mike Edwards, CEO, commented:

'2022 has been a year of challenge and disruption. Despite this difficult environment, I am pleased with the robust financial performance, strong operational delivery and the agile response demonstrated by our teams, which has underpinned this delivery. I would like to thank the entire team for their ongoing commitment and relentless energy in dealing with the challenges that we faced through the year.

The decisive action we have taken to protect profits - to restructure our operations, re-focus our regional priorities and be more targeted in our investment - combined with our strong balance sheet, provide us with a stronger platform to move forward with purpose and confidence.'

PRESENTATION

A copy of the 2022 full year results is available on www.bakkavor.com/en/investors/results-and-presentations

We will be presenting to analysts in-person and via a webcast at 09.00am on 8 March 2023 through the investor section of the Group's website at: https://app.webinar.net/P6JKR7gR2wz. The presentation can also be accessed via a replay service shortly after the presentation has concluded.

See full release at: https://www.bakkavor.com/en/news/news/news-details/2023/Bakkavor-Group-plc-Full-Year-Results-2022/default.aspx

ENQUIRIES

Institutional investors and analysts:

Ben Waldron, Chief Financial Officer

Emily Daw, Head of Investor Relations

+44 (0) 20 7908 6114

Financial media:

Katie Hunt, MHP Communications

+44 (0) 20 3743 8794

Rachel Farrington, MHP Communications

+44 (0) 20 3128 8613

Oliver Hughes, MHP Communications

+44 (0) 20 3128 8622

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