Premier Foods : Annual Report

Enriching life through food

Premier Foods plc Annual Report for the 52 weeks ended 30 March 2024

Overview

As one of the UK's largest food businesses, we're passionate about food and believe that each and every day we have the opportunity to help enrich peoples' lives by creating great tasting products that contribute to healthy and balanced diets, while committing to nurturing our people, local communities and our planet.

We are proud to be British, employing over

4,000 people operating from 14 sites across the UK, supplying a range of customers with our iconic brands which feature in millions of homes every day.

Contents

OVERVIEW

Highlights	02
Our branded growth model	04
Our ingredients	06

STRATEGIC REPORT

Our investment proposition	09
Our purpose, values and culture	10
About Premier Foods	12
Consumer and market trends	14
Our business model	16
Our strategy	18
Strategy in action	20
Group Chair's statement	22
Chief Executive's review	24
Key performance indicators (KPIs)	26
The Enriching Life Plan	30
Task Force on Climate-related Financial Disclosures	42
Operating and financial review	56
Risk management	63
Viability statement	71

GOVERNANCE

Governance framework	74
Board of directors	76
Governance overview	78
Stakeholder engagement
and Section 172(1) statement	84
Nomination Committee report	88
Audit Committee report	91
Directors' Remuneration report	96
Other statutory information	116
Statement of directors' responsibilities	119

FINANCIAL STATEMENTS

Independent auditors' report
to the members of Premier Foods plc	121
Consolidated financial statements	129
Notes to the consolidated financial statements	133
Company financial statements	176
Notes to the Company financial statements	178
Enriching Life Plan disclosure tables	182
Additional information	190

Find us online at

www.premierfoods.co.uk

Premier Foods plc

Annual Report for the 52 weeks ended 30 March 2024

Our

strategy

Continue to grow the UK core

Our branded growth model

Supply chain investment

Leading brand positions

Expand UK into new categories

	Insight driven
	new products
Build international	Sustained marketing
businesses with
critical mass	investment

OVERVIEW

Our Enriching

Life Plan

Products

Helping consumers lead healthier and more sustainable lifestyles, by creating foods which have

a higher nutritional value, are kinder to the environment and are free of unnecessary or problematic packaging.

Planet

Contributing to a healthier planet through strong commitments

to tackle climate change and deforestation, improving the sustainability of farming practices and reducing waste.

People

Inorganic opportunities

Retailer partnerships

Forging inclusive and fulfilling career pathways that contribute to the UK economy and giving back to the communities where we operate.

Read more		Read more
on pages 18 and 21.		on pages 04 and 05.

Read more

on pages 30 to 41.

Premier Foods plc www.premierfoods.co.uk

 01

Highlights

Over the year, we have continued to deliver strong progress against each of our five strategic pillars.

Delivering against each of our five strategic pillars

This has resulted in another strong set of financial results, with revenue and Trading profit both growing significantly year-on-year. Our branded growth model continues to deliver sales growth through new product development ('NPD'), sustained consumer marketing investment and excellent in-store execution. Strong cash generation has also helped us to reduce our Net debt to its lowest ever level, even after acquiring FUEL10K. With this year of strategic progress and strong financial

+13.6%

Continue to grow the UK core

Our core UK business is key to the success of the Group. This year we have delivered UK branded revenue growth of +13.6%, demonstrating the continuing success of our branded growth model.

See page 18

for more information

£33m

Supply Chain Investment

This year we have spent £33m improving efficiency and productivity. This ongoing investment strategy releases cost that we invest back into our brands in order to drive further growth.

performance, we are increasing our final dividend by 20%.

+72.3% +12%

Statutory measures include 5 months' ownership of FUEL10K for FY23/24. A definition of Alternative Performance Measures and a reconciliation between headline and statutory measures

are provided in the appendices on pages 60 to 62.

Read more

on pages 24 and 25.

Expand UK into new categories

Sales from new categories have increased by +72.3% over the year, driven by products such as Ambrosia porridge pots.

See page 20

for more information

Inorganic opportunities

This year we purchased FUEL10K, a vibrant breakfast brand, which we believe will benefit from our branded growth model and deliver accelerated growth.

Build international businesses with critical mass

We have continued to deliver progress, with International sales up +12% in the year (on a constant currency basis), building distribution across our key focus markets.

 02

See page 21

for more information

Premier Foods plc

Annual Report for the 52 weeks ended 30 March 2024

OVERVIEW

Financial and operational highlights

£1,122.6m £179.5m £151.4m

Headline revenue 1,2

Trading profit 1,3

Profit before tax

+ 15.1%

+ 14.0%

+ 34.7%

FY23/24

£1,122.6m

FY23/24

£179.5m

FY23/24

£151.4m

FY22/23

£975.6m

FY22/23

£157.5m

FY22/23

£112.4m

FY21/22

£900.5m

FY21/22

£141.2m

FY21/22

£102.6m

FY20/21

£934.2m

FY20/21

£141.6m

FY20/21

£122.8m

FY19/20

£124.0m

FY19/20

£53.6m

FY19/20

£847.1m

1.2x

56,580

1.728p

Net debt to adjusted

Scope 1 & 2 emissions (tCO e)4

Final dividend

EBITDA ratio1

(market-based)-13.8%

2

+ 20%

FY23/24		1.2x	FY23/24
						FY22/23
FY22/23		1.5x
FY21/22		1.7x	FY21/22
						FY20/21
FY20/21		2.0x
FY19/20	2.8x

1

2

3

4

56,580	FY23/24				1.728p
65,629	FY22/23				1.44p
37,848	FY21/22				1.20p
72,913	FY20/21				1.00p

Further analysis and KPIs found on pages 26 to 29.

A definition of Alternative Performance Measures and a reconciliation between headline and statutory measures are provided in the appendices on pages 60 to 62.

Headline revenue in FY23/24 and FY22/23 exclude Knighton.

FY22/23 Trading profit was stated including software amortisation, the prior year comparatives have been re-stated accordingly.

Total Scope 1 & 2 Greenhouse Gas Emissions - Market-based (tCO2e).

Premier Foods plc

www.premierfoods.co.uk

 03

Our branded growth model

Our branded growth model fuels the core business, and consists of four elements:

We have

leading brands…

Many of our brands are leaders in their categories with high household penetration.

Flavourings & Seasonings

Quick Meals, Snacks & Soups

Ambient Desserts

Cooking Sauces & Accompaniments

Ambient Cakes

 04

Premier Foods plc

Annual Report for the 52 weeks ended 30 March 2024

OVERVIEW

…that innovate

to meet

consumers'

needs…

We launch new products based on consumer trends, with a major focus on health and nutrition.

1	Health and nutrition
2	Convenience
3	Snacking and on-the-go
4	Indulgence
5	Packaging sustainability

Case Study

Ambrosia porridge pots

In FY22/23, we launched a new range of Ambrosia porridge pots in a ready-to-eat format. This NPD took us into the breakfast category for the first time, as part of our strategy to expand into new categories.

Over the year, Ambrosia porridge pots delivered +108.7% revenue growth and now has a 10.2% share of the porridge pots market, helping Ambrosia become our fourth £100m brand.

Read more in our Strategy in action on page 20.

…which are

supported

by engaging marketing…

Significant investment in TV advertising and digital activation behind seven of our brands, creating emotional connections with consumers.

Best Restaurant in Town

'Devon knows'

'Adventures in flavour. Since 1889'

'Dad's night in'

'Piano'

'Tasty'

'Sticking together'

…and strong

customer

partnerships.

Focused on driving mutual category growth and delivering outstanding in-store execution.

Premier Foods plc

www.premierfoods.co.uk

 05

Our ingredients

Each year we purchase around:

We offer consumers great tasting products made from quality ingredients.

We source a wide range of healthy, natural ingredients for our products, purchasing raw ingredients from a range of suppliers in the UK and from markets around the world. Last year we purchased over 265,000 tonnes of food ingredients, working with around 245 suppliers, to develop long-term sustainable partnerships which deliver mutual benefits. We source our ingredients in a responsible manner to give consumers confidence that the food they purchase

is produced in an ethical and sustainable way. Under our Enriching Life Plan, we have set a target to more than double the sales of products that meet high nutritional standards.

How we make our products

We make a lot of our products in a similar way as people do in their kitchens at home. We combine simple ingredients and then cook them - it's just we do it on a much larger scale.

Take Loyd Grossman Tomato and Basil sauce as an example. We take ingredients such as sun ripened tomatoes, garlic puree and fragrant basil and combine them with typical store cupboard ingredients such as extra virgin olive oil, sea salt and black pepper. We prepare and heat our sauces in large pans to ensure they are thoroughly cooked and can deliver the long shelf

life consumers expect whilst containing no artificial preservatives. The cooking is carefully controlled and the recipe is kept consistent to ensure the outcome, in terms of flavour and consistency, is always the same.

14,000 tonnes of

tomatoes

from Spain and Portugal, for our Sharwood's, Loyd Grossman and Homepride sauces.

55,000 tonnes of

wheat

from UK farmers, for our Andover Mill, which is used to make bagged flour and baking mixes, including McDougalls.

37 million litres of

milk

from West Country farmers, for our Ambrosia rice pudding, custard and porridge.

2,900 tonnes of

Bramley apples

from UK orchards, for products such as our Mr Kipling fruit pies.

 06

Premier Foods plc

Annual Report for the 52 weeks ended 30 March 2024

OVERVIEW

Case Study

Parsley

Camstar Herbs is one of the largest producers of dried parsley in Europe, with 3,000 acres in the UK dedicated to the crop, and they've been suppliers to Premier Foods for 13 years. Premier Foods buys 72 tonnes of parsley each year for use in a broad range of products such as Paxo Stuffing, OXO Cubes, Batchelors Cup A Soup, Batchelors Pasta N Sauce and Bisto Parsley Sauce.

All Camstars growers are Red Tractor approved which ensures high standards and means their crops can be traced to the British farms they came from. The firm also prides itself on getting the crop from the fields to the factory in less than half an hour where the parsley is carefully dried to capture its flavour before it's used in our recipes.

One of Camstar's largest sites is Chestnut Farm in East Anglia which grows parsley between July and

November. The site is carefully managed to protect the soil from the damage which can be caused by heavy agricultural practices. Instead, the ground is only lightly ploughed and the crop is planted using a corn drill to ensure minimal soil disturbance. Oats and radishes are grown on the land through the winter to encourage aphid eating invertebrates for spring, reducing the need for pesticides.

72 tonnes of

UK parsley

for our Paxo Stuffing, OXO cubes and Batchelors Cup A Soup

"

Herbs like ours can transform a product, elevating it above the every day. We're proud of our attention to detail and commitment to sustainable production principles we share with Premier Foods. It's great to know our parsley is playing a key role in so many famous products."

Andrew West,

a key grower from Chestnut farm

Premier Foods plc

www.premierfoods.co.uk

 07

Strategic report

Our investment proposition	09
Our purpose, values and culture	10
About Premier Foods	12
Consumer and market trends	14
Our business model	16
Our strategy	18
Strategy in action	20
Group Chair's statement	22
Chief Executive's review	24
Key performance indicators (KPIs)	26
The Enriching Life Plan	30
Task Force on Climate-related
Financial Disclosures	42
Operating and financial review	56
Risk management	63
Viability statement	71

 08

Premier Foods plc

Annual Report for the 52 weeks ended 30 March 2024